President Barack Obama spoke briefly about helping the ailing auto industry during an Internet town-hall meeting Thursday. (Gerald Herbert / Associated Press)
WASHINGTON -- President Barack Obama said Thursday his administration will provide the struggling auto industry with some additional aid -- but with tough conditions.
An announcement is expected Monday, before Obama leaves for Europe on Tuesday.
"What we're expecting is that the automakers are going to be working with us to restructure. We will provide them with some help," Obama said during a town hall meeting at the White House. "I know that it is not popular to provide help to autoworkers or auto companies. But my job is to measure the costs of allowing these auto companies just to collapse, versus us figuring out, can they come up with viable plans?"
Obama said much of the government's willingness to offer additional aid is contingent on General Motors Corp. and Chrysler LLC making "some pretty drastic" and "painful" changes.
"I think it is appropriate for us to say: 'Are there ways that we can provide help for the U.S. auto industry to get through this very difficult time?' But the price is, you've got to finally restructure to deal with these long-standing problems."
Obama's auto task force is expected to give its initial assessment of GM and Chrysler's viability Monday, as part of the terms of $17.4 billion in government loans the automakers have received. The task force is expected to lay out a firm timetable for concessions by bondholders and the United Auto Workers.
Sen. Debbie Stabenow, D-Lansing, said she thinks new conditions will be attached to additional aid.
"I think it won't be anything surprising, actually," Stabenow said. "I think it'll be pretty much what we're continuing to deal with: overcapacity."
Detroit's Big Three automakers have cut more than 100,000 jobs since 2006. At GM alone, more than 60,600 hourly workers have agreed to buyouts or early retirements, while it is cutting another 10,000 salaried jobs worldwide by the end of next month.
Rep. Thaddeus McCotter, R-Livonia, called Obama's comments Thursday a "hopeful sign" that the president would not endorse bankruptcy as a solution.
Obama repeated that all of the stakeholders -- workers, shareholders, creditors, suppliers, dealers -- will have to give "a little."
GM and Chrysler have received $17.4 billion in federal loans and have sought another $21.6 billion. The Treasury Department also is debating whether to approve a deal to sell 35 percent of Chrysler to Fiat SpA in a noncash deal.
"At this moment, we have no agreement to announce," Fiat said in a prepared statement Thursday.
The automaker "continues to engage in constructive dialogue with the President's Automotive Task Force and Chrysler, and we remain optimistic that an agreement can be reached that is mutually beneficial to Fiat, Fiat's shareholders, Chrysler and the U.S. taxpayers if all stakeholders involved are willing to do their part.
"We continue to believe very strongly that placing Fiat's environmentally friendly small car technology and platforms in Chrysler's plants would create a financially stronger car company with the ability to help preserve American jobs and meet the growing demand for smaller, more fuel efficient cars."
Obama warned that he would not risk more taxpayer money, saying unless the automakers are "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 said a domestic auto industry is essential.
"We need to preserve a U.S. auto industry. I think that's important," he said. But he said the need to preserve the millions of jobs that could be lost to a failure of the industry must be balanced with his obligations to the taxpayers.
"There has been a lot of mismanagement in the auto industry over the last several years," Obama said.
The task force may also weigh in on the idea of government incentives to spur new car sales.