New car czars? AutoNation CEO Mike Jackson and friends
Word leaking out of Washington D.C. is that the Obama administration is moving towards naming a car czar. Or maybe not.
It appears that the big sales drop in January, which once again left General Motors Corp. and Chrysler LLC perilously close to insolvency, put some new energy behind the search and appointment of the panel set to pick someone to oversee the loan program for the domestic auto industry – an arrangement that requires GM and Chrysler to prove their long-term viability before getting additional cash.
Right now the authority for distributing any more loans to the ailing carmakers is in the hands of some holdovers from the Bush Administration. At the same time, suppliers, who are facing financial disaster, and car dealers also are seeking a share of the federal aid being doled out by the Treasury Department.
The concept of an automotive commissar might seem to run counter to the free-market and even libertarian leanings of most Big Three executives. But it is actually being quietly hailed around the Motor City, which has seen its political influence in Washington D.C. steadily decline over the last two decades. American car guys are now despised by both the Democratic environmentalists who believe they threaten the planet and by Republican conservatives, who somehow have gotten it into their heads that Detroit still belongs to the French.
“I actually look forward to having a federal car czar,” said GM Vice Chairman Bob Lutz, in an interview with TheDetroitBureau.com, “because we’ve never had a point person in the administration to have a decent conversation with. There’s been no one with the concerns of the car companies at heart. If the czar diligently reports back (to Washington), this may lead to a sounder energy and transportation policy in the future.
Hopefully the new car czar will actually be able to unravel conflicting policies and regulations and help ease the burden on manufacturers. The czar also might be able to free up more cash for Detroit’s ailing automakers while avoiding a huge ruckus in Congress, though that could prove politically challenging. Judging from a story in today’s Wall Street Journal, Tennessee Republican Sen. Robert Corker is determined to ignore the severity of the unfolding recession and strike back at GM and Chrysler for getting loans in December.
Meanwhile, the United Auto Workers Union, which is almost certain to have a veto on the czar appointment, is also looking for major changes in the loan agreements that were used to disburse the cash to GM and Chrysler, back in December. UAW PresidentRon Gettelfinger has already said he wants the opportunity for the union’s researchers or Wall Street advisers to examine the books of the Asian and European automakers operating in the U.S. That’s essential, he has stressed, if the government demands that the UAW match its wages to what “transplant” workers now get. This is the last thing any of the foreign carmakers want.
Balancing all the conflicting pressures will be a tall order for any individual, which is why it might not be one person; the administration has floated the idea of a panel, perhaps a tripartite labor, management and government or academia panel.
However, the list of names that have surfaced remains relatively short. Steve Rattner seems to be the name at the top of the list but he really doesn’t seem to know much about the car business. GM’s Rick Wagoner said he would like the job to go to finance guy but that was before the latest flap over banker salaries. Roger Penske also has been mentioned but while the UAW would welcome Penske, environmentalists and Congressional Democrats would not. And this would pose a potential conflict-of-interest issue, because of Penske’s vast holdings in various automotive sectors. Mike Jackson of Auto Nation also has been mentioned, but he is unlikely to survive Gettelfinger’s veto pen. Steve Girksy, another Wall Street insider who is close to Gettelfinger, also might be up for the job, but he probably doesn’t want it. Former Fed Chairman Paul Volcker also has been mentioned.
Obama also likes academics and he could pluck someone from a University campus to fill the post, which would be cruel and unusual punishment for all involved.