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Obama ‘confident’ about GM’s future

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SAN FRANCISCO (MarketWatch) — President Barack Obama said in an interview released Saturday that he was confident General Motors Corp. could thrive after restructuring, but he made no mention whether the ailing auto maker might have to enter bankruptcy to complete reorganization.

According to a report in the New York Times, Obama, in an interview with the C-SPAN cable television network, said he wanted the government to get out of the auto business as soon as possible, and he said that if some auto jobs never return, the government will work to ensure workers are effectively retrained.

GM (GM) is making plans to cut about 3,400 additional white-collar jobs in the U.S., the Detroit Free Press reports. GM has signaled that more salaried jobs would be lost in its stepped-up restructuring, but it did not give details. Earlier this year, GM cut 3,400 white-collar jobs from its U.S. operations as part of a global headcount reduction.

Officially, GM has until June 1 to come up with a plan that would convince Obama’s auto task force that the company has a viable blueprint for getting back on its feet financially.

That’s a tall order, given the company’s dwindling market share, staggering losses and the daunting challenge of finding buyers in the midst of the worst economic downturn since the Great Depression.

The clock keeps ticking. GM’s debt-for-equity offer expires Tuesday. The company said it would announce on Wednesday whether it will extend the offer in a bid to win over more bondholders, or let it expire. See full story on GM’s march toward bankruptcy filing.

The U.S. Treasury has provided GM with $4 billion in financing to help the automaker meet working capital needs and cover its dealership inventory payments.

The company will use $2.6 billion of the financing from the Troubled Asset Relief Program for working capital. The money, along with a previous $2 billion allotment, is in range with Treasury’s plan to provide up to $5 billion.

Another $1.4 billion is an accelerated payment that GM will provide to GMAC LLC to cover floor plan loans in the U.S.

Treasury also provided an additional $756.9 million to Chrysler LLC as part of its debtor-in-possession financing during bankruptcy.

© Copyright 2009 Investor’s Business Daily. Displayed by permission. All rights reserved.

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