Administration Likely to Require Concessions From Automakers for Aid

Published December 24, 2015

A person briefed on the government's efforts to save Chrysler LLC and General Motors Corp. says the Obama administration is likely to require further concessions from the companies and their stakeholders in exchange for more aid.

The requirements could go beyond concessions outlined in the terms of the first government loans given to the automakers by the Bush administration, according to the person, who did not want to be identified because the administration's plans have not been revealed.

The New York Times reported Friday that the Obama administration was likely to set a short-term deadline for the companies to reach deals to cut their debt with creditors and the United Auto Workers union.

Quoting unnamed people familiar with the talks, the newspaper said the autos task force was also likely to say in a plan to be announced Monday that an eventual bankruptcy remains a possibility for either company.

Without more help, both companies are likely to run out of cash to continue operating as current government loans are dwindling.

President Obama has said the carmakers must make "pretty drastic changes" to save their industry.

White House press secretary Robert Gibbs said Friday that the president would not only outline a plan to keep the companies operating in the short term, but would address long-term viability as well.

"How do these companies get through the global recession that sees a great decrease in demand for the product?" Gibbs said. "And how, when we emerge from recession to recovery, how do we have a sustainable path that makes good business decisions not just for one year but for many years?"

The automakers have received $17.4 billion in government loans to stay afloat and are seeking another $21.6 billion. Both face a Tuesday deadline to turn in finished restructuring plans to the government.

The Associated Press and Reuters contributed to this report.

URL

https://www.foxnews.com/politics/administration-likely-to-require-concessions-from-automakers-for-aid