WASHINGTON (Legal Newsline) - Building cleaner cars will be required of two troubled U.S. automakers if they are to receive help from the Federal Government, President Barack Obama said Monday.

Obama said the restructuring plans submitted by Chrysler and General Motors in an effort to receive more taxpayer funds did not go far enough and made his own demands for changes in the companies' practices. A group of state attorneys general has maintained that the companies should put stricter emissions regulations in place if they are to receive taxpayer money.

"But I'm confident that if each are willing to do their part, if all of us are doing our part, then this restructuring, as painful as it will be in the short term, will mark not an end, but a new beginning for a great American industry -- an auto industry that is once more out-competing the world; a 21st century auto industry that is creating new jobs, unleashing new prosperity, and manufacturing the fuel-efficient cars and trucks that will carry us towards an energy-independent future," Obama said.

"I am absolutely committed to working with Congress and the auto companies to meet one goal: The United States of America will lead the world in building the next generation of clean cars."

GM and Chrysler are seeking $22 billion in federal funds after receiving more than $17 billion in December. Obama rejected their restructuring plans but offered a 60-day period in which the companies can work with creditors, unions and other stakeholders to meet his demands.

In addition to cleaner cars, Obama wants Chrysler to partner with Italian automaker Fiat because its current management team has "executed an impressive turnaround.

"Fiat is prepared to transfer its cutting-edge technology to Chrysler and, after working closely with my team, has committed to build -- building new fuel-efficient cars and engines right here in the United States," Obama said.

Seven state attorneys general wrote to Congress in November, urging lawmakers to force tougher emissions requirements on the companies asking for federal money.

Those attorneys general were Rhode Island's Patrick Lynch, Vermont's William Sorrell, California's Jerry Brown, Maryland's Doug Gansler, Massachusetts' Martha Coakley, Connecticut's Richard Blumenthal and Oregon's Hardy Myers

"(I)f the U.S. auto industry is serious about taking millions in aid from our pockets, it must show us that it too is serious about global warming and taking a leading (and therefore profitable) role as a producer of fuel-efficient and carbon-sensitive vehicles," the letter says.

The State of California has set its own emissions standards that are stricter than the federal Environmental Protection Agency's and have been adopted by other states. The automotive industry say states can not preempt federal law and have appealed a ruling that says they can.

In January, Obama told the EPA to reconsider California's request to impose its own limits on greenhouse gas emissions.

"The federal government must work with, not against, states to reduce greenhouse gas emissions," Obama said. "The days of Washington dragging its heels are over. My administration will not deny facts, we will be guided by them. We cannot afford to pass the buck."

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.