Obama Auto Panel Meets at White House

WASHINGTON DC March 7, 2009;

The AP reported that the White House said Friday it was trying to determine “how to be the best partner” for the struggling U.S. auto industry as its auto task force met Friday to review the status of General Motors Corp and Chrysler LLC.

Cabinet-level members of the panel, led by Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers, were at the White House to review restructuring plans from GM and Chrysler, which are surviving on $17.4 billion in loans.

The government could recall its loans if GM and Chrysler fail to sign deals for debt restructuring and other concessions from stakeholders by March 31. GM and Chrysler are seeking $21.6 billion in additional financing to execute turnaround plans submitted last month.

Robert Gibbs, the White House press secretary, said before the meeting the “team is looking through those plans and figuring out how to be the best partner in what’s next for the auto industry.”

For the past two weeks, the panel has been gathering information from executives with GM, Chrysler and Ford Motor Co., auto suppliers, bondholders, lawmakers and labor officials. Members of the panel were expected to brief Cabinet members on the discussions.

Earlier Friday, the National Automobile Dealers Association pressed the panel to seek an increase in the availability of floor plan credit, the money dealers borrow to pay for their inventory of vehicles.

Dealers said the plight of GM and Chrysler was only one part of the harsh economic conditions punishing the industry.

“Everything builds on each other,” said John McEleney, a Clinton, Iowa, auto dealer who serves as NADA chairman. “Without that floor plan piece, if the dealers can’t order the vehicles, nothing else happens.”

Members of the panel are scheduled to meet with GM and Chrysler executives Monday in the Detroit area and tour their facilities. They are expected to tour GM’s technical center in suburban Warren, Michigan and Chrysler’s new product operations in Auburn Hills, Michigan, where the automakers are developing rechargeable electric vehicles.

On Thursday, General Motors said in its annual report that auditors raised serious doubt about the Detroit automaker’s ability to continue operating. GM has received $13.4 billion in federal loans and is seeking an additional $16.6 billion from the government.

Asked at the White House whether the company could be headed for bankruptcy, Gibbs said the administration was seeking “a strengthened, retooled and restructured and re-imagined auto industry in this country.”

Gibbs noted that the financing unit of Toyota Motor Corp, which supplanted GM as the world’s No. 1 automaker in global vehicle sales, is in talks with the Japan Bank for International Cooperation, a Japanese government-backed bank, on a possible loan.

Jim Lentz, Toyota’s top U.S. executive, is scheduled to meet with members of the Obama task force Wednesday. The Japanese automaker said it was a “meeting to exchange views” and the company would not be asking for financial help.