Autos Task Force Opposes Bankruptcy Option
An Obama administration task force considering the fate of General Motors and Chrysler is discouraging bankruptcy protection as an option for the struggling companies, two senators said Tuesday.
Michigan Democratic Sens. Carl Levin and Debbie Stabenow said they argued against bankruptcy as a way to restructure GM and Chrysler. In meetings Tuesday with members of the panel, the lawmakers said Obama's team did not push bankruptcy as a viable choice.
"I think they agreed that nobody should be talking about bankruptcy," Levin said. "That's not their goal. They don't want to exclude anything but that's not what their goal is."
Stabenow said the task force was in a "fact-finding mode" and had also met with auto suppliers on Monday. The senator said she "strongly discouraged" bankruptcy as a way to revamp the two companies, which are living off $17.4 billion in loans and are seeking an additional $21.6 billion.
Obama's auto task force is trying to restructure GM and Chrysler by March 31 and the panel is expected to meet with GM and Chrysler executives later this week. If the companies fail to make a convincing case during the next six weeks, the administration could pull the loans and essentially force the companies into bankruptcy protection.
Stabenow said she met with Steven Rattner and Ron Bloom, two top advisers to Treasury Secretary Timothy Geithner, who is leading the task force, and members of Obama's National Economic Council.
Levin said he asked the task force members about how "do they see an auto industry in America surviving. I was interested in attitude and intent" and how to encourage bondholders to make sacrifices to help the companies reach terms in the loan agreement.
"They were very careful not to comment on the plans that had been presented to them other than the fact that they were carefully analyzing them," Levin said.
Members of the panel also met with Michigan Reps. John Dingell and Sander Levin. Levin, the senator's older brother, said they had a "very constructive meeting ... They're fully engaged and they're ready to tackle these issues and they know they have a major role to play in getting all of the stakeholders to participate."
General Motors has said it could run out of money by the end of March and needs $2 billion next month and $2.6 billion in April to remain solvent.
Chrysler has requested an additional $5 billion in loans and wants the government to approve an alliance with Fiat SpA.