DETROIT, Michigan (The Dissociated Press) - President Obama put the brakes on breaks for two of America's Big Three auto makers Monday, announcing in a White House speech that General Motors and Chrysler had failed to lay out sufficient restructuring plans to justify the large taxpayer investments they were seeking.
GM had requested over $16 billion in new federal aid, on top of the $13.4 billion it received in December, while Chrysler, after receiving an initial $4 billion at the end of last year, had asked for Canada.
Most analysts agree that, for the "modest" amounts the companies were hoping to get, rather than going to Washington to appeal to the government, their chief executives would have been better advised to go to AIG headquarters in New York and wait for the inevitable loose $20 billion, or so, to drop out of someone's pocket.
Mr. Obama said the government would fund GM's operations for 60 more days, giving it a chance to rework its survival plan, which, he said, would need to include, at the very least, provision for making a car that someone would want to buy.
As a precondition to the 60 days of additional support, the President demanded the resignation of GM chief executive Rick Wagoner. As CEO, Wagoner focused the company's resources on fuel guzzling SUVs and trucks, even as the cost of gasoline was skyrocketing and other companies were making great progress with gas-electric hybrid vehicles.
While Toyota and Honda were gaining consumer trust and rapidly increasing market share with the super efficient Prius and Civic hybrids, GM was using the initially popular Iraq War as a marketing platform for its nuclear powered Hummer, which, among other, more significant drawbacks, got only 8 miles per uranium fuel rod. That number is based on city driving, however; on the highway it got as much as 8.6 miles per fuel rod.
The President said there was "a very difficult road ahead" for GM, but he described Chrysler's situation as "basically f--ked."
"The federal government will support Chrysler for the next 30 days," Mr. Obama said, "during which time Chrysler must form a partnership with a stronger, foreign auto maker, such as Yugo."
However, even then, the President admitted, Chrysler's survival at this time is still a long shot, coming less than 2 years after it was dumped by its previous European "host body," Germany's Daimler AG, and sold to Ralph & Fred's Private Equity Bank of Toledo, Ohio.
In the end, Obama, describing the US auto industry as "a pillar of our economy," said his administration would do all it could to help it succeed.
"We cannot, we must not, and we will not let our auto industry simply vanish," Obama said. "We will, however, entertain the possibility of trading it to Japan in exchange for, say, a new Wii console and some good Pokemon cards," he said.
And, from . . .
LONDON (The Dissociated Press) - Pop star and cultural icon Madonna announced through a publicist Tuesday that she has begun proceedings to adopt the south African country of Namibia.
"Namibia is a very young country and has suffered heavily from the effects of HIV/AIDS. Madonna loves countries; she loves caring for them. And she just wants to do what she can to help," said the publicist.
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