(CBS/AP) President Barack Obama's auto industry intervention - what Michigan's governor characterized as "tough love" - can be seen as assertive and coldly pragmatic, with a sentimental nod to the automobile's place in the American psyche - and Detroit's importance to the economy as a whole.
But Mr. Obama's curt rejection of General Motors' and Chrysler's restructuring plans, and his abrupt move to muscle out GM's CEO and set timetables for major restructurings under threat of bankruptcy court, have set the stage for a major realignment of the U.S. auto industry.
The president 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," Mr. Obama declared Monday.
The administration's analysis of the viability of the two auto giants was merciless and remarkably specific in its critique of their business practices. It said GM's underperforming dealers were a drag on the company, and its car of the future, the plug-in Chevrolet Volt, held promise but was too expensive. As for Chrysler, the president said it could only survive with an international partner, the Italian carmaker Fiat SpA.
All in all, the administration and its auto task force concluded that the automakers' plans to change their mix of products, fix their balance sheets, reduce production capacity and launch new vehicles were simply too slow.
"There seems to be a major difference of opinion between the auto task force and GM not about what's desirable, but what's realistic over some undefined business cycle," Malcolm Salter, a professor emeritus at Harvard Business School who has advised Ford and GM, said in an e-mail.
Yet Mr. 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. - CBS News Story
The Federal Government is running many of the Financial Institutions and now (evident with the Obama forcing out the GM CEO) Two of the Three Automakers. Obama wants to take over Health Care as well. Is all of this a Major shift to Socialism? Government control of everything one big chunk at a time. Ford, the only big automaker not to take Federal Funding now has to compete with the other two which seemingly has an endless supply of Taxpayer money, which means even Ford is helping keep them alive.
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