Auto plan

AUTO PLAN

At a glance

A look at the Obama administration’s plan for General Motors Corp. and Chrysler LLC:

GENERAL MOTORS CORP.

k President Barack Obama’s auto task force determined that General Motors has not presented a viable plan that would succeed.

k Top executive Rick Wagoner will step down as chairman and chief executive. Kent Kresa, a GM board member, will serve as interim chairman and current president Fritz Henderson will serve as chief executive.

k The administration is willing to give GM adequate working capital for 60 days to develop a more aggressive restructuring plan.

k The company’s stakeholders — unions, bondholders and others — will need to make sacrifices.

k Using the bankruptcy code “in a quick and surgical way” could be employed to help revitalize GM.

CHRYSLER

k The task force has concluded that Chrysler is not viable as a standalone company.

k The administration will provide Chrysler with working capital for 30 days to conclude an alliance with Fiat SpA, an Italian automaker.

k If successful, the government will consider investing up to $6 billion to help the partnership between Chrysler and Fiat succeed.

k If the agreement is not reached, the government will not invest any additional taxpayer funds in Chrysler.

CONSUMERS

k The administration will protect consumer warranties from General Motors and Chrysler vehicles.

k The plan includes an incentive program meant to increase car sales. Obama will work with Congress to use parts of the economic stimulus package to fund a program that would give consumers a “generous credit” when they replace an older, less fuel-efficient car and buy a new, cleaner vehicle.

k The Internal Revenue Service will launch a campaign to alert consumers of a new tax benefit for auto purchases between Feb. 16 and the end of the year. Consumers may be able to deduct the cost of any sales and excise taxes, a provision that could lead to as many as 100,000 new car sales.

Source: Associated Press