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Obama: No choice but to take majority stake in GM

Saturday, May 30, 2009

Obama: No choice but to take majority stake in GM

Gordon Trowbridge / Detroit News Washington Bureau

Washington — President Barack Obama said his administration had no choice but to take a majority stake in General Motors in a television interview that aired Saturday.

"That was the only way we were going to be able to structure the deal," the president told NBC’s Brian Williams in an interview taped on Friday. Obama said the government will likely end up with something less than the 72.5 percent of the rebuilt company that is the maximum it could take under an arrangement that is likely to send GM into bankruptcy on Monday. "But we’re going to have a majority stake," he said.

Obama repeated the familiar argument that the government had no choice, in the current economic climate, but to invest billions of dollars to prevent GM’s collapse.

"My preference would have been to stay out of it completelty," Obama said. "But the alternative was to potentially see a liquidation bankruptcy in which (an) enormous institution with a huge impact on our economy, particularly in a lot of Midwestern states, simply gets broken up into pieces, and in the current deep recession that we’re in, could have had horrendous effects in terms of the overall economy."

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