The announcement marked the latest step in a series of measures Obama has taken since he became president to salvage an industry that has been part of the American landscape for a century.
Earlier in the year, he rejected a restructuring plan submitted by GM's ownership, and ordered its leaders to try again. They did, under the direction of administration officials, and the result is a blueprint in which hundreds of dealerships will be closed and familiar model names jettisoned. Officials have estimated the new GM should be profitable when Americans are buying about 10 million vehicles a year. The company that entered bankruptcy court needed U.S. auto sales to stay at an estimated 16 million units a year to make a profit.
Obama stressed that GM's workers and its investors had both made sacrifices. The United Autoworkers Union agreed in recent days to numerous concessions, and a majority of investors agreed to accept less than the paper value of their holdings. The administration, sensitive to charges that it favored the UAW, said the terms accepted by the unions were harsher than what had been proposed by the Bush administration.
Obama's assurances about a temporary federal ownership were seconded by Senate Majority Leader Harry Reid, D-Nev., who said the president's "decision to take a short-term stake in General Motors is driven by our nation's shared interest in ensuring the American auto industry can survive."
Interest in Congress was intense, though, and the Senate Commerce Committee announced it was summoning top executives from GM and Chrysler to a hearing on Wednesday into their firms' plans to close hundreds of dealerships as part of an industry restructuring.
Chrysler has said it will close nearly 800 dealerships. GM has disclosed plans to shutter about 1,100.
- Provo transit project set to begin,... 12
- Brewvies wants judge to stop DABC from... 10
- Gov. Herbert met with lobbyists to ask... 7
- US economy struggles at start of... 3
- Exxon sees smallest profit in 16 years,... 3
- Yahoo CEO could get $55M in severance... 3
- FBI says it won't disclose how it... 2
- Fortune reports: BYU's cybersecurity... 2