Obama says to help U.S. automakers

By Soyoung Kim and Jeff Mason

DETROIT/WASHINGTON (Reuters) - President Barack Obama said on Thursday that his administration would unveil in the coming days the next part of its plan to help the troubled U.S. auto industry, provided the companies push ahead with sweeping restructurings.

The signal of additional federal support prompted a rally in General Motors Corp shares and came as the embattled automaker announced that 12 percent of its U.S. hourly workers had accepted buyouts.

Auto sector shares rallied across the board and GM jumped more than 14 percent as Obama's comments bolstered expectations that while U.S. officials would demand tough concessions from creditors and shareholders, they would not force GM and its smaller U.S. rival Chrysler LLC into bankruptcy.

"What we're expecting is that the automakers are going to be working with us to restructure. We will provide them some help," Obama said at a town hall meeting conducted at the White House for viewers on the Internet.

"I know that it is not popular to provide help ... to auto companies," he said. "If they're not willing to make the changes and the restructurings that are necessary, then I'm not willing to have taxpayer money chase after bad money."

GM and Chrysler face a March 31 deadline from U.S. officials to act on a request for up to $22 billion in additional emergency loans to help them ride out the weakest auto sales in three decades.

On a combined basis, the two automakers have relied on $17.4 billion in loans from the U.S. Treasury to stay in operation since the start of the year.

The request for additional funding, which is being reviewed by a White House panel led by former investment banker Steve Rattner, hinges on the companies' ability to win concessions from the United Auto Workers union and creditors.

As part of its efforts, GM said on Thursday that 7,500 U.S. hourly workers represented by the UAW had accepted buyout offers and would be off its payroll by April 1.

Including the latest round of buyouts, GM has cut 60,500 jobs since 2006 -- more than half of its U.S. factory workforce -- as U.S. auto sales have slowed and its own cash position has weakened.

Separately, Chrysler said it would extend a buyout program that it offered to all its 26,000 U.S. hourly workers last month.

GM and Chrysler have won pending contract changes from the UAW intended to help them cut hourly wage costs to the level of Japanese automakers' operating plants in the United States.

But both automakers have yet to reach related deals with the UAW that would allow them to pay the union in stock rather than cash for half of their remaining obligations to a trust fund for retiree health care, Voluntary Employee Beneficiary Association.

GM bondholders also face pressure to write off two-thirds of the more than $27 billion they are owed in exchange for stock in a recapitalized company.

Advisers to GM bondholders met with Rattner and the autos task force earlier this month, but complained as recently as Sunday that they had been shut out of ensuing talks with both U.S. government representatives and the GM executives.