UPDATED: Restructuring plans rejected; GM CEO to step down

News 11's Jerry Anderson talked with President Barack Obama today about the future of the American auto industry.

DETROIT (AP) - President Barack Obama is rejecting the turnaround plans from General Motors Corp. and Chrysler and setting tough, new deadlines for the two automakers to develop newrestructuring plans.

In a White House speech, Obama said the companies - and the auto industry - must stand on their own, not as "wards of the state" supported by tax dollars.

GM is getting 60 days worth of financing to restructure, while Chrysler is getting up to $6 billion and 30 days to complete a deal with Italian automaker Fiat. The Obama administration also replaced

GM's CEO Rick Wagoner with the company's chief operating officer, Fritz Henderson.

If the companies fall short, Obama raised the specter of using bankruptcy laws to force their restructuring.

Obama offers incentives to spur auto sales

President Barack Obama says the federal government is preparing to offer incentives to get Americans to buy more U.S.-made cars.

Obama said this morning in a speech from the White House that the IRS will start notifying consumers who purchased cars after Feb. 16 that they can deduct the cost of any sales and excise taxes. The program would remain in effect till year's end.

Obama says he wants to work with Congress to use parts of the economic stimulus package to fund a program allowing consumers to get a "generous credit" when they replace an older, less fuel-efficient car and buy a new, cleaner car.

The program is meant to boost U.S. car sales.

Obama also says the government will guarantee warranties on any General Motors or Chrysler vehicle.

More on the Web

CNN: Obama announces plans for GM, Chrysler

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

White House questions viability of GM, Chrysler

WASHINGTON (AP) - President Barack Obama has refused further long-term federal bailouts for General Motors and Chrysler, saying more concessions are needed from unions, creditors and others.

Obama also has raised the possibility of controlled bankruptcy for one or both of the automakers.

Obama says the "auto industry is not moving in the right direction fast enough."

His words underscore the extent to which the government is dictating terms to GM and Chrysler, much as it has taken an ownership stake in banks, insurance giant AIG and housing titans Fannie Mae and Freddie Mac.

The administration also has forced the departure of GM chief Rick Wagoner.

Implicit in Obama's remarks is that the government holds the ability to pull the plug on GM or Chrysler.

(Copyright 2009 by The Associated Press. All Rights Reserved.)