If you have not been aware of the recent news, General Motors and Chrysler have asked the government for more money, but the Obama administration is pushing back. The government’s task force has determined that the restructuring plans submitted by the companies in return for continued financial support are inadequate.
As a result, the Chairman and CEO of General Motors, Rick Wagoner, is resigning from his position and Chrysler is heading towards a possible merger with Fiat. With GM, the government will provide the company with the funds it needs to operate for sixty days. There is a possibility that General Motors will not survive in its current form two months from now. Chrysler, on the other hand, will only have thirty days to turn around a plan for moving forward.
Bankruptcy may be the answer for both companies. To prevent consumer trepidation about buying a car from a company that might not support its obligations like warranties and maintenance, the Treasury Department has stepped in. The government plans to back warranties on all GM and Chrysler vehicles purchased while the companies exist in their current state of collapse or restructuring.
If you typically buy cars from GM and Chrysler, would you be more or less inclined to purchase a vehicle right now? Are you confident your car will receive the support it needs from these companies or the government throughout its usable life?
You can read the full text of President Obama’s remarks today about General Motors and Chrysler here.