February 16th, 2009
09:25 AM ET
6 years ago

White House braces for auto makers seeking federal funds

WASHINGTON (CNN) - As auto giants General Motors and Chrysler face Tuesday's 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 (NEC), the White House Office of Energy and Environment, the Council of Economic Advisers and the Environmental Protection Agency, 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 Tuesday submissions, the official said.

From 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 adminstration would work with the automakers daily over the next two weeks on their strategies to repay their loans, the official said.

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 join the
administration's team as a senior adviser at the Treasury Department, the senior administration official said.

Bloom is a former vice president of Lazard Freres & Company LLC, and is a former restructuring expert for labor for the U.S. Steelworkers.

The team will provide advice and analysis to Geithner and Summers about the auto industry.

Updated 9:25 a.m.

Full story

soundoff (58 Responses)
  1. not so fast

    don't give it to them, we need to change, mass transit is the only way to solve these problems. It will never be the same. Take those workers and put them in a different industry that makes sense for the future. Stop spending money on things that are failing, the auto industry is not working and it will never work.

    February 16, 2009 04:09 am at 4:09 am |
  2. Laura

    "From February 17 to 31"

    Say what? February has only 28 days this year.

    February 16, 2009 04:14 am at 4:14 am |
  3. John

    Automakers want a bailout now?

    Well, why the hell not?

    Gains privatized.
    Liabilities socialized.

    February 16, 2009 04:37 am at 4:37 am |
  4. S.M.R.

    Again!!! Why don't they cut the wages slightly,cut back on some benefits,no more bonuses, the ceo's should take a huge pay cut for now till the companies get their head above water ( they have had huge bonuses that they never deserved, so #1 give some back #2 pay cuts for now or #3 fire them.When will this ever end?

    February 16, 2009 04:43 am at 4:43 am |
  5. Anny

    Wise saying: Help a man when he is in trouble and he will remember you when he is in another trouble.

    February 16, 2009 05:18 am at 5:18 am |
  6. walter

    If the unions weren't rewarding incompetence these companies might have a fighting chance!!

    February 16, 2009 05:38 am at 5:38 am |
  7. Robert E. Fisher, MSW

    I am sick of hearing from the negatavism of the Republicans. The main stream media continues to perpetuate this obstructionist, racist, propaganda!

    February 16, 2009 06:08 am at 6:08 am |
  8. A tired American

    Why not have some of us regular people on the committee in an unpaid but advisory capacity? In this day of near-instant telecommunication it would be workable, and sometimes Washington insiders lose sight of the big picture.

    February 16, 2009 06:22 am at 6:22 am |
  9. Corwin7

    American auto makers need to decide if thier best interests lay with the american people or the petroleum industry that's raping them...

    February 16, 2009 06:29 am at 6:29 am |
  10. Dawn

    Our Government needs to be get with it, like going into the 21st Century, not locked into the 20th century. Our Cars needs to be green and energy efficent. With Bush he was stuck in that century and so has our Auto industry.

    Remember back in the early 70's when we had an oil embargo and the Auto industry came up for smaller cars and not gas guzzlers and muscle cars, but who blocked that was the big oil companies, and once again came the gas guzzlers. So I think that someone must take on the responsiblities of overseeing the big three and making them come into the 21st century.

    February 16, 2009 06:57 am at 6:57 am |
  11. Jose F

    IDIOTS! Who are they going to sell cars to? Bailout is doing nothing for the regular middle class consumer other than saving of 15 dollars a paycheck. Can I buy a car and pay 30 dollars a month?

    February 16, 2009 06:59 am at 6:59 am |
  12. Willy Brown

    "Geithner will oversee the loan agreements with the automakers." Great were going to T-R-U-S-T Turbo Tax Tim with Americian Tax payer's money?

    February 16, 2009 07:18 am at 7:18 am |
  13. Ken

    What a joke !This administration is going to give them what ever they want as the Unions claim the Democrats owe them for their contributions. Just continuing to throw taxpayers money at everything seems to be the plan of this administartion. Without REAL restructuring or a managed Bankruptcy, this is a waste of taxpayers money. This must be the second leg of the STOOL, the third leg will be billions more for the Banks. Wake Up America before it's to late, if it ise'nt already ! We are going to be wallowing in this STOOL for Generations to come !GOD Help Us ALL !!!

    February 16, 2009 07:34 am at 7:34 am |
  14. Cindy, PA

    We need a Task Force to investigate every Congress person and Senator that voted for the “Porkulus” Spending bill. This was gross negligence. Not one dime should go to the auto companies until it’s determine if Congress was negligent in their duties of their office.

    February 16, 2009 07:41 am at 7:41 am |
  15. eddie

    If no written promises of where the money is going no money to the auto makers.

    February 16, 2009 07:52 am at 7:52 am |
  16. mw

    FRESHMAN LOSER.

    February 16, 2009 07:55 am at 7:55 am |
  17. S.B. Stein E.B. NJ

    I wonder if there is a way to have GM to reoganize without declaring bankrupcy. It would help them a long way.

    February 16, 2009 07:59 am at 7:59 am |
  18. MS Redhead

    NO MORE MONEY to automobile manufacturers and unions to reward bad business decisions and greed.

    February 16, 2009 08:01 am at 8:01 am |
  19. Kenneth

    The government could bail out the big 3 all day long and I still wouldn't slow down while driving past any of their dealerships in any future search for a new car or truck. I absolutely would not have a new GM, Ford or Dodge vehicle. Why? Because I've already had one in the past. I've already had that sick feeling you get when you still owe payments on the car and you have to repeatedly return it to the shop to get this and that fixed. Because I know just how much in the car's value drops when you drive them off the lot. Because I know how dadgum ugly they all are especially the Chevy and Fords.

    I say they should not get another penny, and if they do, I will certainally remember those in Washington who give it to them next time I vote!

    February 16, 2009 08:15 am at 8:15 am |
  20. a good read

    China dumps cheap steel here to kill jobs.

    February 16, 2009 08:15 am at 8:15 am |
  21. vette66

    When did February get 31 days. Will all are cars now look like a Hugo or other socialist made "cars"?

    February 16, 2009 08:24 am at 8:24 am |
  22. WellDuh

    Conventional restructuring is not the solution. Automotive Research and prototype development needs to be set up as separate independent operating corporations to keep federal money where it will profit everyone. Otherwise it will get wasted the same way it always has: pampering both executives and unions while large changes in business are rejected.

    The idea would be that the research companies produce basic car designs for the future without traditional car company prejudice and interference - energy efficient, safe and meeting basic customer needs. Manufacturers would be left with first option to purchase limited time exclusive designs from their offspring. Otherwise new designs and patents would be offered to American companies first then world wide if there were no takers. Only American deals could be exclusive for any time; otherwise there would just be standard royalties to any purchaser. Luxury and style design consideration would still be left to the end manufacturing companies.

    Federal funds will be used to purchase all research assets from the mother companies giving them some liquid cash for the near future. Automotive companies should be required to make all existing patents and research available to these new research spinoffs as wells as existing research facilities at market price.

    The remain funds would provide 3-5 years operating capital to the research companies weighted toward the first 2 years then tapering off rapidly later. While working researchers would come over to the new research company, all upper management must come from outside the commercial automotive industry and have some scientific research credentials as well as relevant business management experience or training.

    February 16, 2009 08:24 am at 8:24 am |
  23. jaye

    I just don't know about all this – I don't know if more money will help the auto industry or not. I'm an accountant but have no idea what their books show or just how bad their situation really is.
    One thing i know is this: the republican party has become Obstructionist...they have turned into a bunch of big mouthed thugs that have no intention of helping Obama clean up the mess they created. Read my lips...the past 8 years of republican rule has all but destroyed our country and now they go about as if they know whats best for our country, and the truth is they know nothing. Lowering taxes is NOT the answer – if anything, taxes should be raised. Our states are broke, and so is our government – and we can thank the republicans for that. Hear that John McShame???

    February 16, 2009 08:24 am at 8:24 am |
  24. wasabe kid

    Perhaps we could outsource CEO and lesser executive jobs in the auto industry to qualified business school graduates in India or China? They would certainly work cheaper and they would probably do a better job.

    February 16, 2009 08:27 am at 8:27 am |
  25. Carl from MI

    Let them go under?? Are you out of your FREAKIN' MINDS, REPUBLICANS???

    Who's going to build planes, tanks, armored vehicles and personnel carriers in a time of WAR, IF NOT THE U.S. AUTOMAKERS? Maybe we should let Toyota or Subaru build them?? How about Audi or KIA???

    Have you all forgotten what the big 3 did for our nation during WWII?? Remember they built 100,000 airplanes in a year in order to beat the Luftwaffe?? Hello???? McFly????

    And Republicans have the GALL to call themselves patriots!!!!

    February 16, 2009 08:30 am at 8:30 am |
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