Top GOP Lawmakers Say GM, Chrysler Should File Chapter 11

March 8, 2009 1:59 p.m. EST

Miami, FL (AHN) - Two top Republican congressional lawmakers said on a Sunday news talk show that General Motors should file for Chapter 11 bankruptcy protection and reorganize before seeking any more federal money.

Rep. John Boehner, R-CA, the House Republican leader, said GM must show that it has a long-term plan to make it viable again before the government gives the nation's largest automaker any more money. GM already received $13 billion from the government to stave off bankruptcy. Chrysler received $4 billion. Ford refused the money and said, although ailing, it could make its way through the economic crisis without a loan from the government.

Sen. John McCain, R-AZ, told FOX News Sunday that "the best thing that could possibly happen to General Motors, in my view, is they go into Chapter 11, they reorganize, they renegotiate the union management contracts and come out a stronger, better, leaner, more competitive automotive industry."

GM and Chrysler were given the money late last year under the agreement they would demonstrate by the end of this month that they had plans in place to become viable companies once again. A major provision of the loans was that the companies would negotiate labor contracts and retirement benefit costs, which are weighing heavily on both companies.

GM reported that it had lost $31 billion in 2008, and said it needs more than $30 million now to keep in business.

President Barack Obama is sending an auto industry task force to Detroit on Monday to meet with GM and Chrysler executives to discuss immediate options.