Car Czar Ron Bloom: Feds Will Exit GM Stake ASAP

Posted by: David Kiley on July 27, 2009

The head of the White House task force on the auto industry Ron Bloom said Monday that the task force will not be micro-managing GM and Chrysler, especially when it comes to products, and that the Feds will sell their stakes in the companies as early as possible.

The boards won’t have to “check” before making decisions, said Bloom, who took over from Steven Rattner two weeks ago. Bloom was addressing a congressionally appointed panel in Detroit.

“The companies’ long-term viability and ability to repay the taxpayer dollars they were receiving would be seriously undermined if the government became involved in day-to-day business decisions,” Bloom said.

The White House in the last four months has ousted GM chairman/CEO G. Richard Wagoner Jr., loaned the automaker billions, facilitated a Chapter 11 bankruptcy reorganization and appointed a new board of directors.

As a result of the bankruptcy reorganizations of the companies with tax-payers help, GM and Chrysler emerged with less debt and fewer dealerships, with the Treasury owning 61 percent of the new GM and almost 10 percent of Chrysler.

GM CEO Fred “Fritz” Henderson, says he plans to pay off its government debt before a six-year deadline, and is aiming for an initial public offering by 2010.

Both automakers are going through dramatic makeovers, with GM, for example, shedding Saturn, Saab, Pontiac and Hummer brands, while it focuses on making Chevrolet, Cadillac, GMC and Buick compete more efficiently and effectively against Ford and Toyota.

GM exited bankruptcy July 10, when the former GM sold most assets to the new GM. Chrysler Group was formed with the sale of a majority of its predecessor’s assets June 10 to a group led by Italy’s Fiat.

President Obama has said that he does not plan to approve the lending of any more money to either company.

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