Obama Takes Firm Stance, Sets Ultimatums for Chrysler and General Motors
The automakers must meet the administration's demands or else they will be granted permission to file for bankruptcy.
One of the top stories in the news yesterday was that the Obama administration rejected bailout plans that were proposed by prominent automakers, Chrysler and General Motors. It has become clear that the Obama administration has taken a hard stance by setting ultimatums and guidelines that must be followed if either automaker hopes to receive a substantial loan from the government.
The administration has officially given Chrysler 30 days to comply with the administration's requests while General Motors has received 60 days, according to Reuters. The stipulation that Chrysler must adhere to is that they must merge with Fiat by April 30. It is slightly more complicated for General Motors, which is being asked to develop new wage and benefits contracts as well as health benefits for retirees.
The Obama administration is clearly taking a risky political stance in regards to the strict demands that have been announced for the automakers, but it hopes to achieve drastic change with their efforts. Their main goals appear to be to preserve jobs, revitalize each automaker in order to create companies of the future and promote the development of clean, energy-efficient vehicles.
This controversial situation played a significant role on Wall Street yesterday as various stocks such as the Dow Jones, S&P and Nasdaq plummeted.
