President Obama promotes pitches his economic policies to General Motors workers.

DETROIT  – The head of the Obama administration’s autos task force says the government wants to sell its shares in General Motors Co. and Chrysler Group LLC as soon as possible.

Task force chairman Ron Bloom told a congressional panel meeting Monday in Detroit that the government is eager to dispose of the shares.

The U.S. government owns 61 percent of the new General Motors and eight percent of Chrysler. Together the companies have received $65 billion in federal aid. Both recently emerged from bankruptcy protection.

Bloom was testifying before a panel overseeing auto industry bailout money. Treasurers from GM and Chrysler also are scheduled to testify.

Editorial from the The (Waynesboro) News Virginian

Meet Barack Obama, president of the United States, savior of the universe, sheriff of Motown, automobile executive. The preternaturally humble Obama, naturally, chafes at the slight hyperbole. Of course, he’s not an automobile executive, he says. But, Mr. President, if we may use that particular title, you are too modest.

General Motors is yours to salvage or turn to junk.

Obama took over GM by issuing it a weekend ultimatum: Fire CEO Rick Wagoner and produce a new viability plan within 60 days or the government bailout well goes dry. Chrysler similarly got the back of the administration’s hand along with marching orders. Sell to Fiat in 30 days or else lose a place at the government trough.

So Wagoner bid adieu, then leapt into the arms of a lavishing $20 million retirement package – quick, call ACORN; time for another protest. And Chrysler dutifully got busy, announcing a global alliance with Fiat, with the help of a $6 billion government loan. For his next trick, Obama the swami will get GM board members to cluck like chickens. A trifle more daunting will be persuading unions to make wage and benefits concessions.

Recognizing as much, Obama muttered Monday that the situation might necessitate “using our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger.” Oh. But wasn’t the necessity of avoiding bankruptcy the reason taxpayers plunged billions of bailout dollars into the automakers? Who would buy a car made by a bankrupt company, the administration mused. Well, who would empty Treasury vaults in the name of steering companies “too big to fail” away from bankruptcy then suggest that very step?

Meet the sheriff.

And now the CEO. Obama disdains this title because of its accompanying baggage. But the title and baggage are his. That goes with playing the role of government bully in private enterprise. Naturally, those who possess the money also possess the right to dictate terms. Lest he forget, and we think he does, Obama’s money is not his own, but taxpayers’. So, too, are the risks he takes.

Few pity Wagoner, who after six inglorious years on the job had GM idling on the brink with the engine revving. Few sensible people would pity Ron Gettelfinger, the United Auto Workers president who as much as anyone accelerated the auto industry’s race to ruin but still survived Obama’s muscling.

“Use of the bankruptcy code” always has been the answer for GM and Chrysler, so it’s encouraging in a sense to hear the president discuss the possibility. But it would be better now as it would have been better in the beginning for the government to step away from car companies and seal the doors to the Treasury. Bankruptcy will not only compel restructuring, it will force the concessions unions have so successfully resisted to the point of auto companies’ near undoing.

Instead of restraining government hands, leaving GM and Chrysler to do what almost everyone knows they must, Obama appears likely to continue feeding them taxpayer money while pushing an agenda to produce more green cars. Obama the CEO believes this will drive those companies back to profitability, but the president’s auto industry task force says different. Producing cars to meet the fuel efficiency standards Obama wants will make the companies less competitive, the task force says.

So what now, Mr. President? We suggest this: Having broken GM and Chrysler, leave them now to fix themselves and leave them to do it without taxpayer help. That corner of the universe occupied by the auto industry can best be saved by your doing nothing more.

WASHINGTON  – President Barack Obama refused further long-term federal bailouts for General Motors and Chrysler, saying more concessions were needed from unions, creditors and others before they could be approved. He raised the possibility Monday of controlled bankruptcy for one or both of the beleaguered auto giants.

At the same time, eager to reassure consumers, Obama announced the federal government would immediately begin backing the warranties that new car buyers receive – a step designed to signal that it is safe to purchase U.S.-made autos and trucks despite the distress of the industry.

In a statement read at the White House, Obama said he was “absolutely committed” to the survival of a domestic auto industry that can compete internationally. And yet, “our auto industry is not moving in the right direction fast enough,” he added.

With his words, Obama underscored the extent to which the government is now dictating terms to two of the country’s iconic corporations, much as it has already taken an ownership stake in banks, the insurance giant AIG and housing titans Fannie Mae and Freddie Mac.

In an extraordinary move, the administration forced the departure of Rick Wagoner as CEO of General Motors over the weekend, and implicit in Obama’s remarks was that the government holds the ability to pull the plug on that company or Chrysler.

Uncertainty about the industry’s fate sent stocks tumbling, with the Dow Jones industrial average losing as much as 300 points in midday trading.

Ford Motor Co., the third member of the Big 3, has not requested federal bailout funds, and was not included in the president’s remarks.

The Bush administration late last year approved $17 billion in federal funds to help GM and Chrysler survive. It also demanded both companies submit restructuring plans that the Obama administration would review.

Even as he pronounced their effort unsatisfactory, the president said the administration will offer General Motors “adequate working capital” over the next 60 days to produce a reorganization plan acceptable to the administration.

He said Chrysler’s situation is more perilous, and the government will give the company 30 days to overcome hurdles to a merger with Fiat SpA, the Italian automaker. If they are successful “we will consider lending up to $6 billion to help their plan succeed,” Obama said.

He also announced several steps to reassure consumers, and improve the chances that U.S. automakers will be able to sell their cars and trucks.

The president said the government will now stand behind warrantees issued by the carmakers, a sweeping new guarantee that some in Congress had sought.

He also noted that the economic stimulus legislation he recently signed allows the purchasers of new domestic cars to deduct the cost of any sales and excise taxes. Obama said this provision could “save families hundreds of dollars and lead to as many as 100,000 new car sales.”

He also said funds ticketed for the purchase of new vehicles for government agencies would be spent as quickly as possible. The president was flanked by numerous administration officials as he spoke, including Treasury Secretary Tim Geithner.

Obama spoke at the White House with U.S. automakers at yet another crossroads. As the president noted, the industry has shed more than 400,000 jobs in the past year as the recession took hold. Officials announced last week bailout funds would be made available to companies that supply the automakers, an attempt to keep them afloat.

Obama said he is committed to the survival of an auto industry – on terms that will allow it to compete internationally.

“But we also cannot continue to excuse poor decisions,” he said. “And we cannot make the survival of our auto industry dependent on an unending flow of tax dollars.”

He also said some of the industry’s progress has scarcely been noticed. He mentioned that the North American car of the year in 2008 was produced by GM.

“Let me be clear: The United States government has no interest in running GM; we have no intention in running GM,” Obama said.

But that was at the same time he was formally announcing the departure of Wagoner, whom administration officials forced into retirement on Sunday in preparation for the president’s remarks.

“This is not meant as a criticism of Mr. Wagoner, who has devoted his life to this company; rather it’s a recognition that it will take a new vision and new direction to create the GM of the future,” Obama said.

Other changes at GM include new directors on its board. Fritz Henderson, GM’s president and chief operating officer, became the new CEO. Board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.

In a statement, Henderson said the manufacturer would work “to make the fundamental and lasting changes necessary to reinvent GM for the long term.”

Chrysler Chairman Bob Nardelli sought to assure customers, dealers, suppliers and employees that the automaker “will operate ‘business as usual’ over the next 30 days,” while working closely with the government and Fiat to secure the support of stakeholders.

The Obama move comes amid public outrage over bonuses paid to business leaders and American International Group executives – set against a severely ailing economy.

GM failed to make good on promises made in exchange for $13.4 billion in government loans. Chrysler, meanwhile, has survived on $4 billion in federal aid during this economic downturn and the worst decline in auto sales in 27 years. In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more.

GM owes roughly $28 billion to bondholders. Chrysler owes about $7 billion in first- and second-term debt, mainly to banks. GM owes about $20 billion to its retiree health care trust, while Chrysler owes $10.6 billion.

GM and Chrysler employ about 140,000 workers in the U.S. In February, GM said it intended to cut 47,000 jobs around the globe, or almost 20 percent of its work force, close hundreds of dealerships and focus on four core brands – Chevrolet, Cadillac, GMC and Buick.