UPDATE:Levin:US Administration Asked GM To `Address' Bankruptcy Option
17 Februar 2009 - 9:27AM
Dow Jones News
U.S. President Barack Obama's administration has told General
Motors Corp. (GM) to "address" the possibility of the company
eventually filing for bankruptcy protection in a progress report
due to the government Tuesday, Rep. Sander Levin, D-Mich., said
Monday.
"They've been asked to address the issue of bankruptcy in their
plan but not to have that as an alternative plan," Levin said in a
phone interview. "That's my understanding."
Levin said he learned of the administration's request from a
"very, very good source" but declined to elaborate.
Attempts to obtain comment from the White House Monday were
unsuccessful, and a GM spokesman declined to comment.
On Sunday, David Axelrod, a senior adviser to Obama, declined to
rule out a government-backed bankruptcy as an option for
restructuring the auto industry.
"We're going to need a major restructuring of these companies,"
Axelrod said on NBC's "Meet the Press." "How that restructuring
comes is something that has to be determined."
Levin said he and other auto-industry allies in Congress
maintain that a bankruptcy filing by a domestic auto maker would be
disastrous to both the auto industry and the broader economy.
The plan that GM is scheduled to submit to the Treasury
Department on Tuesday is supposed to describe how the company will
restructure to ensure its long-term viability.
GM and Detroit rival Chrysler LLC have received the first
installment of a combined $17.4 billion in government loans and
could receive the next installment if their plans pass muster.
Also Monday, the Obama Administration was expected to name a
presidential task force to oversee the auto industry's
restructuring. The task force, which would take the place of a
previous proposal for a "car czar" to handle the job, will be
composed of officials from various administrative agencies and
likely an outsider - reportedly Ron Bloom, a special assistant to
the president of the United Steelworkers union and a former
investment banker.
White House spokesman Robert Gibbs told reporters Monday that
the announcement of the team could come shortly.
Rep. Thaddeus McCotter, R-Mich., said it was crucial that the
task force include members with a background in the auto
industry.
"It's one of the fundamental ways that government does the right
thing," McCotter said in a phone interview. "Because if there's a
problem, go to the people who deal with it every day and find out
how you think they should fix it."
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com