New team will steer a new auto industry
Obama's task force has only 6 weeks to make big decisions
WASHINGTON -- President Barack Obama will name a task force today to oversee the remaking of the U.S. auto industry, as General Motors Corp. and Chrysler LLC press for late concessions to work into turnaround plans that are due to the government on Tuesday.
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According to a White House official, the Presidential Task Force on Autos and other Obama administration officials will act together instead of a single car czar in deciding whether GM and Chrysler are making sufficient progress to keep the $17.4 billion in loans they already have received and field any requests for additional aid, including Chrysler's urgent bid for an additional $3 billion.
"The administration understands the importance of the American auto industry," said a White House official Sunday, speaking on condition of anonymity. "It wants to work with these companies as they seek to become viable and thriving businesses. But we're also clear-eyed about the magnitude of the restructuring going forward."
The team will find itself facing a six-week deadline to make several critical choices by March 31, including deciding whether bankruptcy could be used by one of the automakers to revamp business. David Axelrod, Obama's chief adviser, did not rule out bankruptcy when asked about it Sunday.
"We need an auto industry in this country," he said on NBC's "Meet the Press." "There are millions of lives, livelihoods that depend on it. Not just at the auto companies, but spin-off manufacturers, dealers and so on. So we have a real interest in seeing the auto industry survive."
The team will be headed by Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers. It will include staffers from several agencies, including the departments of Transportation, Energy, Labor, Commerce and Treasury, and the Environmental Protection Agency.
The only outside expert hired by the administration so far is Ron Bloom, an adviser to the U.S. Steelworkers who had worked with unions in several industries on corporate restructuring and employee ownership plans.
Obama said Wednesday he's prepared "to offer serious help" to Detroit's auto industry, but only if its executives, workers and suppliers share the sacrifices necessary to keep the companies afloat in the worst U.S. market in decades. The White House official said no decisions on next steps for the industry, including Chrysler's $3-billion request, had been made yet.
The team already is reviewing a request for suppliers for up to $25.5 billion in federal aid, including more loan money to Detroit automakers to speed payments to suppliers. Steep cuts in production over the past few months have put many suppliers on the brink of collapse.
GM and Chrysler's turnaround plans, due Tuesday, are expected to outline many tough choices, including additional job cuts and plant closures. Both are required to show moves toward concessions from the UAW, bondholders and their parts suppliers.
The task force idea is consistent with a request from Michigan's senators to appoint a board with some knowledge of manufacturing rather than a single person with little industrial experience to oversee the automakers. But Sen. Carl Levin, D-Mich., said the delay in naming officials to monitor the industry raised the burden for automakers.
The panel must "understand that every country in the world that has a domestic auto industry has already taken significant steps to safeguard the survival of their auto industry," Levin said in a statement to the Free Press.
"The panel will have to work overtime to try to bring all of the stakeholders together to achieve the plan for financial viability required on March 31."
Contact JUSTIN HYDE at 202-906-8204 or jhyde@freepress.com.
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