The federal government may offer more help to struggling US automakers but only if they can show they can be commercially viable, US president Barack Obama has said.
Both General Motors and Chrysler must submit viability plans to the government by 17 February as part of the terms of US$17.4bn in loans made available by the outgoing Bush administration in December.
Additional help rests on those turnaround plans, Obama said in a White House news conference with 16 regional US newspapers, according to Reuters.
“My goal, consistently has been to offer serious help once a plan is in place that ensures long-term viability and that we’re not just kicking the can down the road,” Obama said.
“What the nature of what that help ends up looking like, I think is going to depend on the plan.”
Plans needed to be realistic. “If a plan is presented to us premised on 20m sales when we just know that’s not going to happen, then we’re going to have to ask them to go back to the drawing board,” he said.
Obama reiterated his belief that a disorganised bankruptcy filing could be disastrous to the economy at large but did not rule it out.
“My main message communicated through the Detroit papers would be ‘Get me a plan that works,'” Obama was quoted as saying.
Earlier reports have said the US treasury has retained law firms with bankruptcy experience and an investment bank to advise the government on GM’s taxpayer-backed restructuring and was expected to name a trustee or ‘car czar’ to oversee the process.