U.S. will guarantee GM, Chrysler warranties

In a bid to boost flagging auto sales, the federal government will pay for any warranty repairs on a General Motors or Chrysler vehicle if either company can't because of financial problems or a bankruptcy filing, President Barack Obama said on Monday.

"Let me say this as plainly as I can. If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired just like always," Obama said in a speech. "Your warranty will be safe. In fact, it will be safer than it has ever been. Because starting today, the United States will stand behind your warranty."

GM and Chrysler are at a high risk of bankruptcy as they face some of the lowest U.S. sales rates in 27 years, analysts have said. The government on Monday took several actions to help shore up the two automakers after forcing the resignation of GM CEO Rick Wagoner.

"Given where the industry is, these highly unprecedented actions are consistent with the unprecedented times we're in," Standard & Poor's analyst Robert Schulz told Reuters today.

Both companies have said that bankruptcy would snuff out sales because consumers wouldn't buy a car from a company that might not be around to honor the warranty and provide service and spare parts.