ANALYSIS - U.S. auto panel gives officials flexibility
WASHINGTON (Reuters) - The White House opted for a team of generals rather than a czar to sort the future of the U.S. auto industry, giving it flexibility to bring pressure from several fronts, including the Oval Office, if necessary.
President Barack Obama was not required to appoint a so-called "car czar" as part of the Bush administration's $17.4 billion bailout of General Motors Corp and Chrysler in December.
And Obama quietly buried the idea borne in a congressional hearing last fall, despite speculation he was ready to appoint one, as political winds overall in Washington grew more turbulent this month and efforts by the companies to secure concessions from key groups slowed.
"On balance, I believe it was the right way to go because all of the departments on the task force are going to have to be involved," said Rep. Sander Levin, a Michigan Democrat, who with other lawmakers consulted with administration officials about the choice.
"Involving them right now hopefully will expedite the work because there isn't a lot of time," Levin said, referring to a March 31 deadline for GM and Chrysler to prove their commercial viability as a condition of continued government support.
Formally, the work begins Tuesday when the companies submit restructuring plans to the Treasury Department.
Treasury Secretary Timothy Geithner will oversee the review along with White House economic adviser Lawrence Summers, a senior administration official said on Sunday.
Ron Bloom, a labor-based restructuring expert, will serve as an adviser to the Treasury Department, which has also retained law firms with bankruptcy restructuring experience and an investment adviser.
The administration official said the task force would analyze the turnaround plans over the next week or two and will meet with company executives.
Automakers and their stakeholders will be expected to demonstrate progress in meeting goals in their plans by the end of the month, the official said.
In addition, the task force will tap expertise from the Labor, Transportation, Commerce, and Energy, the National Economic Council, the White House Office of Energy and Environment and the Council of Economic Advisers and the Environmental Protection Agency (EPA).
IHS Global Insight analyst Aaron Bragman said more details on the task force are needed to see if it will work better than a czar approach and suggested Geithner has enough to do already with the economy in recession.
"My initial thought is that it is probably going to make things more complicated because you are not dealing necessarily with just one person like you would in a car czar or even a bankruptcy court judge," Bragman said.
He speculated that the task force approach could potentially increase the chances of a government-funded bankruptcy. "A lot of these players who are now in this task force, Geithner in particular, have suggested that bankruptcy is a possibility," Bragman told Reuters.
Rep. Thaddeus McCotter, Michigan Republican, said he wants to ensure the panel has someone with direct industry experience ad there was still room for Obama to add such a figure to the group.
"You don't want a professor to fix your seized up engine," McCotter said.
Gary Chaison, an industrial relations expert at Clark University in Worcester, Massachusetts, said the panel appears to have a diversity of views and interests.
"This will satisfy stakeholders. At the same time, the White House can control it and have input," Chaison told Reuters.
A Treasury-led group oversaw billions in loan guarantees to the airline industry earlier this decade, including an installment for US Airways Group to help it exit bankruptcy.
(Additional reporting by David Bailey and Matt Spetalnick)
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