Obama team says GM, Chrysler recovery plans 'not viable'

WASHINGTON, March 30, 2009 (AFP) - President Barack Obama's task force to evaluate troubled US automakers General Motors and Chrysler said Monday that it found their recovery plans "not viable as currently structured."

In two separate reports, the task force analyzed the prospects for both companies and their compliance with last year's agreement, under which they received 17.4 billion dollars in emergency loans to stay afloat.

(AFP filed photo) Hummer H3 units are presented at the 100th Annual Los Angeles Auto Show, 30 November 2006. General Motors will decide by March 31, 2009 whether the HUmmer brand will be allowed to die or be sold to a new owner.

It found that both companies have "not satisfied the terms" of their accords.

In the case of GM, the task force noted that while the company has made meaningful progress in its turnaround plan, "the progress has been far too slow" and GM continued to lag behind its competitors as a result.

"As a result, the president’s designee has found that General Motors’ plan is not viable as it is currently structured," the report said.

However, the experts expressed confidence that "there could be a viable business within GM" if the company and its stakeholders engage in a "substantially more aggressive" restructuring plan.

The prospects for Chrysler were much dimmer, according to the reports.

The document analyzing the automaker said that Chrysler's "fundamentally disadvantaged operating structure and a limited set of desirable products make standalone viability for the business highly challenging."

Its recovery plan was also found "not viable as currently structured."

However, the task force said that if Chrysler could develop a partner which would bolster its product development and allow it to enter the small car market, "Chrysler has some prospects for long term viability."

Source: AFP

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