Some reports speculated Kenneth R. Feinberg, an attorney who oversaw the Sept. 11 victims' fund, may lead the oversight board. (Charles Dharapak / Associated Press)
WASHINGTON -- Congress' Democratic leaders plan to establish a "car czar" with sweeping powers to oversee the U.S. automakers' restructuring efforts.
The president would appoint the car czar or have the czar head a board of officials with financial expertise to supervise both short-term lending to Detroit's struggling automakers as well as their long-term efforts to become viable businesses. The provision is part of legislation introduced Monday that would provide automakers with up to $15 billion in emergency loans.
Any transaction valued at more than $25 million made by an automaker taking federal loans would be subject to the car czar's approval.
The cash-strapped automakers expressed no objection to the appointment of a car czar, and some executives said the companies might benefit from having an administration official who could bring pressure to bear on creditors and other stakeholders as they restructure.
The government has set up oversight boards in the past, for Chrysler Corp., the nation's airlines and other sectors that received federal aid.
Congressional leaders warned the automakers that any loans would be accompanied by strict conditions.
"Congressmen have read the polls and know that the public doesn't particularly favor this bailout," said Larry Sabato, director of the University of Virginia's Center for Politics. "If the public is to accept it, it must be clear that the money is being well spent."
Under the terms of the bill, the car czar would have the power to disburse bridge loans to General Motors Corp., Ford Motor Co. and Chrysler LLC to keep them from collapsing.
By Jan. 1, the official or officials must establish criteria to assess the progress of each automaker and then evaluate their progress after 45 days and facilitate accords with unions, shareholders, dealers, suppliers and other creditors and parties affected by the restructuring plan.
During the negotiations, the car czar must report to Congress at least every 15 days.
The automakers would be required to submit restructuring plans by March 31 designed to attain long-term viability and international competitiveness.
If the car czar concludes that the progress of the negotiations is too slow to allow an agreement to be reached by March 31, the czar has the power to devise a plan for the company and submit it to Congress, the bill says.
GM, Chrysler and Ford all have submitted business plans to Congress as part of their loan requests, although Ford has said it does not need an immediate cash infusion.
GM turned in an exhaustive plan outlining cuts in staff, dealers and even brands. "We asked for an oversight board to help facilitate complex discussions with a variety of stakeholders," said GM spokesman Greg Martin.
When Chrysler was in danger of collapsing in 1979, the government arranged a bailout that entailed the creation of a high-level board, including the chairman of the Federal Reserve, the U.S. comptroller general and the secretaries of Treasury, Labor and Transportation.
Some of the powers of the car czar have not yet been worked out, congressional aides said.
The Washington Post reported Monday that the board would have seven members, including the heads of several departments and the Environmental Protection Agency.
Some media reports speculated that Kenneth Feinberg, an attorney who oversaw the Sept. 11 victims' compensation fund, was under consideration to lead the board.
"The person needs some understanding of the issues of the auto industry and the economics of what is happening globally," Sen. Debbie Stabenow, D-Lansing, said in an interview.
The government overseer "is much like a trustee overseeing a bankruptcy reorganization," she said.