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| Obama Administration has exit strategy for GM: White House |
| Llait K Jha/ PTI / Washington Jun 02, 2009, 09:28 IST |
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Despite taking a 60 per cent stake in the General Motors by pumping in an additional $30 billion, the White House has said the Obama Administration has a strategy to exit out of any involvement in the company, once it becomes "viable" and "profitable".
"There is an exit strategy. It's to get this company viable. It's to get the economy strengthened so that GM (General Motors) is producing cars that people want to buy, that Americans have the income to buy those cars, to do so in a restructured way that allows them to be profitable more quickly," White House spokesman, Robert Gibbs said.
"And then, in order to protect the investment that taxpayers have made, we would get out of any involvement in the company. That is the exit plan," Gibbs said yesterday.
He was responding to a query as to whether the Obama Administration had any exit strategy out of the GM or it wants to run the company.
Earlier in the day, President Barack Obama said that he had no intention to run the company on a day-to-day basis and that he has taken the "extraordinary measure" to become a 60 per cent stakeholder in the company just to save hundreds and thousands of people from losing their jobs.
"He does believe that the investment that we are making is structured in what is in the best interest of taxpayers, and that we will get out of this equity as quickly as possible in order to protect the investment that taxpayers have made," Gibbs said, defending Obama's decision to pump in $30 billion into General Motors.
Even though there is no timeline for the exit strategy, he said the Obama Administration would be involved in corporate governance of the company.
"We will be involved in corporate governance decisions, such as setting up a board of directors that is going to make those business decisions based on how to get the company to profitability," he said.
To a question, Gibbs said: "He (Obama) has a strong obligation to ensure that there is a management structure in place that is making smart business decisions." The obligation is to find people to manage General Motors when it emerges from bankruptcy as a different company, he added.
Government's stakes would be up for sale when there is substantial return on the investment and the company has shown signs of recovery.
"I think if the President was convinced that we had taken the steps to put the company on a path toward viability and that we could recoup for investors — meaning the taxpayers, in this case — their investment and ensuring that GM is continuing to take those steps, the president's eager to get out of any ownership stake in the auto companies," Gibbs said.
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