Car Czar Gives Way to Car Czars
January 22, 2009
By Michelle Krebs
Timothy Geithner, President Barack Obama's nominee for U.S. Treasury Secretary, testified to Congress Wednesday that the new administration intended to assembly a team of experts to oversee the loans to automakers.
Geithner told the Senate Finance Committee during his confirmation hearings that the team would have "expertise in manufacturing, in restructuring, who understand how these labor contracts work."
Automakers should be thrilled at the news since it was frighteningly evident during last fall's Congressional hearings on aide to U.S. automakers that most government officials and Congressmen are generally ignorant about the extremely complex auto industry. Finding a single individual who understood all of the aspects of the auto industry would be impossible. And if President Obama's picks for other government posts are any indication, the car czars will a bright, talented and pragmatic lot.
Geithner said that any aid to automakers should be "in support of a comprehensive restructuring that will leave the industry in a stronger financial position where they can be profitable and healthy without government support...That's going to require very, very substantial changes by all stakeholders."
General Motors just received its second installment of government loans this week. GM received $5.4 billion Wednesday, bringing the total received so far to $9.4 billion. It expects to receive a total of $13.4 billion. Chrysler has received $4 billion and is seeking an additional $3 billion. Ford has said it does not need the loans right now but would like access to a credit line in case the economy deteriorates more than is expected.
GM and Chrysler have two critical dates -- February 17 and March 31 -- to file viability plans with the government in order to receive further funds.
Before being nominated to be U.S. Treasury Secretary, Geithner was president of the New York branch of the U.S. Federal Reserve, where he gained experience in using government funds for bailouts of financial institutions.
Despite criticism over Geithner's initial failure to pay taxes, which he later paid and an omission for which he apologized, he is expected to be confirmed.
Posted by Michelle Krebs at 8:23 AM under Chrysler , Commentary , Ford , GM , Personalities | Comments (0) | digg this | Seed Newsvine
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