Washington Wants A "Car Czar", Russia Has None to Spare
Czar Nicholas II is not available due to his untimely demise, so Congress and the administration will have to find someone else to act as the “car czar”, the role of making sure that The Big Three do not make any mistakes while spending their bailout money.
Some kind of deal is in the works to get Detroit $15 billiont to $17 billion this year. That should keep GM (GM) and Chrysler from having to go into bankruptcy.
According to The Wall Street Journal, “The advisor would be authorized to approve short-term financing for the industry, drawn from an existing loan program meant to help the Big Three retool to meet higher fuel economy standards, according to a draft of the administration plan.” While that idea may fly with some people in the administration, it is unclear whether it would help garner enough votes in Congress to start writing the auto companies their checks.
It is hard to say what a “car czar” would do because The Big Three have not been terribly specific about how to dig themselves out of from under their huge burdens of union obligations, debt, and falling sales. The idea of having an administrator to keep track of the industry’s restructuring may be not be practical when no detailed program has been drawn up as the plan for managing a bailout.
GM and Chrysler have done a good job of convincing Washington that they may not see next year, but have done a poor job of demonstrating what they would do with the capital beyond bringing down their trade payables.
Beyond that, it is an excellent idea.
Douglas A. McIntyre