President Barack Obama said on Thursday that struggling U.S. auto companies could expect some government aid if they commit to restructuring their businesses and that an announcement on the issue was coming soon.
I'm going to be making some announcements over the next several days about the auto industry, Obama told a virtual town hall meeting from the White House.
What we're expecting is that the automakers are going to be working with us to restructure. We will provide them some help, he said in a session broadcast on the Internet where he answered questions from the public on the economy.
I know that it is not popular to provide help ... to auto companies, he added. If they're not willing to make the changes and the restructurings that are necessary, then I'm not willing to have taxpayer money chase after bad money.
Obama's White House task force has a March 31 deadline to determine whether General Motors Corp and Chrysler LLC, controlled by Cerberus Capital Management, can be made competitive and worthy of up to $22 billion in additional bailout funds.
The two received $17.4 billion in taxpayer assistance in December after saying they could not survive without it. Ford Motor Co, which is also struggling financially, has not sought a bailout.
Obama said all of the players connected to the industry would have to make sacrifices to put it on a sustainable path.
Everybody's going to have to give a little bit: shareholders, workers, creditors ... suppliers, dealers, he said. Everybody is going to have to recognize that the current model -- economic model -- of the U.S. auto industry is unsustainable.
Obama has long said car companies should be building more fuel-efficient cars rather than focusing on big sports utility vehicles for their profit margins.
Obama said the tough economy had affected foreign auto makers as well, though he called out domestic manufacturers for mismanaging their companies over the last several years.
He said U.S. carmakers would have to make pretty drastic changes and warned that they would not return to the strong market share they had in the 1950s.
(Additional reporting by Tabassum Zakaria and Ross Colvin; Editing by Cynthia Osterman)