June 1, 2009

Obama: Taxpayers ‘reluctant’ GM investors

The federal government will invest $30 billion in General Motors Corp., becoming a reluctant shareholder in a new GM, U.S. President Barack Obama said Monday.

The morphing of the old GM to the new GM requires a substantial amount of money that only a government can provide, Obama said of the federal government's involvement.

It means taxpayers have about a 60 percent stake in GM, Obama said.

We're acting as reluctant shareholders, Obama said.

GM filed for bankruptcy Monday after submitting a second reorganization plan tailored to the realities of today's auto market, Obama said. GM will cut 21,000 union jobs, close at least 12 factories and 40 percent of its 6,000 dealerships as part of the plan, The New York Times reported.

GM did what Chrysler has successfully done -- file for bankruptcy with support of the necessary parties, Obama said, adding he expected it would take more time for GM to emerge from bankruptcy than Chrysler LLC because GM is bigger and more complex.

The substantial government financial stake does not mean involvement in day-to-day operations, Obama said.

What we are not doing is running GM, Obama said. GM will be run by private board of directors with (a) track record ... of commitment to innovation and quality. They will call the shots.

I will not pretend the hard times are over, Obama said, and will mean more job losses, and more closures at plant, dealerships and parts suppliers.

Speaking to the affected workers, Obama said they were making a sacrifice for the next generation.

If the reorganization goes well, the new GM can offer a new U.S. generation the chance to live out their dreams, out-compete global automakers and be an integral part of the U.S. economic future, the president said.

And when that happens, we can truly say that what is good for General Motors and all who work there is good for the United States of America, Obama said.