Members of President Barack Obama's auto task force indicate in interviews with the Wall Street Journal that the Obama administration doesn't want to let GM and Chrysler slip into bankruptcy protection. Instead, the task force is expected to say that it sees viable futures for both GM and Chrysler, but only if there are sacrifices from their managements, unions and GM's bondholders. The team will also lay out a firm timeline for action.
The task force is expected to begin announcing decisions on the automakers within days, the Journal reports.
GM and Chrysler have received $17.4 billion in government loans to help them stay in business and have requested $22 billion more from the U.S. government, including $9 billion for the second quarter. But the task force may not disburse new aid immediately, choosing instead to preserve that as leverage, the newspaper reports.The task force met with officials from Chrysler and Italy's Fiat on Wednesday and indicated it is still interested in seeing the two companies form an alliance, as the companies have proposed, the Journal reports, citing two people who attended the meeting. Reuters reports Sen. Carl Levin of Michigan said on Capitol Hill Wednesday that "it is clear" more help is on the way and any assistance for GM and Chrysler would be tied to new conditions on restructuring.