President Obama indicated yesterday he would support more loans to struggling U.S. automakers, but only if they restructure to profitably make more fuel-efficient cars.

The statement came at a town-hall meeting in the White House, six days before his official plan to decide whether to grant the automakers more aid is due. “We need to preserve a U.S. auto industry,” he said.

But, he didn’t indicate he would give the automakers a free ride. “There’s been a lot of mismanagement of the auto industry over the last several years,” he said, adding, “I’m not willing to have taxpayer money chase after bad money.”

So, in examining the automakers’ restructuring plans, he’s looking for what he called “drastic changes.”

“Everybody is going to have to recognize that the current model, economic model, of the U.S. auto industry is unsustainable.  Even if sales go back to 14 million, which eventually they will, it's still a model that doesn't work.  Just trying to build more and more SUVs and counting on gas prices being low and that's your only profit margin, that's just not a model that's going to work.”

It will be interesting to monitor just how drastic the proposed changes from his Administration will be.

Still, one thing he said seems certain: “You're not going to see a situation where the U.S. automakers are gaining the kind of share that they had back in the 1950s.  I mean, we just didn't have any competition … back then….  This is going to be a competitive global market.”

Read the full transcript of the town hall meeting.

—Eric Evarts

Also read "Auto suppliers to receive up to $5 billion in aid" and "Obama pledges $2.4 billion for electric vehicles & technology."