Obama Lives in a Yellow Submarine, Is Full of Hope for GM and Chysler

While GM and Chrysler are in limbo over the Chapter 11 bankruptcy law, President Barack Obama yesterday expressed his growing optimism concerning the two US carmakers.

Apparently, his sudden morale boost came after Chrysler finally reached an agreement with the Canadian Auto Workers.

"I'm actually very hopeful, more hopeful than I was 30 days ago, that we can see a resolution that maintains a viable Chrysler auto company out there," Obama was quoted as saying by Autonews at a White House news conference.

For a quick reminder, large banks agreed to reduce Chrysler's $6.9 billion debt to only $2 billion in cash. What Mr. Obama didn't know last night is that hedge funds are not so keen on forgetting about the Chrysler debt. As we reported today, one of the inside sources who told AP about the developments added that “this is the one shot when everybody had a chance to say yes or no. You had 46 different people here, and they said no."

The same optimism was displayed by Obama when referring to the other Chapter 11 contender. He also said that he wants to limit the US government's role behind the automakers.

"That's my goal in this whole process. I'd like to get the United States government out of the auto business as quickly as possible."

Given all the sales reports and rumors surrounding mergers and such, the two US automakers are not exactly swimming in clear waters and it's hard to understand all the optimism behind Barack Obama's statements.

GM's recently submitted survival plan, for instance, is not exactly a reason for optimism as it only casts a dark cloud of disappointment over the entire company and dealer network.
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