'Car Czar,' Other Oversight in Auto Bailout Plan
In an attempt to police the country's bailed-out automobile industry, congressional leaders are creating a government "car czar" position to monitor the $15 billion assistance program -- a move that essentially creates a watchdog to see how the money is doled out.
Sen. Carl Levin (D-Mich), a leading supporter of the industry bailout, told Fox News that the administrator would "make sure that the promises that are made in these plans are kept, that the conditions of the money are met, that there'll be real oversight going on, that there'll be a leaner and a greener industry that comes out of this," mirroring comments made by the companies' chief executives on Capitol Hill last week.
The industry czar, who would be named by President George W. Bush before he leaves office next month, would oversee the restructuring of Detroit's Big Three automakers. The czar also would have veto power over company plans, the ability to cut off the loans and to force the companies into bankruptcy.
In an editorial, The Detroit Free-Press said Bush should appoint "an overseer with what U.S. Rep. Barney Frank, D-Mass., calls 'a great deal of head-knocking ability,' much as a bankruptcy judge could exercise."
Other experts seemed to agree, noting that the car czar position, as it is currently drafted, does not have that kind of muscle, Jay Westbrook, a bankruptcy expert at the University of Texas at Austin, told National Public Radio's "All Things Considered."
Several names have already been tossed around as potential czar picks, including former Rep. David Bonior (D-Mich.), who managed the presidential campaign of ex-Sen. John Edwards; former General Electric CEO Jack Welch; former Fed Chairman Paul Volcker, a top economics adviser to president-elect Barack Obama; retired Chrysler chairman Lee Iacocca; Sept. 11 fund organizer Kenneth Feinberg; and financial adviser Jerome "Jerry" York.
Iacocca, for one, has argued for an auto-sector bailout and is pushing for less "regulatory interference" on the part of government. Former Gov. James Blanchard (D-Mich.) also told McClatchy that the original Chrysler bailout in 1979 worked, in part, because there wasn't too much hand-holding by government regulators.
The "Auto Industry Financing and Restructuring Act" also contains provisions prohibiting "golden parachute"-type bonuses for outgoing executives, and bonuses for the top 25 employees of each firm and requiring the symbolic selling of the companies' corporate jets.
By Derek Kravitz |
December 10, 2008; 2:02 PM ET
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Posted by: NPxyz | December 10, 2008 5:40 PM