Who Will Be the Car Czar?
Under the bailout plan currently making its way through Congress, one person will have ultimate authority to reshape the U.S. auto industry. One individual, appointed by the President, would have the power to oversee the automakers’ recovery plans, dispense money, stop payments and demand immediate repayment. In bailout bill discussions, the position has been called “Financial Viability Advisor.” The bill itself doesn’t name the position. The press calls it “car czar.” And the question on every mind in the auto industry is: who will it be?
One name emerging in recent days is retired Chrysler chairman Lee Iacocca. The former CEO issued a statement yesterday defending the current heads of the Big Three after a long silence on auto industry issues, leading automotive blog Jalopnik to ask “Is Lee Iacocca lobbying for the position of car czar?”
Autoblog notes that “Several congressional officials have mentioned September 11 fund master Kenneth Feinberg as a candidate to keep the automakers in line. Feinberg, who is also an accomplished lawyer, oversaw over $500 million in donations following the September 11 terrorist attacks in 2001. A key element of being ‘Car Czar’ would be wielding the authority to take all the funding back if he determines it’s been used improperly.”
House Speaker Nancy Pelosi (D-Calif.) “suggested former Federal Reserve Chairman Paul Volcker as someone qualified to become a federal czar to oversee a financial bailout for automakers” in comments to reporters yesterday, according to Bloomberg. President-Elect Barack Obama has already named Volker to head the President’s Economic Recovery Board.
The Detroit News says that a financial mind like Feinberg or Volker is a more likely answer than an auto industry insider like Iacocca. The News explains, “The so-called ‘car czar’ should have the disposition, good judgment and negotiating skills of a banker to extract transformational cuts from automakers and enforce conditions that will ensure the companies become profitable and repay up to $15 billion in taxpayer-funded aid, experts said.” Other worry, however, that “bankers make safe bets that, in this case, might protect taxpayers’ investment, but could fail to transform an ailing industry.”
Whoever the czar might ultimately be, USA Today says “What’s needed is an accomplished executive willing to deliver the unequivocal message to the automakers, their workers, dealers, creditors and stockholders that they will have to make major sacrifices now or face bankruptcy next spring.”
And whoever President Bush appoints to fill the position may just be a caretaker who holds the spot for Obama’s eventual choice. The idea for the czar position first emerged from Obama’s transition team before the current bailout bill was even proposed. At that time, Obama was said to have already settled on relatively obscure Georgetown University law professor Daniel Tarullo for the job.
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