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Task Force to Handle US Auto Restructuring

Posted February. 17, 2009 04:52,   


The Obama administration will not appoint a single “car czar” to oversee the revamping of its auto industry, and will instead establish a task force of economic experts.

Citing a top official at the Obama administration, the New York Times reported the new measure yesterday. The unexpected shift came a day before General Motors and Chrysler complete broad restructuring plans they must file with the Treasury Department by Tuesday.

The daily said President Barack Obama prefers keeping the politically delicate task in the hands of his most senior economic advisers rather than appointing a powerful car czar to fix Detroit.

The official also said restructuring expert Ron Bloom was named a senior adviser to oversee a presidential panel on the auto industry, along with Treasury Secretary Timothy Geithner and National Economic Council Chairman Lawrence Summers.

A former investment banker, Bloom has advised unions in the troubled steel and airline industries.

The Presidential Task Force on Autos will draw officials from several agencies including the departments of the Treasury, labor, transportation, commerce and energy, according to the administration official.

The policy shift was apparently affected by the failure of unions and bondholders in GM and Chrysler to narrow their gaps in the revamping deliberations despite the imminent deadline on the viability plans they are preparing for the government.

Many of the task force members are working closely with the two automakers on the plans.

The two automakers received a combined 17.4 billion dollars in bailout funds at the end of last year, but GM needs an additional three billion dollars and Chrysler five billion dollars to avoid bankruptcy. If they fail to win congressional approval, they could eventually face bankruptcy.

Ford was excluded from the first round of restructuring because it said it required no federal aid, but asked Congress for a credit line of nine billion dollars.

One of President Obama’s top advisers said the administration has not ruled out a government-backed bankruptcy as a means to overhaul the automakers.