Obama Scraps Car Czar Position
ALEX COHEN, host:
From the studios of NPR West, this is Day to Day. I'm Alex Cohen. Scrapping the car czar. President Obama has chosen not to appoint one person to oversee the restructuring of the troubled auto industry. For more on why the president is switching gears we're joined now by Justin Hyde of the Detroit Free Press. And Justin, why did President Obama decide to get rid of this car czar position?
Mr. JUSTIN HYDE (Reporter, Detroit Free Press): Well, it's becoming clear that the auto industry is probably going to have too many problems for just one person to handle. GM and Chrysler are going to be submitting plans to the administration tomorrow to explain how they deserve the 17.4 billion that the government has lent them and whether they might be able to receive even more aid in the future.
The Obama administration has several very tough questions to answer about the future of this industry and hundreds of thousands of jobs that are tied into it. It's just going to take more work than one person can give.
COHEN: So in lieu of a car czar, there will be this Presidential Task Force on Autos. Who will be heading up that group?
Mr. HYDE: It will be headed by Treasury Secretary Timothy Geitner and National Economic Council Director Lawrence Summers, the two top economic people in the Obama administration. It'll also pool staffers from several different departments throughout the government, including Transportation, Labor, and the EPA.
COHEN: You mentioned Tim Geithner, Larry Summers. Both gentlemen already have quite a bit on their plates. Isn't there some concern about taking on the auto industry in addition to everything else?
Mr. HYDE: There may be some concern, but I don't know if they have any choice. Just Friday, the supplier industry came to Treasury and put forth a proposal where it would receive up to $25 billion in aid. It did so because it was warning that given the production cuts the automakers have been forced to make this year, there may be a wave of bankruptcies in the supplier industry. They may need aid before the end of February.
Chrysler has said that it might need an additional 3 billion before the end of March, or it faces collapse. The problems in the automotive economy are so severe that there's going to have to be some quick decisions made by this administration.
COHEN: Justin, how are the carmakers and the unions reacting to this choice to scrap the car czar idea?
Mr. HYDE: Well, I think that they welcome any help that they can get at this point. The automakers, the unions, and the bond holders have all been locked in some very tense negotiations over the past few weeks in the lead up to these submissions on Tuesday. There's a lot of back and forth about how much sacrifice all the sides are going to have to make in order to make these companies viable. The sooner that they can start getting some feedback from the administration the better off that process would be.
COHEN: Treasury will decide whether the auto industry deserves this $17.4 billion in bailout funds, whether or not that loan should be called in or extended. What will happen between now and then?
Mr. HYDE: Two things have to happen. First, the Treasury and the Obama administration have to make some key decisions about what a viable automaker looks like and whether GM or Chrysler fit that profile. There's a lot of debate about in a market of 10 million vehicles a year in the United States whether there's enough room for both of these companies to survive. On the other side, the automakers have to show that they're making progress on their plans.
We know that they're probably going to announce some deep job cuts and plant closures tomorrow. They have to make some more progress with bond holders, with suppliers, and dealers. There's a lot of moving pieces that keep going in through March 31st. And by that time, it's possible we'll have to see some very key decisions made.
COHEN: Justine Hyde covers the auto industry for the Detroit Free Press. Thank you, Justin.
Mr. HYDE: Thank you, Alex.
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