Obama Aide Defends GM, Chrysler Strategy
Thursday, June 11, 2009
A senior aide to President Obama tried to reassure lawmakers yesterday that the government has acted strictly as an "investor of taxpayer resources" and is playing no day-to-day role in overseeing the restructuring of General Motors and Chrysler.
"We're not going to get into micromanaging their decisions," Ron Bloom, a member of the president's auto task force, testified before the Senate Banking Committee.
Several lawmakers seemed skeptical. In recent weeks, Congress has been inundated by the protests of auto workers, dealers, suppliers and consumer watchdogs who claim their rights are being trampled in the government-orchestrated rush to revamp the automakers. Lawmakers have drafted legislation to help dealerships that have been closed, and committees are holding hearings to question the automakers' cost-cutting.
"There are profitable dealers that are being closed," said Sen. Kay Bailey Hutchison (R-Tex.). "And I still don't understand -- when the dealer buys the car, the dealer provides the real estate, the dealer provides the showroom and the repairs, and rents the signs. How is it a drag on the company?"
Bloom reiterated the White House's stance that it played no role in setting the scope of these reductions. But he promised that the administration would help bring together the car companies and the stakeholders who have felt wronged.
Bloom's was the first public appearance by a member of the auto task force before Congress. He was joined by Ed Montgomery, the president's point man for distressed auto communities and workers.
Some members of the Senate committee wanted to know when the government would relinquish control over the companies. Taxpayers would hold sizeable stakes in both companies once their restructurings are complete.
"The most difficult question, of course, is how Treasury intends to get out," said Sen. Richard Shelby of Alabama, the committee's ranking Republican.
Bloom declined to give specifics. But he said several scenarios suggest "there is a reasonable probability that we can get most if not all of our money back."
And he emphasized that emerging from bankruptcy should permanently fix the automakers' long-troubled finances.