Washington President Barack Obama plans to appoint senior administration officials — rather than a single “car czar,” as had been discussed — to oversee a restructuring of the auto industry.
Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers will oversee the across-the-government panel, a senior administration official said Sunday on the condition of anonymity because no announcement had been made.
“The president understands the importance of this issue and also understands that the auto industry affects and is affected by a broad range of economic policies,” the official said.
As the teams move forward, Obama “wants to make sure that we’re getting the expertise and input of agencies across the government,” the official said.
Difficult choices ahead
Obama and his aides face difficult choices on the fate of the U.S. auto industry, weighing the cost of pouring billions more into struggling companies against possible bankruptcies that could undermine plans to jump-start the economy.
General Motors Corp. and Chrysler LLC are racing against a Tuesday deadline to submit plans to the government. The plans are to be followed by weeks of intense negotiations ahead of a March 31 deadline for the final versions of the reports.
GM and Chrysler are living off a combined $13.4 billion in government loans. If they don’t receive concessions by March 31, they face the prospect of having the loans pulled, followed by bankruptcy proceedings.
Any bankruptcy would be particularly painful, with some economists predicting the country could lose 2 million to 3 million jobs this year and the unemployment rate, now 7.6 percent, could swell past 9 percent by the spring of 2010.
In television interviews Sunday, White House senior adviser David Axelrod didn’t respond directly when asked if the U.S. economy could withstand a GM bankruptcy. Nor did he directly address a question about whether the Obama administration would let GM go into bankruptcy.
“I’m not going to prejudge anything. I think that there is going to have to be a restructuring of those companies. I’m not going to get into the mode of how that happens. We’ll wait and see what they have to say on Tuesday,” he told “Fox News Sunday.”
Bankruptcy not an option
Executives at the two automakers have said bankruptcy is not an option because consumers would not buy cars from a company that might go out of business.
“How that restructuring comes is something that has to be determined,” Axelrod said. “But it’s going to be something that’s going to require sacrifice not just from the auto workers but also from creditors, from shareholders and the executives who run the company. And everyone’s going to have to get together here to build companies that can compete in the future.”
Enter the President’s Task Force on Autos. That group will use officials from the departments of Treasury, Labor, Transportation, Commerce and Energy. Members of the National Economic Council, the White House Office of Energy and Environment, the Council of Economic Advisers and the Environmental Protection Agency will also be involved, according to the administration official.
Obama also plans to name restructuring expert Ron Bloom a senior adviser to Geithner. He will not be the “car czar” pointman many labor and business leaders expected. Bloom, a former consultant to the United Steelworkers of America, will be doing much of the financial analysis for the administration.
Geithner is expected to be the only Cabinet secretary to be part of the panel, the senior administration official said. Deputy secretaries, however, would be involved.
Obama “felt it was important to have the treasury secretary as his official designee to oversee these loans,” the senior administration official said.