Obama and Auto Task Force Are Hands on with Industry Resructuring

David Shepardson / Detroit News Washington Bureau

Washington -- The Obama administration will take a much more hands-on role in the restructuring of General Motors Corp. and Chrysler LLC, providing both with short-term aid but insisting on and overseeing immediate dramatic changes.

The administration has set strict timetables for GM and Chrysler to complete restructuring and if required changes are not made is likely to force the automakers into bankruptcy in the coming months.

The companies are likely to go even further in cutting staff and closing plants in order to prove their viability.

The administration's auto task force agreed to provide Chrysler with short-term aid for the next 30 days as the automaker works to complete a tie-up with Itay's Fiat SpA and said it would consider loaning the partnership up to $6 billion if a deal can be finalized.

But it warned that if Chrysler and Fiat cannot come to terms on a partnership, the Auburn Hills automaker would not get any more taxpayer money -- a move that would likely force the company's liquidation....more

Barack Obama’s auto task force is open to auto aid!

WASHINGTON—President Barack Obama’s auto task force is “open minded” about giving car companies additional aid and will use “all the resources” of the federal government to achieve agreements that avoid bankruptcy, said Steven Rattner, the US Treasury’s chief auto adviser.

US auto suppliers may get some aid, and the task force plans to meet a March 31 deadline for assessing General Motors Corp. and Chrysler Llc. viability, Rattner said in an interview. “We are open-minded about committing additional resources to ensuring a viable domestic car industry,” he said.

“We will bring all the resources of the government to bear on these various stakeholders and try to reach a fair compromise, a set of compromises,” Rattner said. He added, “Bankruptcy is not our goal nor a desirable outcome. Our goal is to end up with viable car companies.”

GM and Chrysler, surviving on $17.4 billion in US aid, have requested as much as $21.6 billion in additional government loans. Obama’s auto task force is assessing the automaker proposals as it recommends whether to supply additional aid or tip the car companies into bankruptcy.

“We’re not going to simply hand out dollar bills on Pennsylvania Avenue,” he said, adding that stakeholders might sense “the government will end up solving all problems, and it’s just not going to happen here.”

On Monday GM’s chief executive Richard Wagoner met with the task force in Washington, a person familiar with the matter said.

Wagoner also planned a session with German Economy Minister Karl-Theodor zu Guttenberg later that day, according to a statement released by the German Embassy. The meeting will be about GM and its European subsidiaries, including Opel, Ulrich Sante, a German Embassy spokesman, said in an interview.

Wagoner is being joined at the meetings by chief operating officer Fritz Henderson, according to the person, who requested anonymity because the sessions are private. The task force gathering was to discuss GM’s efforts to reduce costs and restore profit, said the person, who declined to be more specific.

Information was exchanged in the meeting, and no decisions were made, the person said.

Austan Goolsbee, an Obama task force member who was asked about the GM session on Bloomberg Television, said he wouldn’t talk about details of what happens in auto meetings.

“The President’s been totally clear that he’s committed to supporting American industry,” Goolsbee, a member of the White House Council of Economic Advisers, said in the interview. “Anybody who wants money from the US government, it’s got to be a bridge to somewhere, not a bridge to nowhere.”

Treasury Secretary Timothy Geithner and National Economic Council director Lawrence Summers lead the task force, which will help decide to supply more aid or tip the automaker into bankruptcy. (Bloomberg)...More
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