U.S. congressional Democrats have been drafting legislation for tight government control of the crippled U.S. auto industry, including the possible creation of an oversight board made up of five cabinet secretaries and the head of the Environmental Protection Agency and led by an independent chairman or “car czar.”
While the form of oversight was still being negotiated by congressional Democrats and the White House, the talks Sunday made clear the extent to which the auto companies would have to submit to substantial government supervision to receive a taxpayer-financed bailout.
Whatever oversight entity is created, it would direct the drastic reorganization plans that the auto companies have said they were willing to undertake in exchange for billions of dollars in short-term government loans to keep them in business, according to a senior congressional aide. A main factor complicating the deliberations was the imminent transition between the Bush and Obama administrations.
The discussions of how strong a hand the government should take with the auto industry came as congressional and White House negotiators sought to make the final touches on a $15 billion U.S. bridge loan to keep Chrysler, General Motors and Ford afloat. The legislation would also impose stringent taxpayer protections, including stock warrants giving the government an equity stake in the three firms, Chrysler, General Motors and Ford; new limits on executive pay; and a ban on stock dividends while the loans are outstanding.
Oversight will be needed but a ‘car czar’? We have had a ‘drug czar’;, a ‘terror czar’, and an ‘interl czar’…..and how have all those ‘czars’ worked out? War on Drugs is unwinable, the War on terror is not going as promised, but with some minor success and the ‘Intel’ czar has not brought all intel under one all encompassing leader….so just how effective will a ‘car czar’ be? Oversight yes, but there has got to be a better way to accomplish that without some ‘czar’ wasting the taxpayers money and accomplishing very little.
I think it would be a bad idea. Granted the current leadership is incompetent, the federal government is not going to do a better job. I say that instead of a czar, the government should just require new leadership as a condition of accepting bailout funds.
Morning Terrant and welcome back….hope you cold is better. The bill for the auto deal sounds little a bankruptcy restructuring deal to me….but I guess that is why we have lawyers.