Two Michigan Representatives said in separate interviews yesterday that President Obama’s automotive task force may be ready to present frameworks for plans to restructure Chrysler and GM by as early as next week.
Democrat Sander Levin and Republican Candice Miller said lawmakers were told after a meeting with the task force on Tuesday that the panel could have a report ready by next week. The report will not be a detailed plan, but will instead outline the basic recommendations of the task force.
“It won’t be the final step, but something significant,” Levin said. He also said that the panel expects GM bondholders to “step up to the plate” before the end of March to help the automaker in its plan to reduce its $27 billion in debt. GM’s bondholders have so far been resistant to making concessions.
According to Miller, Chrysler and GM may not be getting the same treatment.
“They said they are two different companies and have different sets of circumstances, so they would have a different set of recommendations,” she said of the task force members’ decisions.
This could mean that one of the companies might be allowed to go into a “pre-packed bankruptcy” – likely Chrysler, which is much smaller than GM and seen as being less viable because of its product lineup. However, if the administration allows even one of the automakers to fail, the $5 billion loan program for suppliers may have been in vain, as the supplier chain would likely collapse if one of the Detroit automakers filed for bankruptcy.
The task force was originally required to make a decision about the two automakers by March 31, but advisors to the team have said that while the members of the panel are working diligently to come up with a plan, they will not be held to artificial timelines.
Source: Automotive News