Tuesday AM June 2nd, 2009

President Barack Obama says the bankruptcy of General Motors is part of a “viable achievable plan that will give the iconic company a chance to rise again.” Ed Mayberry reports.


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image of General Motors buildings in Detroit

President Obama says he hopes GM will emerge quickly from bankruptcy court.  The government will own 60 per cent of the new GM, much as it has taken part ownership of Chrysler, banks and other corporations in recent months.  Jim Janke, with Tommy Vaughn Ford, is chairman of the Texas Auto Dealers Association.

“The General Motors dealers are still out there selling cars and trucks.  They’re still servicing cars and trucks.  Our president has said the government will guarantee that the dealers get paid to do the warranty work.  They’re going to close some plants down.  So the supply on the dealer’s lots–as I’m also a Chrysler dealer, I have seen that the supply, we’ve been unable to buy new vehicles.  So the supply on the dealer’s lots will slowly, you know, go away, until they get these plants up and going again, is what I’ve been told.”

GM says it will permanently close nine more plants and idle three others to trim production and labor costs under bankruptcy protection.  Janke says it’s a tough time for those in auto sales.

“My General Motors friends, they’re surely coping.  I haven’t, it’s not been made public on which General Motors dealers got the letter, you know, stating that they’re frenchise is going to be taken away.  If it’s a dealership that’s been in business for many years, and they receive the letter, I’m sure that they’re going to be upset.  I know that some of my Chrysler dealer friends received letters and they were very upset that they got letters.  And so I’m anxious to see, you know, who gets the letters and how they react.”  

President Obama says GM’s move into bankruptcy proceedings will actually improve its situation, and will allow it to start growing for the first time in three years. 

Ed Mayberry, KUHF Houston Public Radio News.

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