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February 16th, 2009
05:30 AM ET

White House to create task force to oversee auto industry

Suzanne Malveaux
White House Correspondent

As auto giants General Motors and Chrysler face Tuesday's Feb. 17th deadline to submit plans to show the government how they can repay billions in federal loans, the White House is creating a Presidential Task Force on Autos to oversee the restructuring of the auto industry, a senior administration official said.

The task force will include members from the Departments of Treasury, Labor, Transportation, Commerce, and Energy, the National Economic Council, the White House Office of Energy and Environment, the Council of Economic Advisers and the EPA, the official said.

It will be overseen by Treasury Secretary Tim Geithner and NEC Director Larry Summers.

Geithner will oversee the loan agreements with the automakers.

Teams at the Treasury Department and the National Economic Council are working with the automakers and stakeholders to prepare for their February 17th submissions, the official said.

Between February 17 to March 31 "the auto companies and stakeholders are expected to show progress in meeting the restructuring goals set forth in their plans" the senior administration official said.

The offical said the Adminstration would work with the automakers on a daily basis over the next two weeks on their strategies to repay their loans.

Despite weeks of speculation over whether the Administration would appoint a "car czar", the senior administration official said there would be none.

Ron Bloom, a nationally recognized restructuring expert, will be joining the Administration's team as a senior advisor at the Treasury Department, the senior administration official said.

He's a former Vice-President of Lazard Freres & Co. LLC, and a former restructuring expert for labor for the U.S. Steelworkers.

The team will provide advice, analysis and counsel to Geithner and Summers regarding the auto industry.


Filed under: auto bailout • Suzanne Malveaux
soundoff (15 Responses)
  1. DJ Heinlein (Clairemont, CA)

    At this point I wonder what the executives at the auto manufacturers will do with the money when they obtain the government loans. How come the government is requiring the auto companies to merely list a payback plan and not include a spending plan? Am I under the misconception that an entrepreneur should build a detailed business plan on how the money will be spent and a list of obtainable business goals that could prove valuable to turn a profit in order to pay back the loan? I am not a business expert, but if I were to invest a large amount of money in a business I would like to know that it will be put to good use.

    February 16, 2009 at 9:22 pm |
  2. RJ (Washington)

    Broken Promises!

    This will be the legacy of the American Auto Industry.

    Poor quality and horrible resale to the consumers who purchased their products.

    Unsustainable benefits to the UAW blue collar workers and retired workers who followed blindly the UAW.

    Worthless stock certificates to those who purchase stock to have a part of the American Dream.

    Worthless bonds for those that dared to believe they could change and choose to ignore they had not in 30 years.

    Well at least some will have something to smile about.

    Could you please post a list of the top 20 executives for the “Big Three” in the last 10 years and their annual earnings total.

    February 16, 2009 at 9:08 pm |
  3. Edward Catano

    Buyout not Bailout.

    Our government should not bail out any car company.

    Our government should encourage Exxon/Mobile to purchase at least
    two of the car companies.

    Give Exxon/Mobile tax breaks on future profits from their new aquisition and get out of the way.

    Exxon/Mobile would not have much trouble in marketing their vehicles wherever they sell gasoline. Offer new car buyers a big discount on the purchase of their gas for their cars.

    A Whatbox? no brainer.

    February 16, 2009 at 4:57 pm |
  4. Bruce Hoff

    Good grief does Sharon ever run out of hot air?
    According to Kristin Dziczek (Center for Automotive Research) average wages for workers at the big 3 was just $28 per hour as of 2007. Thats under $60,000. Workers are under heavy physical demands and skills that must be acquired over the course of their careers. The wages at Honda, Toyota, and other foreign manufacturers (in their U.S. factories) was somewhere between $20 and $26 per hour.
    The unions are a bargaining agent for the employees that sit across the table from the (over paid) fat cats to discuss the wages and working conditions of the employees. For all they do they receive about 1 hours pay per month from employees that are happy to have skilled negotiators at such a cheap price. The fat cats pay scads of high paid attorneys mega salaries to get labor cheap.
    Many of the cost saving and improvements to the auto structures come from the employees themselves. As to the gas guzzling, thank your elected officials as they set the standards not the unions and not the employees.
    Sharon, you came in with the right idea, but went way off track!
    If you get rid of the skilled employees and their bargaining agent (who also doubles as a watch dog over the fat cats) you might as well close the door on "Made in America". It would take years and billions to retool a work force.

    February 16, 2009 at 3:49 pm |
  5. Sharon S

    I agree that these companies need to bankrupt and restructure, first thing should be get rid of the Union, that stupid organization does nothing for anyone but pad their own pockets and make companies give outragious wages to average workers!

    As I said before what are they going to do with all these over priced, badly, cheaply made autos they can't seem to sell?

    take them apart and rebuild them into something worth having would be my suggestion? YOu can reuse the steal and many parts!

    They are Never going to be able to sell these old gas guzzlers as they are and way over priced to boot!

    February 16, 2009 at 1:43 pm |
  6. Sharon S

    By the way considering they are folding and need our help I don't see their car prices going any lower as a matter of a fact I have checked and GM has uped the prices of their cars? Go figure? They make sucky vehichles no one wants and instead of lowering the prices to get rid of them, they go up?

    And Nothing will change in GM or any other American made car company until they get rid of those overpaid employees and that stupid Union that makes them over pay people to put a bolt in!

    So I am not going to hold my breath on this one, restrucuturing would have to begin with getting rid of the Union and then to set the pay at a moderate average pay wage! Because these employees are NOT that intelligent I know, they put a bolt in a hole and get paid $30 an hour to do it! and then we end up paying way to much for their crappy made cars!

    Forget it I will never buy another AMerican made car until they are made way better and more economically priced!

    So there is a few pointers for you guys
    Get rid of the Union
    Set the wages to moderate
    Lower the prices on the autos
    Make better Autos, more gas economical
    Better built

    In Other words, get rid of everyone who works there and the Union and start over!

    February 16, 2009 at 1:37 pm |
  7. Sharon S

    How about getting rid of all the Heads of these companies who are obviously just greedy rats and restructuring from there? I only hope they will do a better job than they did with the big bank bailouts?

    Are the Car Companies going to have strict guidelines to go by? Because they did not give the Banks NOT ONE guideline NOT ONE restriction and we as the Taxpayers have seen our Money being given out to these greedy, pathetic idiots who run these Banks into the ground and yet they recieved handouts, bonuses, and fat paychecks and all these crazy perks!

    So I really hope this car thing does NOT turn into the circus that the Bank Bailout did!

    Paulson should be brought up on charges of doing a lousy job of handing out OUR money to those overpaid, greedy SOBs on Wall Street!

    February 16, 2009 at 1:31 pm |
  8. sean brizendine

    sounds like the big 3 will live to see another day.
    "sean in santa rosa"

    February 16, 2009 at 12:13 pm |
  9. Annie Kate

    What happens if their restructuring plans do not meet expectations? Do they have to repay the bailout money? And if they do what happens if its already spent and they can't repay it? You can't get blood from a turnip so they say.

    February 16, 2009 at 10:57 am |
  10. earle,florida

    Let me be one of the many this morning that's awe-struck by this administrations incapability to make firm ,and deliberate decisions regarding this," to big to fail, bloated pre-historic auto industry"! Now were going to create more beuracracy to get in the way of Chapter 11 Bankruptcy Re-Organization Courts&Masters? This is grossly obstructionist,and extremely costly to the american taxpayers in the end,...! Our we living in a relocated communist Russia?

    February 16, 2009 at 9:54 am |
  11. Joanne Pacicca, Solvay, NY

    Yes, probably a better solution than having one person in charge (car czar).

    February 16, 2009 at 9:50 am |
  12. Cindy

    UMM...why didn't they do this oversight thing with the banks!? Seems like they are falling down on the job. So they have to harass the auto industry to no ends but will dole out billions to banks and Wall Street with no questions asked and no over sight...why?

    Cindy...Ga.

    February 16, 2009 at 9:28 am |
  13. Dr Mark Carl Parisien

    Dr Mark Carl Parisien says: there are huge numbers of cars going unsold. What will happen to these vehicles? who will buy them?

    February 16, 2009 at 8:39 am |
  14. Michael C. Mchugh

    Here's a radical idea. Why not make an arrangement for the employees to buy out these bankrupt auto companies on liberal terms? Just turn them into cooperatives? At the very least, we should have a system of co-determination as they do in Germany.

    I would argue that the employees could do no worse than the old managers that have run this industry into the ground, and they would absolutely have an interest in saving their jobs.

    Everyone knows that the American auto industry should produce greener cars, and I think this new arrangement would actually nake it easier to do that.

    February 16, 2009 at 7:41 am |
  15. Tammy, Berwick, LA

    Let socialism ring! What does the White House staff know about running the car industry? A former union guy as the voice of reason in this. i feel safe. Unions are part of the industry's problem right now. Since when does government have to stick its grubby little hands into every entity of the private sector? If you want to help, give money with stipulations, but then let the industry solve its problems. All I know is this. If the government is intervening in the US industry, I'll be sure to buy Japanese-made again. If you thought American-made sucked before, it really will once this administration is through "fixing" the problem.

    February 16, 2009 at 6:15 am |