Obama on US Auto Crisis: “We Need to Provide Assistance!”

President-elect Barack Obama admitted in an interview with CBS that the US automotive industry urgently needs government assistance and acknowledged that a potential collapse of the Detroit 3 would be a “disaster” for the whole US economy. Speaking to CBS' “60 Minutes” audience, Obama expressed his confidence that the White House and the US Congress will reach an agreement next week that would help both the affected automakers and US citizens by preserving jobs and avoiding bankruptcy.

“For the auto industry to completely collapse would be a disaster in this kind of environment, not just for individual families but the repercussions across the economy would be dire. So it's my belief that we need to provide assistance to the auto industry. But I think that it can't be a blank check,” Obama said in an interview, pointing to the $25 billion loan package already approved by the Congress but still on hold due to a bunch of restrictions imposed by the lawmakers.

The funding program was mainly addressed to Detroit 3 in order to concentrate on production of fuel-efficient engines, which are said to represent the only solution to help automakers get out of the global recession and boost its sales.

“My hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all the stakeholders coming together with a plan what does a sustainable U.S. auto industry look like? So that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere. And that's, I think, what you haven't yet seen. That's something that I think we're gonna have to come up with,” Obama explained.

Talking about the loan package addressed to US auto companies, Obama said that “these are extraordinary circumstances” so affected companies should be helped until they get back on their feet. “Banks aren't lending as it is. They're not even lending to businesses that are doing well, much less businesses that are doing poorly. And in that circumstance, the usual options may not be available,” he said.

For the full interview with Barack Obama, check out CBS' website.