The US government rejected on Monday the turnaround plans of General Motors Corp (GM) and Chrysler LLC but gave them a dose of tough medicine -- 60 more days to develop more sweeping restructuring. However, Auto experts believe the automakers still face an uncertain prospect although their potential for survival in such a hard time exists.

The two US giant automakers GM and Chrysler had been offered 60 days and 30 days respectively for short term working capital from government to further restructure. However, the government warned both could be put through bankruptcy to slash debts if they could not make demanded changes.

"We cannot, we must not, and we will not let our auto industry simply vanish," the president said Monday while announcing that he is giving both ailing automakers more time to come up with viable plans for their futures.

"My administration will offer GM and Chrysler a limited period of time to work with creditors, unions, and other stakeholders to fundamentally restructure in a way that would justify an investment of additional tax dollars; a period during which they must produce plans that would give the American people confidence in their long-term prospects for success," Obama said.

"What we are asking is difficult. It will require hard choices by companies," the president said. "It will require unions and workers who have already made painful concessions to make even more. It will require creditors to recognize that they cannot holdout for the prospect of endless government bailouts. Only then can we ask American taxpayers who have already put up so much of their hard-earned money to once more invest in a revitalized auto industry."

The White House autos panel headed by former investment banker Steve Rattner marked a stunning reversal for management at both automakers. It forced out GM's CEO Rick Wagoner and approved the naming of an interim chairman and disclosed that GM planned to replace a majority of its board of directors in the coming months. It also demanded that Chrysler complete a tie-up with Fiat SpA for obtaining a government aid loan of 6 billion U.S. dollars.

The government has prescribed a dose of tough medicine, the two ailing automakers in the face of liquidation, have no choice but to take them.

GM's new CEO Fritz Henderson said "We have significant challenges ahead of us and a very tight timeline. I am confident that a stronger, healthier GM will play an important role in revitalizing America's economy and re-establishing its technology leadership and energy independence."

Chrysler Chairman and CEO Bob Nardelli said "while we recognize that we still have substantial hurdles to resolve, Chrysler is committed to working closely with Fiat, the administration, US Treasury and the task force to secure the support of necessary stakeholders."