Government's Role In GM Examined
ROBERT SIEGEL, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MELISSA BLOCK, host:
And I'm Melissa Block.
Executives for General Motors and Chrysler went before Congress today to defend their decisions to shut down thousands of dealerships. Some have suggested maybe the government should order a reversal of those decisions, especially in the case of General Motors. After all, the government is now the majority shareholder - it owns 60 percent of the company. But President Obama has insisted the government won't tell GM how to run its business.
Today, I talked with Austan Goolsbee, a member of the president's Task Force on the Auto Industry, to ask him just how involved the government will get.
Mr. AUSTAN GOOLSBEE (Presidential Task Force on the Auto Industry): Obviously, it's a messy situation that nobody ever wanted to be in. The president's been pretty clear the government is not going to be bossing them around and telling them what plants to open, or what models to make or anything like that. He wants them to set themselves up for viability and get out on their own two feet.
BLOCK: Well, what would the guiding principles be, would you say, for when the government won't and will intervene? What would the broad arc of that be?
Mr. GOOLSBEE: I mean, the overwhelming arc is the government is not intervening in the day-to-day business management of these companies. So, as he said, it's only for the very highest level business decisions. Most of the specific kinds of decisions about restructuring and what the companies needed to do to change direction, that was sorted out before the government took over.
They insisted on those conditions being met before they put the money in. But after that, the government is not in the business of trying to order them around on how to run their private businesses. It's trying to get them on their feet and to get out of this as quickly as possible.
BLOCK: Well, here's one area where those two interests might collide, for example. The government has told carmakers to build smaller, more fuel-efficient cars. But General Motors, of which the government is now a majority owner, makes its biggest profits on exactly the opposite: big cars and trucks. How do you bring those two principles into alignment?
Mr. GOOLSBEE: The president made clear on that specific issue in his remarks: the government is not going to be in the business of telling them what models they should be making, what plants they should be opening, or anything of the sort. CAFE standards are changing. You saw that in the past couple of weeks, they've reached agreement on that.
It is going to be up to the management of these, of General Motors and of Fiat with Chrysler. They're in different situations. But this is a circumstance in which they've made major sacrifices and changes to get themselves on a path to viability. And that's the main direction that the government wants them to go in. The government is not in the business of micro managing their operations. It's trying to get out of this situation as quickly as possible.
BLOCK: What are the parameters for when the government would decide it's time to get out of General Motors, we're going to sell our shares? How do you decide that?
Mr. GOOLSBEE: I think the general principle is as soon as they are a viable enterprise and can get financing from the private sector and are operating, the government wants to get out as quickly as possible.
BLOCK: And does that mean even if the $50 billion of taxpayer money has not been recouped?
Mr. GOOLSBEE: Well, as I say, well, they haven't specified any exact conditions. The point of recouping the money, the government is in an equity position because, as the president said, it was hard to see how this will be a viable enterprise just saddling them with more debt.
I believe that them becoming a viable enterprise is the only way that the government is going to get anything like its investment out of the companies. It's certainly not going to be a situation where they're viable but they haven't recovered the full amount of the money, why don't we just keep staying in a majority shareholder position for year upon year upon year hoping to get our money. Now, that strikes me as the opposite of the way that we're aiming.
BLOCK: Austan Goolsbee, thanks very much.
Mr. GOOLSBEE: Nice talking to you again, Melissa.
BLOCK: Austan Goolsbee is a member of the president's Task Force on the Auto Industry.
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