The troubles of the ailing auto industry are quickly becoming a major focus for President-Elect Barack Obama's young administration. As Congress and President Bush debate an industry bailout, sources indicate that Obama may favor creating a White House office, headed by an "auto industry czar," to oversee reforming the troubled American auto industry.
The Detroit News reports that both "Bush and Obama are signaling they may favor appointment of an auto czar to oversee the government's efforts to funnel emergency assistance to automakers." Congressional leaders and members of both the outgoing and incoming administrations have all said that automakers might receive federal aid only on certain dictions, including efforts "to further improve fuel efficiency and show that they have a plan to return to profitability. Automakers could also be required to give the government preferred stock in the companies and accept government representatives as board members. As in the 1979-80 Chrysler bailout, workers may have to make wage concessions."
The press was unable to get direct confirmation of the plan yesterday. John Podesta, the former Clinton administration official heading Obama's transition team, told the Washington Post "When we have an announcement about that, we'll raise it."
But some analysts like the idea. Seeking Alpha says the new President should "give restructuring authority to one individual, similar to the power that former Goldman Sachs CEO Hank Paulson has had with the financials. This position must be filled by an individual who would be well respected by the other CEOs, someone who knows the auto industry but won't be bogged down by its mediocre past, and someone who understands the art of the turnaround. As a pre-condition to receiving survival funding, the automakers and the unions must be forced to concede their restructuring rights to this new automotive czar. He can then act in the best interest for the industry rather than tripping over the individual self interests of turf protection that have caused this out-dated model."