Voices of Power Transcript

Lois Romano Interviews Treasury Secretary Timothy Geithner

Monday, May 25, 2009; 11:30 PM

ROMANO: Welcome, Treasury Secretary Timothy Geithner. Thanks for joining us today.

SECRETARY GEITHNER: Nice to be here.

ROMANO: So you are laying the groundwork for--for GM to be forced into bankruptcy, maybe as early as June 1st?

GEITHNER: Well, I wouldn't say it that way. What we're doing is helping this company , this critically important company, the American economy, put in place a restructuring plan that will not allow it to be--emerge viable without government support over the long term, allow it to continue to play this critical central role in the whole American experience.

ROMANO: But by the time you're done with GM, you will have invested, what, $45 billion? How much is too much?

GEITHNER: Well, the President has made it clear that we're prepared, if we see a restructuring plan with enough shared sacrifice that allows this company to emerge viable over time, that we're prepared to support that. We think that's a totally legitimate, appropriate use of public resources, given the cost to the American economy of allowing this company to go under, and so I think we'll do what's necessary, protect the taxpayer but allow these firms to emerge viable over time.

ROMANO: You have already asked for the resignation of one CEO. What's going to happen to Fritz Henderson? Are you going to ask for his resignation?

GEITHNER: Let me tell you the basic principle, but I wouldn't encourage you in that direction. [The] basic principle is that when companies get to the point where they have to come to the government and ask the taxpayers of the country to support exceptional assistance, then we have an obligation to make sure that the board and management of these companies are strong enough to lead the companies towards a stronger future. That's a basic obligation I think anybody would expect us to have. That's the way financial decisions are made in the private sector, and that's the approach we bring to these kind of difficult questions.

Of course, we do this with extreme reluctance, extreme care, only when we think it's the only option, but that's the basic principle.

ROMANO: So what's going to happen to Fritz Henderson?

GEITHNER: I think he's doing an exceptional job under difficult challenges--and that's what I'd say.

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