Analysis: Obama tougher on cars than banks

 

Tuesday, Mar 31,2009, 11:33:08 PM   Click:

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Source: Associated Press Worldstream
Wordcount: 334

WASHINGTON_President Barack Obama relates to the beleaguered U.S. auto industry more severely than it has bailed out the banks and insurers.

His ultimatum to General Motors and Chrysler is another milestone in the country in March uncharted government regulation of industry.

At the moment, perhaps, all Americans must understand that the government is far from playing a larger role than usual in managing large companies, including banks, insurance of motor vehicles and receive billions of dollars in federal assistance. Yet the message is always difficult to be absorbed by many unions, retailers, and, most visibly, the leaders who took large bonuses or chartered jets to congressional hearings in which they sought the money to maintain their business afloat.

The Obama administration, perhaps the public sentiment outside of self-fabrication of the State of Michigan, seems to have little patience with the automobile industry.

The CEO of GM, Richard Wagoner, must go, said the administration, workers must make concessions and Chrysler should pursue a merger with Italian automaker Fiat SpA, if more government aid must be considered. Obama went further Monday, embracing possible short-term bankruptcy and reorganization by the two automakers (Ford is not involved), an idea he had dismissed as president elected in November.


"I know that even when people hear the word" bankruptcy ", it can be a bit worrying," said the President in his address to the White House.

Indeed. But many other events, including employment rates and diving savings accounts, Americans are even more unstable.

Automobiles made great misfortune upon themselves, by resisting changes that might have made more efficient and competitive. But they also suffer from resentment of Americans new bail out big business, and feel that is both powerful auto industry is less vital to the welfare of the United States than in the financial sector.

"The banking sector is much more important in today's economy," said Nariman Behravesh, chief economist at IHS Global Insight. The public, he said, "suffers from fatigue bailout."

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EDITOR'S NOTE _ Charles Babington covers the White House for The Associated Press.