(AP) - President Barack Obama asserted unprecedentedgovernment control over the auto industry Monday, bluntly rejectingturnaround plans by General Motors Corp. and Chrysler LLC,demanding fresh concessions as the price for long-term federal aidand raising the possibility of controlled bankruptcy for eitherailing auto giant.

Obama took the extraordinary step of announcing the governmentwill back new car warranties issued by both GM and Chrysler, anattempt to reassure consumers their U.S.-made purchases will beprotected even if the companies don't survive.

"I am absolutely committed to working with Congress and theauto companies to meet one goal: The United States of America willlead the world in building the next generation of clean cars,"Obama said in his first extended remarks on the industry sincetaking office nearly 10 weeks ago. And yet, he added, "our autoindustry is not moving in the right direction fast enough tosucceed."

Obama, flanked by several administration officials at the WhiteHouse, announced a short-term infusion of cash for both firms, andsaid it might be the last for either.

Chrysler, judged by the administration as too small to survive,got 30 days' worth of funds to complete a partnership with FiatSpA, the Italian manufacturer, or some other automaker.

GM got assurances of 60 days' worth of federal financing to tryand revise its turnaround plan under new management with heavygovernment participation. The administration engineered the ousterof longtime CEO Rick Wagoner over the weekend, an indication of itsdeep involvement in an industry that once stood as a symbol ofAmerican capitalism.

Obama's announcement underscored the extent to which automakershave been added to the list of large corporations now operatingunder a level of government control that seemed unthinkable lessthan a year ago. Since last fall, the Bush and Obamaadministrations, often acting in concert with the Federal Reserve,have engineered the takeover of housing titans Fannie Mae andFreddie Mac, seized a large stake in several banks and installed anew CEO at bailed-out insurance giant American International Group.

The latest addition to the list, the once-proud auto industry,has struggled with foreign competition for more than a generation,then was further battered by the recession and credit crisisgripping the economy. Obama said 400,000 industry jobs have beenlost in the past year alone, many in Michigan.

Fritz Henderson, newly named as CEO of General Motors, issued astatement saying the company would work "to make the fundamentaland lasting changes necessary to reinvent GM for the long term."

Chrysler Chairman Bob Nardelli sought to assure customers,dealers, suppliers and employees that the automaker "will operate'business as usual' over the next 30 days," while working closelywith the government and Fiat to secure the support of stakeholders.

Sergio Marchionne, CEO of Fiat, issued a statement calling theObama administration's involvement "tough but fair, and we believewe will arrive at a result that will establish a credible futurefor this crucial industrial sector and that assigns the rightpriority to the repayment of U.S. taxpayers' funds."

Fiat executives have talked to administration officials about aproposal to acquire a 35 percent stake in Chrysler in exchange forsmall car technology, transmissions and other items that Chryslerhas valued at $8-$10 billion.

There was no immediate response from the United AutoWorkersUnion, which will be pressured to make additional wage and benefitconcessions under Obama's demand for a revised restructuring plan.One worker, Don Thompson, 56, of Chesterfield Township in Michigan,said automakers were being punished because of public anger overthe banking bailout. "They're using us for the mistakes they'vemade in Washington," he said.

Other workers were critical of what they see as a doublestandard in how Washington has dealt with the auto industry versusfinancial institutions, with the ousted Wagoner treated differentlythan the CEOs of troubled banks. "They're using him as a fallguy," said Frank Rowser, financial secretary for UAW Local 909.

When Wagoner leaves the automaker, he will take a financialpackage worth an estimated $23 million.

Ford Motor Co., the third member of the Big Three, has notrequested federal bailout funds.

Obama said bankruptcy would be a way for either GM or Chryslerto "quickly clear away old debts that are weighing them down sothey can get back on their feet," and stressed that either firmwould remain open.

"What I am not talking about is a process where a company isbroken up, sold off and no longer exists. And what I am not talkingabout is having a company stuck in court for years, unable to getout," he said.