February 12, 2009 at 3:12 pm

Obama to Big 3: Craft plan that works

In a round-table discussion with The Detroit News and other newspapers Wednesday, the president praised Congress for a package focused on the middle class and said he hopes Congress will pass the legislation and send it to him by the weekend. (White House photo)

WASHINGTON -- Nearly an hour of heavy questioning had ticked by and, finally, a reporter asked what probably all the reporters were wondering.

What, exactly, was the brick-size wooden box with the red button on top, on the table in front of President Barack Obama?

"If any of you really got me mad, I would press it," Obama said with a mischievous laugh.

Obama, meeting with The Detroit News and more than a dozen other newspapers in the White House on Wednesday, is just getting used to the box, his office and his new job. The box, and others like it in every room, is the alarm to call Secret Service agents to the president's defense.

Obama was serious, however, when asked his feelings about the U.S. automakers: "Get me a plan that works."

He offered the struggling automakers unspecified additional aid -- if automakers engineer realistic plans to make their business profitable.

"My goal consistently has been to offer serious help to the auto industry, once a plan is in place that ensures long-term viability and that we are not just kicking the can down the road," Obama said. "And so what the nature of that help ends up looking like, I think it's going to depend on the plan."

The Treasury Department has already agreed to lend General Motors Corp. $13.4 billion and Chrysler $4 billion. The automakers' finance companies have also won support. The Treasury invested nearly $6 billion in GMAC and agreed to lend Chrysler Financial up to $1.5 billion.

GM and Chrysler must submit detailed restructuring plans to the Treasury Department Tuesday, and outline new additional painful steps, including more job cuts, salary and benefit cuts. GM will also announce it is closing additional plants.

"Just based on the conversations I've had, the reports that I've seen, what's going to be clear is that everybody is going to have to put some skin in the game. Management, shareholders, creditors, dealers, workers. In order to make this thing work, everybody is going to have to make some short-term sacrifices in order to see some long-term benefit," Obama said.

"We need an American auto industry," he said when asked if he agrees with his predecessor, George W. Bush, that the economy is too weak to survive a collapse of the domestic auto industry.

Obama said he is "monitoring" the Detroit auto industry.

He said the stimulus bill awaiting final House and Senate passage would be "very helpful to the auto industry, but I recognize that we've got a lot of short-term stress in Detroit. I am monitoring the progress that is being made by the auto industry in terms of presenting a plan to us next week."

Obama added that whatever "model" is presented by the industry must take into account "what the auto market is going to look like over the next several years. If a plan is presented to us premised on 20 million in sales when we just know that is not going to happen, then we are going to have to ask them to go back to the drawing board."

Obama said a "disorderly bankruptcy of one of the Big Three could be disastrous, not just for those states that are very reliant on autos, but for the economy as a whole."

Obama said he didn't want to "prejudge" what the automakers will send him in the plan.

The president could name his auto czar and auto restructuring team as early as today, officials said. The Treasury Department already has hired an investment bank and two law firms to advise it on the auto restructuring.

Private equity figure Steven Rattner, a partner at the Quadrangle Group in New York, reportedly is the leading candidate to be auto czar, overseeing the industry.

The president also addressed other topics:

  • "Buy American" provisions: He raised some red flags against protectionist sentiments, which can "worsen the economic prospects for all countries. You start getting into a downward protectionist spiral that is very dangerous."

  • Cynicism expressed about government's competence to rescue troubled banks: "This is the biggest financial crisis since the Great Depression. ... Some of the cynicism is that government just shouldn't be involved at all. Well, if FDR hadn't declared a bank holiday, probably the entire financial system of the United States would have collapsed back in the '30s."

  • Oil drilling: He defended his administration's decision to review oil leases on federal lands.

    "We had an administration that I think was heavily tilted towards opening up lands to commercial interests. ... We've said, 'Let's slow this thing down, and give us an opportunity to evaluate what's been done over the last several years.'"

    But when it came time to pick a favorite -- Duke or archrival University of North Carolina in their annual grudge game -- the hoops-loving president dodged, saying he feared running afoul of a Duke grad on his staff.

    "I might not be able to find my BlackBerry later," he said.

    For the record, North Carolina (22-2) beat No. 6 Duke 101-87.

    Staff Writer David Shepardson contributed. You can reach Deb Price at dprice@detnews.com">dprice@detnews.com.