President Barack Obama's extraordinary auto industry intervention is assertive and coldly pragmatic, with a dose of caution and a sentimental nod to the automobile's place in the American psyche.
Obama's curt rejection of General Motors' and Chrysler's restructuring plans and his abrupt move to muscle out GM's CEO set the stage for a major realignment of the U.S. auto industry. He bluntly raised the prospect of a "prepackaged bankruptcy" that would reorganize the companies quickly under court protection.
But Obama did not upend Detroit in one single swoop. He gave each company a second chance at a federal bailout — 60 days for GM and 30 for Chrysler — though it was evident that from now on little would remain the same.
"We've reached the end of that road," Obama declared Monday.
Yet Obama also conceded the intangible nature of the auto industry as a national symbol, and made it clear he would not let it succumb under his watch. He called the industry an emblem of the American spirit and a pillar of the economy.
"We cannot, and must not, and we will not let our auto industry simply vanish," he said.
The forced ouster of GM CEO Richard Wagoner, the detailed review of the companies' business models and the overt threat of bankruptcy represented an increasingly hands-on approach by the government to institutions receiving federal assistance in the midst of the economic crisis.
On Tuesday, Sen. Bob Corker, a Tennessee Republican whose state is home to auto manufacturing plants, said the administration's aggressive intervention in the industry sets "a very dangerous precedent."
It wasn't just the forced ouster of Wagoner that causes him concern, Corker said on CBS's "The Early Show." He accused the administration of taking a "we know best" attitude in connection with the problems in the domestic industry and said that should "send a chill throughout the country."
The president was hardly ambiguous about his desire to use the beleaguered state of the industry to press one of his top policy agendas — an energy policy that emphasizes the manufacture of fuel-efficient, environmentally friendly cars.
"The United States will lead the world in building the next generation of clean cars," he said.
Obama's restructuring conditions include concessions from bondholders, the investors who hold GM and Chrysler debt, as well as from the United Auto Workers, which represents the industry work force. "It will require unions and workers who have already made extraordinarily painful concessions to do more," Obama said.
Welcome to the new world.
Hey, while you're at it, check out the history behind goverment cars:
http://jalopnik.com/5188073/cars-of-the-soviet-union-the-definitive-history-by-andy-thompson
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