President-elect Barack Obama on Monday reinforced the warning from his advisers and Congress to the Big Three automakers looking for a $25 billion bailout paid for by the taxpayers.
As vital as General Motors, Ford and Chrysler are to the economy, the president-elect said he and American taxpayers are not going to write a blank check without a plan for restructuring.
"Taxpayers can't be expected to pony up more money for an auto industry that has been resistant to change," he said at a news conference. "And I was surprised that they did not have a better-thought-out proposal when they arrived in Congress. I think Congress did the right thing, which is to say, 'You guys need to come up with a plan and come back before you're getting any taxpayer money.'"
Congress last week postponed action on the request made in personal appearances by the CEOs of Ford, General Motors and Chrysler and sent them home to develop a plan detailing how the funds would be used.
Lawmakers berated the industry's top executives for arriving in three separate corporate planes to ask for loans. It made Americans mindful of the hundreds of thousands of dollars American International Group spent at a California retreat just days after it received an $85 billion loan from the government.
Americans do not want their tax dollars paying for such luxuries, exorbitant bonuses, executive compensation and other wasteful spending.
"Taxpayers do not want to see more money wasted," Mr. Obama said.
Congress gave the automakers until Dec. 2 to devise a credible plan for using the $25 billion loan with lawmakers expected to take up the issue the week of Dec. 8.
The Big Three automakers, with support from the unions, suppliers and dealers, have made their point that they are too big to fail. Too much is at risk if Chrysler, General Motors and Ford are forced into bankruptcy. Millions of jobs are at stake.
However, if taxpayers are going to hand over $25 billion, they have a right to expect assurances that it will not be business as usual but the Big Three will be making the tough choices needed to enhance their long-term viability.
