updated 3/8/2009 2:14:27 PM ET 2009-03-08T18:14:27

House Republican leader John Boehner said Sunday he doesn't support handing over more federal money to keep General Motors Corp. afloat unless the automaker develops a viable and long-term business model and can pay back government loans.

"Anything short of that is just throwing good money after bad," Boehner said on CBS's "Face the Nation."

As part of the deal that provided $17.4 billion in federal aid to General Motors and Chrysler LLC, the companies must seek changes in their contracts with the United Auto Workers labor union by March 31. The car companies, which have asked for an additional $21.6 billion in federal money, must bring their labor costs in line with those of foreign competitors' plants in the U.S.

Although Ford Motor Co. has not sought federal assistance, it has reached an agreement with the UAW to freeze wages and make other concessions. Union members were expected to finish voting on the proposed agreement on Monday.

While Boehner said he hopes that GM will not have to turn to bankruptcy, Republican Sens. John McCain of Arizona and Richard Shelby of Alabama said they want the automaker to seek bankruptcy protection, which would allow for reorganization.

"I think the best thing that could probably happen to General Motors, in my view, is they go into Chapter 11, they reorganize, they renegotiate their — the union management contracts and come out of it a stronger, better, leaner and more competitive automotive industry," McCain said on "Fox News Sunday."

Shelby, appearing on ABC's "This Week," said Chrysler and Ford as well as GM belong in Chapter 11 and then could get federal money as part of the process of reorganization.

"Short of that, the UAW will run those companies and run them into the ground," he said.

Boehner said GM's survival will depend on employees, stockholders and others with a financial interest in the company agreeing on a plan for the future.

"It's an important institution in our country. It impacts hundreds of thousands of jobs. But they have to do the serious work that they've avoided doing over the last 30 years if they're going to survive," he said.

Chapter 11 of the U.S. Bankruptcy Code frees a company from the threat of creditors' lawsuits while it reorganizes its finances under a court-approved plan. The company's reorganization plan must be accepted by a majority of its creditors. Unless, the court rules otherwise, the debtor remains in control of the business and its assets.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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