WASHINGTON–Warning that they can’t depend on unending taxpayer dollars, President Barack Obama on Monday gave General Motors Corp. and Chrysler LLC a brief window to craft plans that would justify fresh government loans.

DETROIT IN CRISIS: The ouster of Rick Wagoner, shown at a February news conference, is a milestone in the state’s intervention in the economy.

“We cannot, we must not, and we will not let our auto industry simply vanish,” President Obama said at the White House.

“What we are asking is difficult,” he said. “It will require hard choices by companies. 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 hold out for the prospect of endless government bailouts.”

The remarks come a day after the administration ousted GM Chief Executive Rick Wagoner and rejected the restructuring plans that GM and Chrysler had hoped would lead to another infusion of government cash. Instead, the White House is giving GM 60 days to come up with a strategy for viability. Chrysler has a month to wrap up a partnership with Italy’s Fiat SpA.

GM is expected to hold a news conference Tuesday morning to respond to the White House’s rejection of its restructuring plan, a person familiar with the plans said Monday.

The administration says a “surgical” structured bankruptcy may be the only way forward for GM and Chrysler, and President Obama held out that prospect Monday.

“I know that when people even hear the word ‘bankruptcy,’ it can be a bit unsettling, so let me explain what I mean,” he said. “What I am talking about is using our existing legal structure as a tool that, with the backing of the U.S. government, can make it easier for General Motors and Chrysler to quickly clear away old debts that are weighing them down so they can get back on their feet and onto a path to success; a tool that we can use, even as workers are staying on the job building cars that are being sold.”

The firms, hobbled by the economic downturn and years of reliance on sport-utility vehicles, will receive an unspecified amount of working capital from the government while they hone their new plans.

Without a Fiat deal, the administration said Chrysler won’t receive any more taxpayer dollars. The administration expressed confidence GM can survive with more drastic action. Toward that end, Chief Operating Officer Frederick “Fritz” Henderson will succeed Mr. Wagoner.

GM and Chrysler received a total of $17.4 billion in government loans in December and have requested another $22 billion to keep them going through this year. President Obama’s auto task force combed through the firms’ restructuring plans to judge if they merit the additional funds. The verdict released Sunday is that in their current form, the plans don’t justify any new taxpayer resources.

Several news outlets are reporting that GM has adjusted their asking price for temporary salvation at $4 Billion in December and another $4 Bill in January. Convincing Congress to bail out these American Automakers might be an impossible feet, but at least Rick knows how to show off not one but two of Chevy’s best new products at one time.