Monday 30th March 2009
US President Barack Obama issued an ultimatum to struggling American automakers General Motors (GM) and Chrysler: In order to receive additional bailout loans from the government, he said, the companies needed to make dramatic changes in the way ran their businesses. The president also announced a set of initiatives intended to assist the struggling U.S. auto industry and boost consumer confidence, including government backing of GM and Chrysler warranties, even if both automakers went out of business. In December 2008, GM (the world’s largest automaker from the early 1930’s to 2008) and Chrysler (then America’s third-biggest car company) accepted $17.4 billion in federal aid in order to stay afloat. At that time, the two companies had been hit hard by the global economic crisis and slumping auto sales; however, critics charged that their problems had begun several decades earlier and included failures to innovate in the face of foreign competition and issues with labour unions, among other factors.