U.S. President Barack Obama says the bankruptcy of General Motors is a
painful, but necessary, step toward reviving the iconic American
GM filed for bankruptcy court protection from creditors Monday as part
of a government-led plan to restructure the struggling 100 year-old
In a televised speech, Mr. Obama said he realizes that more jobs will
be lost in the process, but such sacrifices will help a new, stronger
company emerge to serve future generations.
GM was once the world's largest carmaker, but today announced it is
closing or idling 12 more factories and some other facilities.
Despite receiving about $20 billion in government aid, GM has not recovered from a drastic drop in car sales.
The U.S. government will provide an additional $30 billion to help
restructure GM through the largest industrial bankruptcy in U.S.
history. (The governments of Canada and the Canadian province of Ontario have also pledged $9.5 billion to GM.)
In related news, a U.S. bankruptcy judge late Sunday approved the sale
of substantially all of U.S. automaker Chrysler's assets to a group led
by Italy's Fiat. The move clears the way for Chrysler to exit
bankruptcy protection soon.
President Obama said the judge's action paves the way for the new
Chrysler to emerge as a "stronger, more competitive company in the
future." He said this progress is possible because of a substantial
commitment from the U.S. government and "tough sacrifices" on the part
of Chrysler's debt-holders, workers, and others.
Automobiles are a key part of the manufacturing sector, which makes up nearly one-fifth of the U.S. economy.