The automobile bailout has allowed the nation's major automakers to make important changes in their operations, but much remains uncertain about their viability moving forward, a government oversight office said.
General Motors and Chrysler have succeeded in reducing debt and production costs, cutting brands and rationalizing their dealership networks to weed out underperforming operators, the Government Accountability Office said in a new report.
These efforts, the GAO said, were a good start. But the report added: "Whether and to what extent these changes will improve Chrysler's and GM's profitability and long-term viability remains to be seen."
The GAO noted that the two companies, having gone through bankruptcy proceedings earlier this year, were still preparing new financial statements to account for the change in corporate identity, and so no hard conclusions could be made about recent operations.
GAO also said that the current economic environment made it difficult to assess the companies' long-term futures, saying that "whether enough time has passed for the impact of the structural changes to be seen is unlikely, especially given that the automakers have not completed restructuring, the economy is still recovering, and new vehicle purchases remain at low levels."
Moving forward, GAO recommended that the Treasury Department continue to hire employees with expertise in the auto industry. It also suggested that the department be open and explicit about the measurements it intends to use to assess the companies' operations in the future.
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