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Bankruptcy Threat Is Necessary: Auto Nation CEO

Natalie Erlich|Writer/Producer
Tuesday, 17 Feb 2009 | 10:12 AM ET

The threat of government-backed bankruptcy is necessary to drive "breakthrough" structural changes for the auto industry, said Mike Jackson, AutoNation chairman & CEO.

"I hope they can restructure these companies without using it, but I for one say, you cannot take the thread off the table," Jackson told CNBC Tuesday.

Detroit on Deadline
Discussing the big disconnect in the auto industry which is slowing down sales, with Mike Jackson AutoNation CEO and CNBC's Phil Lebeau

(See the accompanying video for the complete interview.)

While the stimulus package is a good step, said Jackson, it is not the full answer to the nation's economic problems.

“We need an energy policy; we’ve never had it in 40 years,” he said. “The missing link is this idea that you can have a policy that pursues cheap gasoline for the US economy at the same time you push industry to sell fuel efficiency. The two things don’t go together.”

AutoNation & BP CEOs on Long-Term Energy Needs
Discussing the stimulus legislation's aid to the energy industry and the future of the economy and long term energy needs, with Mike Jackson, AutoNation chairman/CEO; Boone Pickens, BP Capital CEO H. Wayne Huizenga, Huizenga Holdings chairman

(See the accompanying video for the complete interview.)

Gasoline prices determine the type of vehicles that people buy and how they use them, Jackson pointed out to CNBC’s Carl Quintanilla.

“At $3 a gallon they talk about fuel efficiency; at $4 a gallon they’ll really purchase fuel efficiency; but we’re back to $2 a gallon and I’m stocked with fuel-efficient cars as far as the eye can see that nobody wants to buy,” said Jackson.

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