Auto industry can't be allowed to die: Obama

25 February 2009

As the White House mulls yet another bailout for the US auto industry, President Barack Obama said on Wednesday that United States, the nation that created the automobile, cannot walk away from its car industry, teetering on the brink of collapse.

"We are committed to the goal of a re-tooled, re-imagined auto industry that can compete and win," Obama said in his maiden speech to Congress. "Millions of jobs depend on it. Scores of communities depend on it."

General Motors and Chrysler have asked the government for a further $21.6 billion dollars in loans to stave off bankruptcy, after $17.4 billion were granted in December. The auto makers' financial arms, GMAC and Chrysler Financial, have received an additional $7.5 billion in loans.

Ford Motor, the biggest of the 'Big Three' US auto maker, has not yet asked for handouts, but has had to trim its workforce and reduce costs, and might still need emergency loans.

The two companies insisted they can return to long-term viability in detailed plans submitted to the Treasury last week, and they warned that the cost of doing nothing would be far higher.

They said they would slash 50,000 jobs, close plants and discontinue car brands. Both companies insisted they would be able to repay the mountain of loans, which amount to the largest bailout in the 100-plus-year history of the US automaking industry.