I just read a piece on MSNBC that President Obama has decided not to go with a Car Czar and instead go with an across-the-government panel that Tim Geither and Larry Summers will head to oversee a restructuring of the auto industry.
Mr. President, I heartily recommend that you reconsider. The Federal Government is a party to the negotiations at GM and at Chrysler. The Government must actively participate in the negotiations not oversee them.
These negotiations have reportedly stalled in the past few days. While there are probably several reasons for the lack of progress, the absence of a representative of the Government at the negotiating table must be a major stumbling block. I am sure that if you ask representatives of GM, Chrysler, the UAW and the respective bondholder committees, they will tell you the government must be there negotiating on its behalf. None of the parties will go to their bottom line until the government shows up. It is just the way it works.
So, my recommendation is a follows: The panel that you have set up should operate as a board of directors overseeing its negotiating team. Its negotiating team should be involved in the day-to-day negotiations on the government's behalf at GM and Chrysler. The panel should hire a "lead person" to head their negotiating team, who will report to the board on the ongoing negotiations. That "lead person" should hire two small teams to support him/her in the negotiations, one for GM and one for Chrysler.
The management should use the advisors your team has previously hired, Cadwalader and Rothschild. This negotiating team needs to be hired immediately and start work now!
By the way, my next auto post will be on "Why the Government and the auto companies need to have a credible bankruptcy plan to effect the restructure of GM and Chrysler." Here is a hint, it will serve as a contingency plan and will serve to as a stick to garner the required concessions from the other parties-in-interest.
Cheers, Mike
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