Obama issues ultimatum for US carmakers

Barack Obama has issued an ultimatum for US carmakers urging them to hammer out a viable restructuring plan if they seek more federal aid. 

The US President on Monday insisted that US automakers should try to protect the ailing industry as it is 'an emblem of the American spirit.' 

Obama blamed the collapse of the industry on a failure of leadership 'from Washington to Detroit' over the past years. 

"And so today, I am announcing that my administration will offer GM and Chrysler a limited period of time to work with creditors, unions and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success," the president said at the White House. 

Obama has rejected to merely bailout the car industry, conditioning the federal aid on a major management overhaul on the part of the car industry. 

Less than an hour after the White House announcement, Chrysler revealed that it was forming a partnership with Fiat, while at General Motors Corp. new leaders took charge after the chairman was forced to step down. 

General motors said in a statement that the company would "address the tough issues to improve the long-term viability of the company, including the restructuring of the financial obligations to the bond holders, unions and other stakeholders." 

Earlier today, Democratic Senate Majority Leader Harry Reid had praised Obama's unwavering stance in handling the US auto industry issue. 

"We will not give these companies a blank check," the top Senator said. 

Reid hailed Obama's efforts to protect taxpayer's money that is expected to salvage the auto industry, expressing hope that the President's move would prompt the industry to build more fuel-efficient cars to ensure its long-term survival.