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Deals

Obama: Help to automakers was "necessary step"

CHICAGO (Reuters) - President-elect Barack Obama said on Friday that the White House move to rescue Detroit’s automakers was a “necessary step” to avoid an industry collapse that would have had dire consequences for the economy.

President George W. Bush offered $17.4 billion in emergency loans to the carmakers in an attempt to save the faltering companies.

Obama, who has urged that any assistance to the automakers be conditioned on steps toward long-term viability, said the firms must now work with their employees, dealers, creditors and suppliers to make “hard choices” to bring about those reforms.

“Today’s actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers,” Obama said in a statement.

“The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely required to save this critical industry and the millions of American jobs that depend on it,” he said.

An Obama transition official said the White House kept the president-elect informed of its auto plan deliberations but Obama was not part of the decision.

“The administration did not ask for our opinion or approval on the package or any of its specifics,” a transition official told Reuters on condition of anonymity.”

Reporting by Caren Bohan; Editing by Doina Chiacu

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