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President Barack Obama pushed a humbled
General Motors Corp. into bankruptcy on Monday and said the federal
government will act as "reluctant shareholder" when it assumes a
60 percent ownership of the smaller carmaker that emerges.


      The president said he hopes GM -- once a proud symbol of American
capitalism -- would emerge quickly from bankruptcy court, and
pledged up to $30 billion in additional federal assistance to help
it get on its feet.


      The government's partial stake in GM comes on top of a far
smaller ownership of Chrysler LLC, as well as significant federal
equity in banks, the AIG insurance giant and two mortgage industry
titans - all victims of an economic crisis unrivaled since the
Great Depression.


      Republicans lobbed questions in Obama's direction even before he
finished speaking.


      "The only thing it makes clear is that the government is firmly
in the business of running companies using taxpayer dollars," said
House Republican Leader John Boehner of Ohio.


      "Does anyone really believe that politicians and bureaucrats in
Washington can successfully steer a multinational corporation to
economic viability? It's time for the administration to fully
explain what the exit strategy is to get the U.S. government out of
the board room once and for all," Boehner said.


      But the president said the actions were part of a "viable,
achievable plan that will give this iconic company a chance to rise
again."


      Speaking at the White House, where he was flanked by Cabinet
secretaries and top economic advisers, he added, "What I am not
doing, what I have no interest in doing, is running GM."


      The president said auto executives "will call the shots and
make the decisions about turning this company around." He said the
government would refrain from playing a management role in all but
the most critical areas.


      "Our goal is to help GM get back on its feet ... and get out
quickly," he said of the federal government.


      Obama spoke as GM entered bankruptcy court at the same time
Chrysler was looking to emerge after a two-month reorganization.


Over the weekend, a bankruptcy judge gave the No. 3 automaker
approval to sell most of its assets to Italy's Fiat, part of a plan
under which the U.S. government will own somewhat less than 10
percent of the firm.


      Ford Motor Co., the other large U.S. automaker, has said it can
weather the current economic and industry crises on its own.


      Obama said the coming restructuring will "take a painful toll
on many Americans" with the closure of additional plants and the
loss of jobs.


      Obama cited Chrysler's experience in bankruptcy court as a model
of how GM could fare.


      "Some said a quick bankruptcy was impossible ... they were
wrong," he said.


      He added that unnamed critics predicted car sales would "fall
off a cliff," and added, "they were wrong." Chrysler sold more
cars in May than it did in April.


      The outcome, he said, is "dramatically better than the one we
found when we began."


      Looking ahead, he said, GM will be prodded at every juncture by
the administration's top officials.


      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 at a level of 10 million vehicle sales a
year. The company that entered bankruptcy court had to sell an
estimated 16 million units 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.

Gallery

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President Barack Obama pushed General Motors Corp. into bankruptcy on Monday and said the federal government will act as "reluctant shareholder" when it assumes a 60 percent ownership of the smaller carmaker that emerges.

Obama's plan to save GM: bankruptcy, $30 billion

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