U.S. President Barack Obama said he hopes General Motors will emerge quickly from bankruptcy protection and he pledged another $30 billion in U.S. government assistance to help the automaker recover.
The president said he sees GM's bankruptcy filing not as a failure, but as the start of a new company.
"…a new GM that can produce the high quality, safe and fuel efficient cars of tomorrow, that can lead America to an energy independent future, and that is once more a symbol of America's success," he said.
General Motors was once the largest auto manufacturer in the world. But sales have plummeted in recent years, while the cost of production has risen. Bad management decisions have made the situation worse, and the current economic recession has put the future of the company in doubt.
The government stepped in earlier this year with a $20 billion emergency loan. And in late March, President Obama told General Motors it would have until June 1 to negotiate a restructuring plan with unions, creditors, and other stakeholders.
The president said the bankruptcy filing will enable the company to get rid of bad assets and a mountain of debt and set off on a new course.
"What we have then is a credible plan that is full of promise. But GM cannot put this plan into effect on its own," he said.
Speaking at the White House just hours after General Motors filed for bankruptcy protection, the president noted other countries have agreed to help company's foreign operations.
But he stressed that ultimately, responsibility for the future of General Motors and its tens of thousands of American employees rests with the United States.
"That is why our government will be making a significant additional investment of about $30-billion in GM - an investment that will entitle American taxpayers to ownership of about 60 percent of the new GM," he said.
President Obama said Washington will monitor the government's investment in the company, much as a brokerage house keeps watch on the investments of its clients.
Republicans in Congress quickly made it clear they were not in favor of continuing government bailouts for the auto industry. The Republican leader of the U.S. House of Representatives, John Boehner, questioned if politicians in Washington would be able to "successfully steer a multi-national corporation to economic viability."
President Obama said the administration will not take over day to day operations of General Motors, and intends to sell its shares as soon as possible.
"In short, our goal is to get GM back on its feet, take a hands-off approach and get out quickly," Mr. Obama said.
The president said in many ways the process will mirror the experiences of the Chrysler Corporation, the number-three American automaker, which is just emerging from bankruptcy protection.
Mr. Obama said a new, stronger Chrysler is emerging, and predicts General Motors will do the same, signaling the start of a dramatic turnaround in the U.S. automobile industry.
But while his public comments are full of hope, White House officials are warning the government's generosity is not without limits. They make clear this is GM's last chance for survival.
When asked if the government might be willing to pour more money into the beleaguered automaker, one top administration official said bluntly "this is it."