The White House Sunday demanded deep restructuring from embattled US automakers as General Motors and Chrysler readied to present their plans in return for billions in government loans.
David Axelrod, a senior adviser to President Barack Obama, said the collapse of talks between GM and the United Auto Workers union underlined the gravity of the situation as Tuesday's restructuring deadline loomed.
"We need a thriving auto industry in this country," he said on Fox News Sunday, stressing that millions are employed by GM, Chrysler and Ford and by related suppliers.
"But as the president has said many times, that's going to involve significant restructuring of the industry so that they're looking forward and not back in producing the kind of cars that people are going to buy in the future," Axelrod said. "And that's going to involve concessions on the part of everyone, not just the auto workers, but shareholders, creditors and, of course, the executives who run the company."
GM and Chrysler, which are receiving 13.4 billion dollars in government loans, have until Tuesday to present preliminary plans to the Treasury Department outlining their steps to reduce costs and plan for the future.
The final plan that will serve as a basis for the Treasury's decision to call in or extend the loans is due by March 31. The two companies were brought to the brink of bankruptcy last year as auto sales collapsed amid a credit crunch and widening recession.
Ford insists it has sufficient cash reserves to survive the downturn without federal aid despite a 5.9-billion-dollar loss in the fourth quarter. Negotiations on union backing for the restructuring at GM collapsed over the weekend after the UAW reportedly balked at management's plans to reform pensions for retired workers.
"Obviously this is a difficult situation, and everyone's going to have to continue to work toward a solution," Axelrod said in response. "We're going to wait and see what the automakers have to say on Tuesday. We'll go from there."
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