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Washington - With the US auto industry skidding toward an abyss, President Barack Obama unveils his plan on Monday for the sector which has called for billions more in government aid to weather the economic storm.
But the US president warned on Sunday the automakers still needed to do more if they are to qualify for further government bailout funds.
"They're not there yet," Obama told CBS's Face the Nation.
"We think we can have a successful US auto industry. But it's got to be one that's realistically designed to weather this storm and to emerge - at the other end - much more lean, mean and competitive than it currently is."
Obama's auto task force has been working to solve the woes of US automakers which have been pushed to the brink of bankruptcy in the economic recession amid a global downturn in car sales.
Two of the firms, GM and Chrysler, have asked for another $21.6bn in US aid on top of the $17.4bn in emergency loans approved in December as they struggle to survive.
Ford, the other member of Detroit's Big Three, has said it has enough cash to survive the downturn without government aid.
GM and Chrysler must come up with viability plans to show the path to profitability, requiring deeper job cuts, new agreements with unions to slash costs and acceptance by bondholders of a plan to cut the automakers' debt.
Obama told CBS: "There's been some serious efforts to deal with a combination of long-standing problems in the auto industry and the current crisis, which has seen, you know, the market for new cars drop from 14 million to nine million."
But he said to ride out the crisis there had to be "sacrifices from all parties involved, management, labour, shareholders, creditors, suppliers, dealers."
"Everybody's going to have to come to the table and say it's important for us to take serious restructuring steps now in order to preserve a brighter future down the road," the president said.
Obama task force lead advisor Steven Rattner told the Detroit Free Press this month that "bankruptcy is not our goal," but that court restructuring may be needed if there is no alternative.
Automakers are pledging to increase their commitment to building greener cars in return for extra government loans that will help the automakers avert collapse.
"Taxpayers should expect a return on loans to help us a bridge the current, difficult market conditions. Additional support will help us accelerate our efforts to reinvent GM and the cars and trucks we build," GM spokesman Tom Wilkinson said in a statement.
"We want to play a significant role in revitalising America's economy and re-establishing its technology leadership."
An expanded requirement for carmakers to developing new, green technology is expected to be one of the requirements the Obama administration will impose on carmakers in return for additional loans, industry observers said.
Analysts say the administration is basically pursuing a two-track approach by offering them short-term help through the bridge loans while offering longer-term financing for new research and development.
Earlier this month, the US Treasury announced aid of up to $5bn for auto supply firms hurt by a credit squeeze and the collapse in vehicle sales.
The program is aimed at US-based suppliers, allowing them to sell their receivables into the program at a modest discount, giving them access to needed liquidity.
The aid package came after warnings that dozens of automotive suppliers could lose their credit lines or end up in default because of problems with auto manufacturers, notably General Motors.
US auto sales extended their downward spiral in February, falling 41% from a year ago to the lowest rate since December 1981 amid a deepening economic crisis. And some analysts say March sales could be equally bleak.
GM officials also said privately that they are close to announcing buyers for the company's Hummer brand and for a spin-off of its Saturn nameplate.
The announcement on Hummer could come next week, while GM has told its dealers that they should have a plan for the future of the brand ready by mid-April.
- AFP
