UPDATE: Obama:Hopeful Car Companies Will Emerge Even Stronger

U.S. President Barack Obama said Friday he hopes that car companies will stabilize and emerge even stronger from their current troubles.

Speaking at a joint press conference with German Chancellor Angela Merkel in Dresden, Obama also said he is very satisfied with the solution found to separate General Motors Corp.'s (GMQM) German unit Adam Opel GmbH from the U.S. carmaker.

"I am very pleased to see the resolution of the Opel situation here. We are very sympathetic towards each other...its not easy to help auto companies restructure and its not always popular," Obama said. "But it is also, we are convinced, the right thing to do. And I am hopeful that not only are we going to see these companies stabilize but also that they are going to emerge even stronger and more competitive in the international market place."

The German government said May 30 it selected Austrian-Canadian car parts maker Magna International Inc. (MGA) as a partner for Opel and agreed on providing EUR1.5 billion in bridge financing from the federal and state governments, paving the way for a takeover by Magna and its two Russian partners.

The Obama administration plans for the U.S. government to take a 60% ownership stake in GM, which has filed for Chapter 11 protection.

-By Andrea Thomas, Dow Jones Newswires; [phone]; [e-mail]