President-elect Barack Obama, in a Meet the Press appearance yesterday, said that management of the Big Three had been deficient. From MSNBC:
…while President-elect Barack Obama accused car industry executives of a persistent “head-in-the sand approach” to long-festering problems.
Obama was pointed in his criticism of management, but came out for conditional assistance to the automakers. He called for changes that would have to be made by all big three stakeholders, including labor, creditors and suppliers. The Obama critcism was joined by Senator Chris Dodd, who called for the removal of G.M. CEO Rick Wagoner as a condition of any loan package. Dodd is a key player in formulating the package that will be submitted next week, and that package is now begining to take shape.
Behind the scenes, House and Senate aides were hammering out legislation that would dole out billions to automakers within a week — but yank back the money if a government-run board and overseer named by President George W. Bush decided the companies weren’t taking steps to overhaul themselves and become viable. A congressional aide outlined the emerging measure on condition of anonymity because it is not yet completed.
The plan would draw the emergency aid from an existing loan program meant to help the automakers build fuel-efficient vehicles. The size of the package hasn’t been finalized, but it is expected to be about $15 billion, several congressional aides said.
It would create an oversight board comprised of key Cabinet secretaries — from the departments of Treasury, Energy, Labor, Commerce and Transportation — plus the Environmental Protection Agency administrator to oversee a broad auto industry restructuring.
In return for the money, the carmakers would have to agree to terms similar to those placed on banks that receive funds under the $700 billion Wall Street bailout: to limit their top executives’ pay packages, cease paying dividends, give the government a chunk of future gains and guarantee that taxpayers would be reimbursed before any other shareholders, the aide said.
The bill under discussion would place the special investigator overseeing the bank rescue in charge of keeping tabs on the auto bailout.
The bell is now tolling for G.M. CEO Rick Wagoner. Will government oversight of the Big Three include some sort of auto czar? And what shape would that job take? More to come this week as the package gets finalized and sent up for a vote.
http://www.msnbc.msn.com/id/22425001/vp/28096607#28096607
Bill Manzi.com 