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Admin. aide defends GM bankruptcy moves

Admin. aide defends GM bankruptcy moves
President-elect Barack Obama (L) stands with University of Chicago economist Austan Goolsbee as he announces the creation of the president's Economic Recovery Advisory Board during a news conference on November 26, 2008 in Chicago. Former Federal Reserve Chairman Paul Volcker, who preceded Alan Greenspan as Fed chair from August 1979 to 1987, will head up Obama's new advisory board and Goolsbee will serve as the board's staff director and chief economist. (UPI Photo/Frank Polich/POOL) | License Photo

WASHINGTON, June 7 (UPI) -- An adviser to U.S. President Barack Obama says General Motors Corp.'s government-engineered bankruptcy does not benefit union workers over other stakeholders.

Responding to criticism from U.S. Sen. Richard Shelby, R-Ala., that Obama's moves to restructure the giant automaker constituted socialism, White House Economic Recovery Advisory Board Director Austan Goolsbee Sunday defended the GM bankruptcy during an appearance on "Fox News Sunday."

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"If you look at the facts, this is not a circumstance where they've handed everything to the union," Goolsbee said. "All the stakeholders have made sacrifices. The unions and workers have made major cuts."

Goolsbee said rather than making out well under Chapter 11, GM workers have agreed to thousands of job cuts and substantial reductions in wages and benefits.

"They had restructuring of their pension and health obligations, and they made more sacrifices than, as a comparison, in the steel industry, where there was no government involvement," Goolsbee said.

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