View from: Lauren Fix, The Car Coach® and Car-Ma Coach™
If the proposed auto industry rescue is going to come to fruition, and that should become clear this week as industry executives and union leaders testify before Congress, it makes sense for the government to name a "car czar" to watch over the Detroit Three as they spend $25 billion in taxpayer money.
While not a hands-on executive, this official might become a "super member" of the boards of Ford and GM, with veto power over decisions and the holder of the last word at Chrysler LLC, which is privately owned but also queuing up for public assistance. Ultimately, the appointee should be empowered to determine how the loaned funds are spent -- and to pull the plug if need be should things go from bad to hopeless. Ideally, government would have no occasion to interfere this aggressively in the day-to-day operation of an industry. But we're talking about $25 billion. This is about basic accountability.
The ideal person for the job would be both knowledgeable about the motor vehicle business and savvy about navigating the corridors of political power in Washington.
Some names leap to the fore, such as former Michigan Gov. James Blanchard, who as a congressman was instrumental in securing the 1979 federal loan guarantees that saved Chrysler Corp. Former Sen. Don Riegle was also heavily involved. Both ex-politicians have remained visible in Washington. And speaking of Chrysler, Lee Iacocca just turned 84 but doesn't seem to have slowed down much.
Even if Congress acts on the loans during its lame-duck session, an appointment may fall to President-elect Barack Obama, who takes office Jan. 20 and will not want the auto loans to be squandered on his watch. Since he's a professed believer in bipartisanship, Obama may want to inquire as to the availability of another former Michigan governor, Republican John Engler, now president of the National Association of Manufacturers, which includes the auto companies. Engler would probably have to take a leave of absence to avoid a conflict.
Also on the GOP side is Mitt Romney, the former Massachusetts governor, a Michigan native and the son of an auto industry leader. Romney made a fortune as a "turnaround specialist" in business before entering politics. Romney, of course, also could again be a Republican candidate for president in 2012, so Obama may not want to give him this much visibility. On the other hand, if the loans fail to save the industry...
There is surely any number of people qualified for this watchdog role, including some who would relish the opportunity to help reshape the industry for a brighter future. The main point is that, rather than making this one part of somebody's responsibility, overseeing the best use of $25 billion by an industry desperate for cash ought to be somebody's full-time job. Then the president -- and the financiers -- would know who is accountable.
Federal Loans to Automakers Could Come with 'Car Czar' Oversight
Sourced From: Detroit News, November 13, 2008
Situation
1. President-elect Barack Obama considering appointing an "auto czar"
2. Role to oversee emergency federal aid to automakers, exact tough corporate reforms
3. Also ensure taxpayers earn a return on any investment in auto industry
4. Car czar could serve as point person for federal agencies
5. Sen Levin (D-MI) supports Obama naming an auto or manufacturing czar
Significant Points
1. Automakers accepting loans likely would have significant oversight
2. Government could get shares in automakers that could balloon w/ recovery
3. Obama has 3 auto advisers (Furman, Tarullo, Steiner) but none named yet
4. MI Governor Granholm and former Congressman Bonior also advise Obama on auto industry
Background
1. Obama auto advisers include economic adviser Jason Furman, Georgetown University law professor Dan Tarullo, and former Clinton Treasury official Joshua Steiner, The "[Auto Czar] can't be some ideologue or someone with an ax to grind or someone who read about the auto industry in a pamphlet two years ago." -- David Cole, chairman, Center for Automotive Research
AND WHEN was the last time THE GOVERNMENT FULLY DISCLOSED HOW OUR MONEY IS SPENT?
They won't even tell you who gets bailout money, PSSSSSSSSST - IT’S A SECRET. It's starting to look like 1939 GERMANY all over again OR the British auto bailout of the 70's, which ruined a major manufacturer there.
Every time the government controls what we get, we don't get what we want. Could you imagine all American cars being the same boring beige box? No convertibles, no sports cars, no SUVs, no fun sedans. The Big 3 could lose their autonomy and that means fewer choices for us.
If Lauren had her way, the taxpayers wouldn't rescue the Big 3. The money should come from private industry such as the oil companies. They have the money, they've been in the bed with the auto industry for years, and it would certainly shift public perception about them. Furthermore, a low interest loan to the Big 3 from Big Oil would mean our auto companies would keep their autonomy and the oil companies could see a decent profit (something they're used to), especially if they are paid in stock shares.
Automotive Expert Lauren Fix (The Car Coach), award-winning author of three automotive books, ASE certified engineer, host of her own automotive TV show on DIY, race car driver, spokesperson for the Car Care Council, editor-in-chief for CarZen.com, and all-around TV news expert, is available to discuss the following topic all week.
For more info on Lauren, please visit www.laurenfix.com or catch me on twitter:
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