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WASHINGTON — President George W. Bush announced Friday that the federal government would provide up to $17.4 billion to troubled automakers General Motors and Chrysler, but warned that the loans would have to be repaid in several months if the companies fail to come up with restructuring plans that chart their return to profitability.

In announcing his decision at the White House, Bush reversed his opposition to tapping the $700 billion financial rescue fund for such a loan, and enacted through his executive powers what Congress failed to pass earlier this month. Bush also rejected calls from some to have the auto companies go into bankruptcy and reorganize themselves.

Bush said he took the action because he feared the collapse of the industry would "worsen a weak job market and exacerbate the financial crisis." Moreover, he said he did not want President-elect Barack Obama to have "to confront the demise of a major American industry in his first days of office."

Obama praised Bush’s decision, while warning at a Chicago news conference that "the American people’s patience is running out" with automakers. The president-elect urged the industry to "seize on this opportunity over the next several weeks and months to come up with a plan that is sustainable."

As part of the three-year loan outlined Friday, Bush said the automakers must prove that everyone involved in the industry will bear some of the pain, including corporate executives, who agreed to limits on their compensation.

"The restructuring will require meaningful concessions from all involved in the auto industry — management, labor unions, creditors, bondholders, dealers and suppliers," the president said. Bush said the United Auto Workers must agree to make wages competitive with those paid by foreign-owned auto companies that have plants in the United States.

But Bush sidestepped the contentious issue of defining a competitive wage. Some Republican members of Congress have said the UAW should adopt the wage scale paid by foreign automakers at U low fee pay day loans.S. plants, while the UAW has said it already made concessions in a 2007 contract. The union has said it would make further concessions. The UAW also has said that the major differential in costs between domestic and foreign companies is the cost of pension and retiree health care benefits, which the union said should not be figured into wage comparisons.

The UAW said in a statement it was "pleased" Bush had approved the loans but said it was disappointed at what it called "unfair conditions singling out workers," reflecting the union’s belief that the deal would require further wage concessions. The union said it would work with the incoming Obama administration to remove such provisions.

Louis Lataif, a former president of Ford’s European operations who is now dean of the Boston University School of Management, on Friday applauded Bush’s announcement as a necessary step but said it will "not be easy" for the automakers to prove viability in the three-month timeframe.

To do so, he said, the automakers "will probably take a bite out of the hide of suppliers, dealers and employees."

GM Chairman Rick Wagoner vowed to come up with a restructuring plan by the March 31 deadline, saying it would be "a blueprint for a new General Motors, one for our second 100 years." Chrysler Chairman Bob Nardelli also praised the deal and vowed to keep the commitment. Alan Mulally, Ford president, said the deal was crucial to his company, even though it was not asking for money immediately, noting that the "highly interdependent" nature of the auto industry meant that "the failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy."

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