WASHINGTON - President Barack Obama's senior adviser said Sunday that any plan to shore up the auto industry will need to require sacrifice by all involved, from auto workers and industry executives to shareholders and creditors.
General Motors Corp. and Chrysler LLC are expected to submit plans to the government by a Tuesday deadline to show how they can repay billions in loans and become viable in spite of a drop in auto sales not seen for a generation.
"We need an auto industry in this country. There are millions of lives, livelihoods that depend on it," White House adviser David Axelrod said on "Meet the Press" on NBC. "We have a real interest in seeing the auto industry survive, but it's going to require a major restructuring of the auto industry."
Asked if the U.S. economy could withstand a bankruptcy at GM, Axelrod didn't respond directly. Executives at the two automakers have said bankruptcy would not benefit their companies because consumers would be reluctant to buy cars from an automaker that might go out of business.
"How that restructuring comes is something that has to be determined," he said. "But it's going to be something that's going to require sacrifice not just from the auto workers but also from creditors, from shareholders and the executives who run the company. And everyone's going to have to get together here to build companies that can compete in the future."
Axelrod wouldn't say whether the administration would offer the auto industry more bailout money. GM already has borrowed $9.4 billion to stay in business, and it would receive an addition $4 billion if the Treasury Department approves its viability plan. Chrysler wants $3 billion more on top of the $4 billion it has already borrowed.
"We need to see what it is that they come up with this week," he said.
In Detroit, GM and Chrysler have been discussing concessions with the United Auto Workers. Talks with GM broke off Friday night over the issue of health care for retirees.
"This is a difficult situation," Axelrod, appearing on "Fox News Sunday," said of the concession talks. "Everyone's going to have to continue to work toward a solution."
