US President Barack Obama has decided to launch a government task force for restructuring the struggling US auto industry instead of naming a “car czar” with sweeping powers, a senior administration official said on Sunday.
Obama is appointing Treasury Secretary Timothy Geithner as his “designee” for overseeing auto bailout loans and as co-head of the new high-level panel together with White House economic adviser Lawrence Summers, the official said.
But Obama has dropped the idea of having a single appointee empowered to handle the politically sensitive task of revamping the once-mighty auto sector.
“There is no ‘car czar,’” the official said, speaking on condition of anonymity.
There was no immediate word on when or how Obama planned to unveil his strategy for dealing with the auto crisis.
But General Motors and Chrysler have to submit new turnaround plans by today showing how they can be made viable after receiving US$13.4 billion in emergency aid.
It had been widely known that Obama was considering naming a high-profile car czar — in fact, some critics had said the delay added uncertainty about the industry’s prospects. While there was no immediate explanation why the idea was abandoned, Obama’s approach will leave the auto industry overhaul in the hands of his closest economic advisers.
The administration official who disclosed Obama’s plans said the automakers were expected to submit their restructuring proposals on time and that government teams were working to help resolve remaining issues.
Automakers and their stakeholders will be expected to show progress in meeting their restructuring goals by month’s end.
The new panel, the Presidential Task Force on Autos, will be drawn from across the government, including the departments of Treasury, Labor, Transportation, Commerce and Energy, and will be overseen by Geithner and Summers, the official said.
Adding another wrinkle to the auto oversight plan was the choice of Ron Bloom, a restructuring expert with investment banking experience who has advised labor unions, as senior adviser to Treasury on the auto crisis.
GM welcomed the creation of the new panel, saying, “We expect to meet soon with this team to share GM’s detailed restructuring plan to restore our company to viability and to meet the requirements of its loan agreements.”
Meanwhile, Obama heads out west this week to sign the US$787 billion economic stimulus package and to tackle the home mortgage foreclosure crisis.
While predicting Americans would begin to see a decline in the skyrocketing unemployment rate once the money begins to flow, top Obama aides said on Sunday that the economy would continue its negative spiral in the near future.
“The president has said it’s likely to get worse before it gets better,” Obama senior adviser David Axelrod said. “But I do expect the rise in unemployment to be retarded.”
The president’s determination to sign the stimulus bill into law in Denver today suggests Obama will continue taking his economic message to the American people.
“He is determined to keep in touch with the American people who sent him here to do this job,” Axelrod said on Fox News Sunday.
White House spokesman Robert Gibbs said Obama had taken “unprecedented” steps in a bipartisan effort to include Republicans in the legislative process. But Senator John McCain remained critical, declaring the stimulus would create what he called “generational theft” — huge federal deficits for years to come.