What Do You Think of Obama’s Auto Plans?

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I can’t wait to hear what tgriffith and jgoods think of today’s heaping helping of auto news, but since they’re both on vacation, I’m going to ask what you think. First, as you’ve probably heard, GM CEO Rick Wagoner stepped down yesterday, apparently having been asked to do so by the Obama administration’s auto task force on Friday, and Fritz Henderson, former COO, will take over. And here are some highlights of a speech Obama delivered this morning:

  • President Obama’s auto task force rejected the restructuring plans GM and Chrysler submitted to get more bailout money.
  • The government will cover GM’s operating expenses for 60 days while the automaker drafts a much more aggressive restructuring plan, and Chrysler will get 30 days to fine-tune its plan to partner with Fiat.
  • Obama noted that bankruptcy was still a possibility for both companies, but that the government very much wants them to stay in business and will now back both companies’ warranties.
  • Obama announced a tax incentive for new-car buyers and that he wants to implement a cash-for-clunkers program to encourage the owners of older cars to replace them with newer, more fuel efficient cars.
  • Obama appointed a Director of Recovery for Auto Communities and Workers, who will provide support to and pursue opportunities for those who’ve been most impacted by the auto industry’s difficulties.

Needless to say, all this news has generated a lot of reaction. Some think Obama went too far by forcing the exit of Wagoner, particularly since Wall Street has offered much less in the way of compromise and collaboration in return for its bailout money. Some think the government bailout of both industries may be the beginning of a march toward socialism. Many are simply alarmed by the amount of money Obama plans to spend saving GM and Chrysler. And some take a simpler, more practical view, pointing out that now may be the best - and perhaps the last - time to buy a new American-made car with a powerful V8 under the hood.

Do you think GM and Chrysler need to be saved? Do you think Obama and the steps he announced today can help save them?

-Steve Halloran



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