Although they're united in support of U.S. automakers, several Michigan members of Congress are divided in their response to President Barack Obama's announcement Monday that General Motors and Chrysler need to do more to restructure their operations.
Rep. Thaddeus McCotter, R-Mich., told RTTNews that the administration forcing out GM CEO Rick Wagoner was patently unfair considering its treatment of financial company executives who have received far more in financial assistance than the auto industry.
The financial institution CEOs who put us on the precipice of a global depression were feted at the White House, pledged money and cooperation by the Obama administration, he said. It's injurious that Mr. Wagoner was forced out if you're going to give GM 60 days to comply with a deadline or face bankruptcy.
However McCotter was more frustrated by the administration's statement that the GM and Chrysler restructuring plans didn't go far enough without providing concrete goals to guide the companies in what they need to do.
What we need to know in Detroit is, if you have a viability plan in your mind, the administration's mind, and they're talking already about a structured bankruptcy if that's not met, you should tell us how many jobs are going to have to be lost until you consider the industry viable, he said. And [tell us] how deep the retirees cuts are going be until you consider the industry viable. Otherwise how do we meet those targets?
He added, The plans that were submitted earlier this year, they didn't like them. Not enough. Well tell us what enough is.
McCotter added that it was frustrating that the administration raised the prospect of a structured bankruptcy or using some elements of the bankruptcy code to facilitate the restructuring of the companies without providing details of what that meant or how it would work.
However Rep. Sander Levin, D-Mich., told RTTNews that he was confident that GM and Chrysler could restructure without going into any form of bankruptcy.
There should be a further restructuring without bankruptcy, he said. Bankruptcy is a perilous proposition. It's a two-edged sword. It would wipe out the claims of the creditors, but it could also have some very negative implications for the auto industry.
He added, I strongly believe that the restructuring should go on outside of bankruptcy.
Levin said that he believes that Obama's mentioning of bankruptcy, which Levin referred to as a backup option, was a tactic to pressure GM and Chrysler bond holders into more realistic negotiations.
He didn't rule it out, but he didn't rule it in, Levin said. I hope it helps deliver a message to the bondholders because they've been laying back and they've got to come to the table.
He added, The bondholders have been a major problem. And they need to come forth in order for there to be major further progress. If they're not actively at the table then the other parties will not participate effectively.
Asked about Wagoner's departure, Levin would only say that the focus now needs to be on how to move forward, in 60 days for GM and 30 days for Chrysler.
No one expected the plans from March 31st to be the final plan, he said. Clearly more has to be done. I think bondholders coming to the table is a very critical next step.
He added, Bankruptcy would wipe them out so they ought to act now.
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