Panel, not "car czar," to tackle auto crisis

DETROIT — The Obama administration has dropped the idea of appointing a "car czar" to oversee the revamping of General Motors (GM) and Chrysler and will instead put the politically delicate task in the hands of a presidential panel, a senior administration official with knowledge of the plan said Sunday night.

President Obama is designating the Treasury secretary, Timothy Geithner, and the chairman of the National Economic Council, Lawrence Summers, to oversee the group. Geithner also will supervise the $17.4 billion in loan agreements already in place with GM and Chrysler, said the official, who insisted on anonymity.

The official also said Ron Bloom, a restructuring expert who has advised the labor unions in the troubled steel and airline industries, would be named a senior adviser to Treasury on the auto crisis.

The unexpected shift comes as GM and Chrysler race to complete broad restructuring plans they must file with the Treasury by Tuesday. The companies' plans are required to show progress in cutting long-term costs as a condition for keeping their loans.

By naming a task force rather than a czar, the president is reserving for himself any decision on the viability of GM and Chrysler, both of which came close to bankruptcy before receiving federal aid two months ago, the administration official said.

One of Obama's top advisers said Sunday that the administration had not ruled out a government-backed bankruptcy as a means to overhaul the automakers.

"We're going to need a restructuring of these companies," the adviser, David Axelrod, said Sunday on NBC-TV's "Meet the Press." He added that a turnaround of the companies would "require sacrifice not just from the autoworkers but also from creditors, from shareholders and the executives who run the company."

The automakers had been expecting the appointment of a car czar to break the logjam of negotiations with the United Auto Workers over the finances of a retiree health-care trust, and with bondholders about reducing the companies' debt.

Bloom is known for bringing his Wall Street experience as an investment banker to an advisory role as the "in-house" banker for the steel workers' union. With the auto union locking horns with bondholders in the GM revamping deliberations, Bloom appears to bring credibility with both the union and the debtors. Bloom could not be reached for comment Sunday night.

The role of the czar will now be assumed by the Presidential Task Force on Autos, which will draw officials from several agencies, including the departments of Treasury, Labor, Transportation, Commerce and Energy, according to the administration official.

Many of the task force's officials already have been working closely with GM and Chrysler on the viability plans they are preparing for the government.

GM and Chrysler are both expected to request more loans to stay solvent during what is shaping up as another miserable year for auto sales.

Chrysler's chairman, Robert Nardelli, has said his company needs $3 billion in addition to the $4 billion loan it received in January.

GM originally asked for $18 billion in aid in December. GM has borrowed $9.4 billion so far and is to receive $4 billion more, if the Treasury is satisfied with its revamping plan.

Representatives of GM and Chrysler could not be reached for comment Sunday night.