Barack Obama, the US President-elect, yesterday issued a veiled threat to the heads of America’s three biggest car companies by insisting that they should resign if they failed to restructure and reform their businesses in return for a federal bailout.

His comments came as Washington drew up draft legislation to lend $15 billion (£10 billion) to General Motors (GM), Ford and Chrysler. While politicians on Capitol Hill are still trying to agree the terms of a bridging loan — less than half of what the carmakers had requested last week — they hope the Bill will be voted on and forced through in the next few days.

Mr Obama said: “If the management team that is in place does not understand the urgency of the situation and is not willing to make the tough choices and adapt to these new circumstances, then they should go. I have said repeatedly that to allow the auto industry in the United States to collapse at a time when we are seeing record joblessness is unacceptable. I have also said that it makes no sense for us to shovel more money into the problem if you have not seen an auto industry committed to restructuring.”

The financial lifeline has been devised as a short-term emergency measure to keep the carmakers afloat until Mr Obama takes office on January 20. After his inauguration, it is expected that the three companies will return to Washington to request a longer-term bailout. The $15 billion loan is expected to provide enough cash for all three to survive until March. But Washington is trying to use the promise of a bailout to wring as many concessions as possible from them over cost cutting, together with commitments to building fuel-efficient cars in volume.

Mr Obama’s threat is more measured than those from some of his Democrat colleagues. Christopher Dodd, the Democrat chairman of the Senate Banking Committee, said in a television interview yesterday that GM should be forced to merge with Chrysler if it wanted more money from the American taxpayer. He added that Rick Wagoner, the GM chief executive, should quit, saying: “I think he has to move on.”

Earlier, Mr Wagoner said: “The reason I have my job is because the board thinks I am tackling difficult issues. I serve at their pleasure as long as the board wants me to stay put.”

The veiled threat from Mr Obama also puts Alan Mulally, chief executive of Ford, and Robert Nardelli, head of Chrysler, in the firing line.

While politicians from both the House of Representatives and the Senate argue over the terms and size of the loan, and the type of control that Washington will wield to force restructuring of the industry, it is President Bush, who has less than six weeks left in the White House, who must sign off any new legislation.

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