President Barack Obama’s plans on announcing a $17.4 billion aid package for the struggling auto industry in the United States publicly brings notice to the urgency of the situation and dire need save the industry. His encouragement for companies such as General Motors and Chryslter to bring forth drastic change is supported by promises of additional help and funds if the industry begins the process of restructuring the industry and conducting a viable plan to prevent industrial collapse. He mandates, “If they’re not willing to make the changes and the restructurings that are necessary, then I’m not willing to have taxpayer money chase after bad money.” The $17.4 billion in federal loans are currently keeping General Motors Corp and Chrysler LLC afloat as Obama is determined to formulate plans to increase long-term provides through tough concessions with stakeholders.
With the loans, the progress in debt reconstruction and concessions from stakeholders such as the United Auto Wokers union are being severely observed, for aid was said to be revoked if change is not seen under strict conditions. Due to the accumulated debt held by these major companies, means of scarifices such as cuts are made as more efficient and effective means of conducting this industry is encouraged. Although bondholders are reluctant to concede with these cuts in companies’ cash contributions to things like retirement and insurance, the union has agreed to other terms such as work rule changes and reducing total hourly labor costs – relative to those at Japanese automakers with U.S factories.
Furthermore, with oil prices and fuel effiency playing as important factors in the future of this industry, Obama continues to provide aid to preserve this industry and the large number of jobs connected to the companies and suppliers.
What do you think? Will President Obama’s aid package for General Motors and Chrysler provide enough support to have the automotive industry? Will the industry restructuring be enough to bounce back this collapsing industry? What do you think about this aid package amongst the other packages President Obama is providing to bolster the economy?
[...] Original post: Bouncing back [...]