Northwest Indiana's auto dealers expressed frustration Monday with the Obama administration's rejection of restructuring plans for General Motors and Chrysler, but most believe some kind of deal is around the corner.
"I'm always leery when the government is involved," said David Lawson, a partner in Harbor Automotive Group. "They don't have such a good track record when it comes to running the Postal Service, banks or anything else."
What auto dealers want now is some certainty, whether it be a restructuring of Chrysler and GM or a revised GM through bankruptcy, Lawson said.
Cary Bosak, owner of Bosak Chrysler Jeep in Merrillville, said it's becoming obvious the framework of a deal is in place. But he believes the Obama administration still is looking for unions and others to sign on the dotted line when it comes to concessions.
In the meantime, Bosak and other local dealers report it is business as usual at their dealerships, with most reporting healthy sales in the past couple of months. Heavy incentives, they say, are attracting buyers.
"The most important thing is that the president said GM is important to the car business and he's willing to do whatever is needed for it to survive," said Dan Keca, general sales manager at Napleton Cadillac. "Obama said he will do everything he can to have a viable General Motors."
Obama asserted unprecedented government control over the auto industry Monday, rejecting turnaround plans from General Motors and Chrysler and raising the prospect of controlled bankruptcy for either ailing auto giant.
Eager to reassure consumers, Obama also announced the federal government would immediately begin backing the warranties that new car buyers receive -- a step designed to signal it is safe to purchase U.S.-made autos and trucks despite the changes taking place in the industry.
In a statement read at the White House, Obama said he was "absolutely committed" to the survival of a domestic auto industry that can compete internationally.
"That's the good news. Warranties have been a concern," said Dan Blaskovich, general sales manager for Carroll Chevrolet in Crown Point. "We've been selling new and used vehicles and about 10 percent of our customers thought it was an issue."
"We told them that the government would back them as part of a bankruptcy, but now that the government has stated it, it's got credibility," Blaskovich said.
In an extraordinary move, the administration forced the departure of Rick Wagoner as CEO of General Motors Corp. over the weekend.
Obama said the government will give Chrysler 30 days to come to some sort of deal on a merger with Fiat SpA, the Italian automaker. If they are successful "we will consider lending up to $6 billion to help their plan succeed," Obama said.
GM so far has failed to make good on promises made in exchange for $13.4 billion in government loans. Chrysler, meanwhile, has survived on $4 billion in federal aid during the recession.
In progress reports filed with the government in February, GM asked for $16.6 billion more and Chrysler wanted $5 billion more.
Ford Motor Co., the third member of the Big 3, has not requested federal bailout funds, and was not included in the president's remarks on Monday.
The Associated Press contributed to this report.
