The U.S. task force overseeing the restructuring of the auto industry today said the plans submitted by General Motors and Chrysler failed to show how they could be viable. Under the plan:
GM will receive 60 days of additional working capital to resolve the situation.
Chrysler, about 80 percent controlled by private equity firm Cerberus Capital Management, will have 30 days to complete an alliance with Fiat SpA.
The task force said an expedited bankruptcy process to help GM and Chrysler eliminate unsustainable debt loads may be the best path if out-of-court restructurings with creditors cannot be negotiated.
The government said it will back the warranties of all new GM and Chrysler vehicles sold during the turnaround period. The measure is intended to reassure consumers who are fearful the companies will go out of business.
A new car czar, Edward Montgomery, will oversee the turnaround. Montgomery is a top labor economist and former deputy secretary of labor. He will serve as director of recovery for auto workers and communities.
Other key findings: