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 Conflicting Pressures Of A New Car Company In A New Auto World - White House Press Briefing by Robert Gibbs 6/2/09 — Tuesday, June 02, 2009 —  MR. GIBBS: Mara. Q I want to try to ask a better question about the inherent conflicts of owning 6 percent of GM than I did yesterday. (Laughter.) MR. GIBBS: Take two. (Laughter.) Q If it turns out that GM could make more profits for the taxpayer investors that you represent by outsourcing some of its production to China, even at the cost of maybe losing some U.S. jobs, is that something that you as the 60 percent owner would push them to do? MR. GIBBS: Well, again, I think we're -- there are core governance issues that, again, as I talked about yesterday, that the government will take part in as a holder of almost 60 percent or 60 percent of common equity. I think the major thrust will be basically being involved in a majority of a new board of -- a newly constituted board of directors. But, look, business decisions are going to be made by General Motors. I don't want to get involved in making those business decisions for them. Q So if they did out-source that would be a decision for them -- MR. GIBBS: Yes. Q I mean, there are public policy goals that the government has and then there's the goal of making the highest return for the taxpayers as you can. MR. GIBBS: And understand this -- I spent a little time thinking about this yesterday. About half the questions yesterday were, you know, good golly, you can't possibly do that. And the other half of the questions were, good golly, why aren't you doing that. Q Well, that's the whole point -- (inaudible) conflicting pressures, yes. MR. GIBBS: And the goal of the restructuring plan is to get a company that -- and again, I think when we got a look at some of the details yesterday of the filings, we've got a company that was -- these are rough, remembering these figures -- I think $85 billion in assets and $172 billion in debt. One gets a pretty good grasp on why a company is where it is based on those numbers. Obviously now this is a company that we hope in a short period of time -- 60 to 90 days -- that emerges restructured, competitive, and without the massive debt that it previously had. And that they'll be free to make a series of decisions as a new car company in a new auto world. And I think our goal and I think their goal, too, as a business is to produce profit for its shareholders. And I can assure you the President's goal is to get out of the equity business in auto companies as quickly as possible. Q So all of these topics are for them to wrestle with and resolve, not for you. MR. GIBBS: Yes. Yes, sir. Automobile Industry | General Motors | Obama Administration | Press Briefing | Robert Gibbs | White House Press Corps Labels: Automobile Industry, General Motors, Obama Administration, Press Briefing, Robert Gibbs, White House Press Corps >> Full Story
Posted by White House Press Corps @ 6:43:00 PM  Quagmire! - White House Press Briefing by Robert Gibbs 6/1/09  Q Thank you, Robert. Leader Boehner said the administration has got to release an exit strategy for General Motors. Does the President have an exit strategy? And I know he described these principles that he's going to follow during restructuring, but is there a timeline for Washington to get out of Detroit for good?MR. GIBBS: Well, Phil, as you know, the President has made a series of difficult decisions that lead us to the point where we are now. And as he has said on many occasions, he doesn't desire to hold a significant share of, or run on a day-to-day basis, an auto company. But he does believe that the investment that we're making -- structured in what is in the best interests of taxpayers, and it -- we'll get out of this equity as quickly as possible in order to protect the investment that taxpayers have made. I don't know that there's a specific timeline. But, Phil, let me broaden a little bit, because -- and I did this a little on Friday, but you basically have several different pathways here. On one side you have a bankruptcy that largely would have resulted in a liquidation -- probably 60,000, 70,000 direct jobs lost, not including suppliers or things like that -- obviously would have had a dramatic economic devastation in the Midwest region and throughout the country. I think another side of this was simply to continue pouring money into a company that you knew wasn't acting in any viable way. The President decided on a different path that I think made some real concessions in restructuring the company. You'll have a company after about a 60- or 90-day bankruptcy that will emerge without a balance sheet loaded down with debt; a restructured company that the task force and the President believe can be profitable in a scenario that sells far fewer cars than what it would take to break even at this point. So the President is certainly anxious to get out of this business, but at the same time he made a series of tough decisions to stave off something that I think would have been far more economically devastating. Q But there is no exit strategy? MR. GIBBS: Well, no, no, no -- I don't -- Q Do you want to -- MR. GIBBS: Well, maybe I should -- I can start all over again. There is an exit strategy -- it's to get this company viable; it's to get the economy strengthened so that GM is producing cars that people want to buy; that Americans have the income to buy those cars; to do so in a restructured way that allows them to be profitable more quickly; and then in order to protect the investment that taxpayers have made, we get out of any involvement in the company -- that's the exit plan. Yes, ma'am. Q Robert, I wanted to zero in on the President's pledge to be hands-off when it comes to the day-to-day management of the company. And you said the same thing from the podium, but a lot of people are very skeptical that Washington will really be able to resist the temptation to be hands-off. There's a lot of decisions that will come up that are politically sensitive, on Capitol Hill and elsewhere, such as which plants are going to close -- those types of things. MR. GIBBS: Well, a lot of those decisions are being made right now. Those decisions are being made by the companies. The dealership structure -- those are decisions that are being made by the companies. Q But down the road there may be other decisions that have to be made -- dealerships and plants and things like that -- MR. GIBBS: Let me interrupt you for a second. I don't think many people ever thought that we could get to this point of restructuring, in all honesty. I think if you take a look at what was set up by some in Congress in November and December when the very first discussions were going on about bridge loans to cover the operating costs for fixed period of time while GM made some restructuring -- I think if you look at some of the standards that were laid out, the Auto Task Force has far exceeded what anybody thought was possible in restructuring. This is a company that will emerge from bankruptcy in 60 to 90 days with no debt, whereas people were saying, well, it would be nice to have -- if we could get to some place that reduced the debt by maybe half. You've got a company that has, I think, a real chance to emerge viable based on some of the tough decisions that have been required. And I think a lot of those decisions have been made without politics in mind. Q But if lawmakers decide they do want to interfere with decisions such as the mix of vehicles and things like that, you can't prevent them from passing a law. What are the safeguards? MR. GIBBS: I think you're now into a little bit of a different question. What if Congress acts to -- Q No, the question is about interference and meddling the day-to-day operations. MR. GIBBS: But let me make sure that I understand your question. Are you talking about if Congress does that or -- Q If Congress does that, as well as if Congress asks you to do it. MR. GIBBS: Well, look, I think it would be unhelpful to get into a hypothetical on what we would do based on a bill that Congress might pass asking us to do something. I think that's a few too many leaps for me to go into. I can simply say that we will work on core governance issues. I think one of the ways to get to a viable company as quickly as possible is working on a board of directors, and a serious and stable management structure that moves this company quickly through bankruptcy and quickly to viability. I think those are the type of core issues that are important as we protect the investment of taxpayers while at the same time, as the President has said, as the task force has said, and lastly as I have said, not involved in the meddling decisions on a day-to-day basis. That's never been and isn't our desire. Q Just to probe a little further on the White House, on the administration's -- how much you're going to be involved in the day-to-day operations of the company -- if General Motors wants to manufacture a car that your Auto Task Force -- whether it's Rattner, Deese, or whoever -- thinks is not going to be a car that's going to sell very well, are you going to stop General Motors from manufacturing that car? MR. GIBBS: Jake, we don't make those determinations. Those aren't -- Brian Deese isn't picking out Chevy Malibu's colors for next year. Q I'm not talking about the color for next year. You said that the point is -- that the exit strategy to make the company about viable for the GM is making cars that people want to buy. So are you going to be involved in -- MR. GIBBS: No, we will be involved in corporate governance decisions such as setting up a board of directors that is going to make those business decisions based on how to get the company the profitability. That's what each company -- that's what the board of directors and the CEOs and the managers and the workers of every company we want to be involved in is a viable, strong, profitable company. Look, now, I don't want to confuse this, so obviously Congress and the executive branch are involved in -- have always been involved in some decisions. And again, I'm not -- I don't want to co-mingle these issues, but I am separating to some degree -- two years ago, Congress set fuel mileage standards that go through model 2016, okay. Those have been established. I've seen reports that said, well, you know, we may -- the Auto Task Force may decide that it's time to build these tiny little cars that go 40 miles an hour, blah, blah, blah. Congress has always exercised its purview to set, for instance, corporate average fuel economy standards. That's, I know, not what you're talking about, but I am sort of separating some of those issues so that we're not in the midst of confusing them. Q Right. I guess my point is, Fritz Henderson said today that the standard is going to be that they're going to try to build, for their new lines of cars and trucks, ones that are outstanding that people want to buy -- which came as a surprise to me that this was some new idea for an auto manufacturer, the idea that they would try to come up with something that consumers actually would like to purchase. What reason do you have for confidence that United Automakers, the people who have been running these companies, are going to be able to come up with something that Americans are going to want to buy, and therefore, this $30 billion to $50 billion investment is going to pay off? MR. GIBBS: Well, look, I think you have seen over the course of several years an auto industry that has seen, regardless of economic conditions, a fairly dramatic decrease in its auto sales, not the least of which is because some of -- you know, you've seen the reports -- Q Yes, and they kept on making Hummers and they kept on making junky cars that nobody wanted to buy. MR. GIBBS: Well, I think part of the restructuring ultimately is that the Auto Task Force forced some decisions that I think in many ways some of these companies had been putting off for years. The auto companies have dropped brands. We've all seen that -- whereas some people -- different companies are marketing only a few different models and using a fixed number of advertising dollars to push them, whereas some of the American auto companies have had 10 or 12 different models. You've seen different companies that have the same car -- literally the same car under different names and several different manufacturers, which hasn’t made a lot of sense. Obviously I think, again, one of the things that's been done is there is a fundamental -- Q You're proving my point. You're proving my point. It's not like Fritz Henderson just walked in from another company. I mean, what makes you think that this investment is going to pay off? Just because they've learned a lesson now? MR. GIBBS: I think in many ways their previous business model had been very locked in. I think you've all seen the reports today of the serious amount of debt that GM was carrying, right? When you're losing that kind of money, it's hard to undergo some fundamental restructuring without making some very fundamental decisions. I think it's pretty clear that the companies have, in many instances, decided that they've got to produce different cars; some of those are coming on in later model years. There are things like the Chevy Volt that I think people believe, based on the high price of gas, based on consciousness about our dependence on foreign oil, can create different markets. But I think that fundamentally what has happened is a company is free now to make fundamentally different decisions. Yes, sir. Q Robert, have you defined the criteria for the board of directors? MR. GIBBS: Not that I know of, but I can check on that. I don't know if there's been a strict delineation. Q But, I mean, sort of overriding principles for these people, because they will key. MR. GIBBS: Well, look, I think you want a group of people that have been very successful in the businesses that they've run; that have some experience in running companies and understand what it means to undergo fundamental restructuring; to operate in a whole different world. Again, if you look at -- I used this analogy last week -- you're going to have to make fundamental different decisions. Thirty years ago this was a company that employed probably 10 times the number of workers that it does right now. Obviously, there's a mind-set change that has to go on, and I think that's what they'll look for in a board of directors. Q Do you think they have to come from the auto industry, per se? MR. GIBBS: Well, no I don't. I don't think that's necessary, no. I think that having people that understand how to run a good business means running a good business regardless of what you're doing. Auto Task Force | Automobile Industry | Congress | General Motors | Press Briefing | Robert Gibbs | White House Press Corps Labels: Auto Task Force, Automobile Industry, Congress, General Motors, Press Briefing, Robert Gibbs, White House Press Corps >> Full Story
Posted by White House Press Corps @ 2:46:00 PM Under Enormous Pressure - White House Press Briefing by Robert Gibbs 5/28/09 — Thursday, May 28, 2009 —  Q Okay, great. Two quick policy things. We had a conversation yesterday about closing Chrysler dealerships. A gentleman named Leonard Bellavia, who has deposed Chrysler executives on behalf of some dealers, told Reuters, "It became clear to us that Chrysler does not see the wisdom of terminating 25 percent of its dealers. It really wasn't Chrysler's decision. They're under enormous pressure from the President's automotive task force."MR. GIBBS: Under enormous pressure? Q To close dealerships that Chrysler itself, according to this man who has deposed Chrysler senior executives on behalf of dealers -- MR. GIBBS: In the absence of seeing -- since we're talking about the law, I obviously haven't seen what affidavit he refers to. The President's task force on autos did not pick individual dealerships. It hasn't -- it isn't involved in picking what plants may or may not be closed. That's not the job of the President's auto task force. That's the job of the individual car company. They've got to figure out in their newly restructured world, based on the market, what their central supply chain is. And I think those are the decisions that they made. Q Related to that, there is some concern in the blogosphere that -- of the Chrysler dealerships being closed -- a disproportionate number appear to be dealerships in which the operators contributed to Republicans, and hardly any in which contributions to Democrats have been closed down. I'm not saying the White House knows anything about this. I'm just asking, would you be concerned about any taint of politics whatsoever in any of these decisions? MR. GIBBS: Look, again, Major, let me reiterate that we don't make those decisions, okay. Chrysler makes those decisions. So I'm sure you can send Chrysler the address of the blog that you refer to. I don't know whether that report is accurate, but I can simply say that since my first answer was we're not involved in making those decisions, I would think your question would be appropriately dealt with by the company that is. Automobile Industry | Obama Administration | Press Briefing | Robert Gibbs | White House Press Corps Labels: Automobile Industry, Obama Administration, Press Briefing, Robert Gibbs, White House Press Corps >> Full Story
Posted by White House Press Corps @ 8:57:00 PM General And Somewhat Nonspecific - White House Press Briefing by Robert Gibbs 3/30/09 — Monday, March 30, 2009 —  Q Thank you. I'd just like to follow up on some of the -- that has been out there here. You've been asked a couple times whether the actions regarding these auto companies should be viewed as something that the banks should pay attention to because a similar approach may come their way. And you said, no, we should look at these as individual cases. So are you essentially --MR. GIBBS: I guess what I'm trying to do is, I'm just trying to -- again, the example I just used with Chuck, I mean, the pathway for two auto companies is, based on the President's decision today, different. So I think to take any series of other entities and put them on that same scale, those paths may also be different. That's all I'm -- Q There's certain principles that underlie all of these decisions, though, obviously, and there is a certain willingness or unwillingness of the administration to dictate certain terms as a condition of receiving federal money. And so are you saying, by saying these are individual cases, are you trying to communicate that these banks really -- don't worry about this, this isn't coming your way? MR. GIBBS: No, I -- Q I think it's a fair question. MR. GIBBS: It is. It's a little general -- general and somewhat nonspecific. And again, what I'm -- I guess what I'm asking is, instead of looking at every entity as the same entity, I think that's -- I don't think that's hypothetically productive. Q Well, do you want me to ask the question that way by inserting all the names of all the banks that have received aid and ask if it would apply to that? I mean, would that be more helpful? MR. GIBBS: Well, again, understanding that some of the circumstances are different. Q But why Rick Wagoner and not Ken Lewis? MR. GIBBS: Again, some of these things are -- I don't have anything specific on Bank of America. But again, I just don't want to be generalistic across the board. Q So, in other words, you really don't want people reading anything more into this? MR. GIBBS: I hope people read into it exactly what I said rather than reading into it what they want to read into it. Q It's our job to help people -- to explain to people what it is that you're saying, and so I'm trying to make sure I understand it. MR. GIBBS: Okay. (Laughter.) Q It sounds like what you're saying is, no, you don't want us to interpret this as a sign of things to come for others -- MR. GIBBS: My hesitancy -- Q -- and if that's the case, why don't you just say -- MR. GIBBS: My hesitancy -- no, no, my hesitancy is just to look at every entity the same way, because, again, the circumstances by which any entity is at any certain point may well be different, even though it's the same type of entity, right? Again, I want to go back to GM and Chrysler. On the face, both are auto companies, right? Both have found themselves at a point where they're seeking additional government assistance, adding in to the additional loans that they got to put them on a path toward viability. But again, the examples by which we're using -- or that the President has made a determination about which direction they're going to go is different even though they're both auto industry. Q Of course, and I'm not suggesting the exact same remedy would apply to any one of these things, but, again, if you look at the general case, you have, say, generically, contracts that at AIG were unbreakable because they're legal contracts but for the UAW, those are contracts that you fully expect them to modify if they're going to get federal assistance. MR. GIBBS: Well, I think this -- I think many people have made -- I think many people have made sacrifices, but, again, without looking through the individual instances of other entities, it's hard to make that generalization. Automobile Industry | Banking | Economy | President Obama | Press Briefing | Robert Gibbs | Treasury Department | White House Press Corps Labels: Automobile Industry, Banking, Economy, President Obama, Press Briefing, Robert Gibbs, Treasury Department, White House Press Corps >> Full Story
Posted by White House Press Corps @ 9:32:00 PM Tranche Warfare - White House Press Briefing by Deputy Chief of Staff for Policy Joel Kaplan 12/19/08 — Friday, December 19, 2008 —  Q Can you give us a breakdown of who's getting what out of the first $13.4 billion? And is there a distinction of how much you're making available in, say, loan guarantees, which is something Ford was more interested in, versus outright cash out the door? MR. KAPLAN: Yes. The loans that are being announced today are for the GM auto manufacturer and Chrysler auto manufacturing company. Ford, in Treasury discussions with them, I believe does not believe that it needs a loan today. Out of the total -- I mentioned that the total is $17.4 billion -- $13.4 billion of that is going to be made available to these two companies in December and January, and $4 billion is needed in February by GM. So if I do my math correctly, I think that means that $13.4 billion also happens to be the number, coincidentally, that is going to GM, and $4 billion is the number that is going to Chrysler. Q And how do-- MR. KAPLAN: But it's a little confusing because these numbers just -- literally coincidentally happen to be the same, the total -- the total that -- Q So some of it will be in the $4 billion that is the post -- or second tranche amount? MR. KAPLAN: Right, the February tranche of $4 billion is for GM. So $13.4 billion is being divided by GM and Chrysler in December and January. Q Evenly, like -- MR. KAPLAN: No, not evenly. Q Okay. MR. KAPLAN: I believe that it is $4 billion for Chrysler and the remainder, which would be $9.4 billion in December and January for GM, with the remaining $4 billion in February for GM. I apologize, I know those -- it's a little confusing just because of the coincidence of the numbers. Q And how do you resolve the Cerberus issue, because they are a private company -- it calls for warrants, the loans. How does the administration -- or the loan terms deal with that? MR. KAPLAN: Yes, the specifics of how the Treasury intends to get warrants from Chrysler, which is privately held, I'm going to have to rely on Treasury to give the details on. But these loans are to the auto manufacturing companies of GM and Chrysler. Automobile Industry | Joel Kaplan | Legislation | Press Briefing | Treasury Department | White House Press Corps Labels: Automobile Industry, Joel Kaplan, Legislation, Press Briefing, Treasury Department, White House Press Corps >> Full Story
Posted by White House Press Corps @ 5:23:00 PM Automakers Bailout Up in the Air - Air Force One Press Gaggle by Dana Perino 12/12/08 — Friday, December 12, 2008 —  Q Will you start using TARP money now? Are you going to direct the Treasury --MS. PERINO: I didn't say that. I didn't say that. I said that given the current state of the U.S. economy, we'll consider other options if necessary, and I said including use of some of the TARP; that's one of the options. Q How soon -- walk us through his thought process right now. Who does he need to talk to first? What decisions need to be made before he decides -- MS. PERINO: He's in regular contact with all of his economic advisors. And so we'll be weighing all of the options and making decisions as soon as we need to. Q How soon does he feel he needs to make a decision? MS. PERINO: We didn't discuss that. I mean, obviously we have talked about he urgency of the situation. We have been pushing to get this done; we wanted to get it done last night. Both Congress and the -- the House and the Senate had bipartisan majorities supporting our approach, but they didn't get it over the goal line. And so we have to consider what other options we would take. But I don't have a time frame on it. Q Are you basically saying that you are going to make the decision -- it's not Congress now? I mean, basically, you are going to make the decision on what to do -- MS. PERINO: Congress spoke. Congress spoke last night. They don't have the votes to do anything, despite having majorities in both the House and the Senate supporting a reasonable approach that we put forward. We thought that the legislation could have even been improved. We thought that senators were making good progress last night and talking about the Corker amendment. But again, it just -- it didn't get the votes that it needed to pass the Senate. They needed 60; I think they had 53. Q You mentioned the use of -- you mentioned TARP funds as one option. Are there any other options? MS. PERINO: We're going to weigh all options. I mentioned TARP, as that's been something that you all have been asking about for weeks. And it's just one of the options that's out there, sure. Q Can you describe the other options? MS. PERINO: No. Q Is the Federal Reserve -- cash from the Federal Reserve an option? MS. PERINO: I don't know. Q Will the decision be made this week? I mean, it's Friday today. Or is next week -- MS. PERINO: I don't know. Air Force One | Automobile Industry | Congress | Dana Perino | Legislation | President Bush | Press Gaggle | TARP | White House Press Corps Labels: Air Force One, Automobile Industry, Congress, Dana Perino, Legislation, President Bush, Press Gaggle, TARP, White House Press Corps >> Full Story
Posted by White House Press Corps @ 9:45:00 PM Kicking the Can - White House Press Briefing by Dana Perino 12/11/08 — Thursday, December 11, 2008 —  Q Dana, one of the concerns of some Republicans is this doesn't solve the automakers' problem. Bob Corker says you're just kicking the can down the road. With $14 billion you really only get them into the Obama administration. Is that the solution to -- is this only a matter of holding off for a few months the ultimate collapse of one or more of the auto companies? MS. PERINO: Well, I don't think that the companies think that they have a few months. That's why we are trying to act now. I will let them speak for themselves, but I think they've been very open about the difficulties that they're having right now. And that is why they've come and asked for help. It's not an easy thing or a thing to do to come and ask the federal government for help. You have to put away your pride and say, we want these -- we want our companies to be able to be successful; here's what we're going to be willing to do. Now, the auto czar that we would put in place would have the opportunity to make them -- force them to make really tough concessions. But the other thing is, is that if we don't act and these companies go away, we could wake up and not have any domestic auto industry, which is certainly not the outcome that this President wants and I would think that most members on Capitol Hill don't want it either. But here's the thing, Wendell -- for those members who think that, I would ask them just to look at this legislation because there's really only one of two outcomes: either fundamental restructuring that will make them viable in the long term, or an orderly bankruptcy filing. And we're just asking for a little bit of help from money already appropriated to help the automakers in order for them to be able to either make their companies profitable or to go into an orderly bankruptcy. Those are the two outcomes that we're seeking. Q And the idea that you're kicking the can down the road? MS. PERINO: I don't see how that -- we're trying to pass legislation today. I don't understand how that's kicking the can down the road. Plus, we have also been working with the Obama administration, as you heard -- I'm sorry, Obama team, not quite administration yet -- but we've been working with them, making sure that they understood the actions that we are wanting to take. And I think that they've been at least generally supportive -- I won't speak for them -- but generally supportive of the measures we're taking, because they recognize the ramifications of not acting. Automobile Industry | Congress | Dana Perino | Legislation | Press Briefing | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Legislation, Press Briefing, White House Press Corps >> Full Story
Posted by White House Press Corps @ 10:52:00 PM Car Czar - White House Press Briefing by Deputy Chief of Staff for Policy Joel Kaplan 12/10/08 — Wednesday, December 10, 2008 —  MR. KAPLAN: Ann. Q What kind of person is the President going to look for as this designee? I mean, someone from outside of government; how skilled and knowledgeable within the auto industry; and someone who would serve past this administration? MR. KAPLAN: It's a good question, Ann. The legislation provides a great deal of flexibility on who could fill the post of President's designee. And that will be flexibility that this President will have the ability to exercise for the next 41 days, and flexibility the next administration will have. And that's something that we will want to be in continuing contact with the President-elect's team on to figure out what's the best way of doing that to achieve everybody's goal here in the legislation, which is to empower the person and make them successful, but recognizing that there will be a new President on January 20th, and a new team, and we want to make sure that however we proceed, it's consistent with the President-elect's view on how that can be most effective, because it will be under their administration that this decision will ultimately get made. Q It sounds like you want -- that he is thinking of somebody, because of the time frame, who would not be serving just for a few days and then someone else coming in. Would it be the President's intention to try to find someone who would remain, who would be acceptable to the new administration? MR. KAPLAN: I'll just reiterate, we'll -- we expect to work closely with the President-elect's team in figuring out, once this legislation is passed, what the most effective means possible is of implementing this legislation, recognizing that we've got a transition. Q Would the designee work for the White House or be in one of the Cabinet departments? MR. KAPLAN: As I said, the legislation provides a great deal of flexibility, and right now we're focused on getting that legislation enacted so that we have that flexibility. When we're prepared to exercise it, we will let you know how the President intends to exercise it. [...] Q And what does the President think of Paul Volcker for this car czar? Q I was going to ask the same thing. MR. KAPLAN: Really? Well, that's funny because I was going to dodge it when she asked it. (Laughter.) Look, we're -- as I said to Ann, we're focused on getting the legislation passed. Obviously Paul Volcker is a person of tremendous stature and gravitas. But I have no reason to believe that there's been any decisions about who the person would be, if it would be a person from the outside. We're going to -- we're just going to reserve all flexibility on that until we actually get the legislation, until we have a chance to consult with the members of Congress and with the President-elect's team. Q A quick follow on that, Joel. How quickly after the legislation passes would you be looking to name the car czar? MR. KAPLAN: Quickly. Obviously -- Q Days? MR. KAPLAN: We would look to move as quickly as we could. We will obviously want to consult with members of Congress and with the President-elect's team. I can't tell you exactly how quickly that will be. Besides this briefing, I'm mostly focused on working with the Congress on the legislation itself so that we're in a position to have that -- to have the luxury of moving quickly on the person. [...] Q With the President's designee getting so strong authority on the plans, et cetera, how much does this run counter to what the President has said for years, that it is not the role of the government to run private companies? MR. KAPLAN: Yes, it's not the intention in this bill of this President's designee to run the private companies; it's the purpose to empower somebody to sit down with the private companies and all of their stakeholders, who so far have not, apparently, been capable of making agreements that would render them a viable entity going forward, which is why they've come to the government and to the Congress looking for assistance. So this is not somebody who is going to run the companies; it is somebody who is going to be empowered to, like I said before, bring them around the table, knock heads, and tell them, if you want assistance from the taxpayer going forward you're going to have to make some difficult concessions. Now, what are those concessions you're prepared to make, and show me how that adds up to a plan for financial viability. It's not something you would want to do in normal times, and it's not something you would normally do with another company or industry. We're in very challenging economic times. It is our view that to have a uncontrolled bankruptcy in the next couple of weeks in these firms could have very significant and damaging consequences for the economy. So we think there is a rationale for providing them temporary bridge financing, as I started the briefing with, if you can have some reassurance, some very substantial reassurance that the taxpayers' investment in these companies is going to be protected. And that's why you have an empowered President's designee to ensure that that investment is protected. And that's what I've tried to describe. Automobile Industry | Car Czar | Joel Kaplan | Legislation | Press Briefing | White House Press Corps Labels: Automobile Industry, Car Czar, Joel Kaplan, Legislation, Press Briefing, White House Press Corps >> Full Story
Posted by White House Press Corps @ 6:13:00 PM Ave, Caesar, morituri te salutant! - White House Press Briefing by Dana Perino 12/8/08 — Monday, December 08, 2008 —  Q What about this idea of an oversight board? Is the White House okay with that? MS. PERINO: One of our ideas was a financial viability advisor. They gave me an acronym of FVA, if you want to add one to your list. (Laughter.) This is a person who would be named by the President with the authority to negotiate a credible viability plan with automakers seeking assistance. So, for example, if an automaker comes to the government seeking assistance, we will make short-term financing available, providing that the automakers and the stakeholders, like the UAW, agree to negotiate with the advisor in good faith and on a credible plan for long-term viability. Near the end of that short-term period, the FVA will report on whether the automaker is executing a credible plan for long-term viability. And if he or she determines that they are indeed -- and progress is being made in negotiations, then additional assistance could be made available at that time. If the talks, however, are not headed in that direction and if that fails, then the FVA will submit an alternative viability plan that would involve restructuring through Chapter 11, and require automakers to repay the government the amount of their short-term bridge financing. Long-term financing in this case would only be made available subject to the approval of this new advisor. Q So -- and that's different from what they're talking about is an oversight board? MS. PERINO: Not necessarily. Again, we don't know what the legislative language is going to show. I think that the key is advisor, more than one, but an entity that would serve as a viability validator. Q But what you're talking about are conditions for oversight to work, not necessarily if it's this particular person or board or whatever. MS. PERINO: Right. Our idea was one person that would serve as an advisor, somebody appointed by the President. Of course when you're working on a negotiation, you talk to them about their ideas, as well; we'll see what they come back with. But our concern right now is on the process, because we haven't seen the legislation, so we can't give you any more details. Automobile Industry | Congress | Dana Perino | Legislation | Press Briefing | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Legislation, Press Briefing, White House Press Corps >> Full Story
Posted by White House Press Corps @ 8:27:00 PM The Big 3 Bailout Request - White House Press Briefing by Dana Perino 12/3/08 — Wednesday, December 03, 2008 —  MS. PERINO: Matt.Q The automakers' funding request, in their just-presented plans, totaled $34 billion in loans and credit lines, and that would be above and beyond the $25 billion in the Energy Department technology improvement funds that were already appropriated by Congress. That's quite a big sum over and above what the White House has shown a willingness to agree to or to support. MS. PERINO: Good point, right. Q What's your -- what's the White House -- MS. PERINO: Well, that's a good point, and we'll have to -- again, we're going to have to look at the plans and see what may or may not be able to be supported by us for those companies as they move forward. We have said that we want to try to help the automakers, and we've put forward a plan that we think that can get bipartisan support. But we need to look at each of them and see if what we would be able to support could actually be a good investment for the taxpayers, and we just don't know that yet. Q But you had said yesterday that $25 billion sounded -- the technology funds alone sounded pretty generous. MS. PERINO: Well, I think that to the American people, that giving $25 billion in taxpayer dollars to a specific industry is generous. But these are very serious times, and I'm sure the companies have spent a lot of time thinking through what they think they will need. And we'll have to wait and see what their plans say. Give us a chance to look through them. Let's see what they have to say tomorrow, and let's see what kind of support they can get on Capitol Hill tomorrow, as well. I think that remains a little bit of a mystery. Automobile Industry | Congress | Dana Perino | Legislation | Press Briefing | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Legislation, Press Briefing, White House Press Corps >> Full Story
Posted by White House Press Corps @ 4:38:00 PM Banks vs. Automakers - White House Press Briefing by Tony Fratto 11/24/08 — Monday, November 24, 2008 —  MR. FRATTO: Yes, Mark.Q Tony, in Lima over the weekend, President Bush spoke at length about the importance of free markets. Why don't all these bailouts undermine free markets by keeping troubled, distressed companies from failing? MR. FRATTO: Well, not at all. I mean, what these efforts are doing are to prevent the financial system from failing. It's never been about any one particular company. We let thousands of companies fail in this economy every year. It's a -- actually, an important part of a healthy company is to have companies competing against each other, and some of them fail, and the winners win, and that's good. But when you have systemically large companies that can bring down not just the entire U.S. financial system but the global financial system, and have a devastating effect on our broader economy, the government has to step in. And so we have an obligation to preserve that very important part of our economy, and that supports the free market system. Our firms can't get out there and do trade if they don't have trade financing. Firms can't get out there and distribute funds to their -- to companies who distribute products here and around the world if they don't have overnight credit financing. So that part of our economy is critical. We need to keep it in place; we need it to be strong; we need it to fill all of the holes in our economy that need financing in order to be able to do their business in a free and open economy. Q What guarantees do you have that they will do that, in terms of lending? MR. FRATTO: That they will lend? That's the business they're in, and the banks have no -- Q That may be, but they're not doing it. MR. FRATTO: Well, look, I think we're pretty confident in the guidance that we've given to banks to get out there and lend. They actually have been lending. They've had to shore up their balance sheets to make sure that they're in a good position. But banks only make money one way, and that's to be out there lending and making loans. Now, it's a very difficult economy we're in right now, so there's a question of the demand side of people requesting loans from banks also and whether there are good bets out there. We want them to make good business decisions. But banks are only in the business of lending, so they can't be profitable companies going forward unless they are looking for opportunities to lend. Q Why don't we help the automakers? MR. FRATTO: We are helping the automakers -- or at least we have a plan to help the automakers. We had a bipartisan agreement on the floor of Congress -- well, actually, it never made it to the floor because the Democratic leadership decided not to bring it to the floor. But we had a bipartisan agreement that we believe would get bipartisan support. It was for $25 billion in the loan program that would have freed up that money in a way that would support the automakers in their efforts -- to help to support them as they become viable firms, because these are important parts of our manufacturing base. We want to see the automakers succeed. There seems to be some misconception out there that we don't want to help the automakers. We do want to help the automakers. We had a bipartisan agreement to do just that, and we believe that's where those funds should come from. And by the way, the news overnight where -- this was a relatively unexpected effort by Treasury and the Fed. If you had said two weeks ago that they were going to have to take this action for Citibank, I think that would have seemed unlikely. This is a very dynamic situation we're dealing with, and the financial system is still fragile. But that also speaks to the need to preserve the funds in the TARP for their intended purpose. We don't need to be taking funds out of the TARP program for other purposes -- and with respect to the automakers, especially when we have a $25 billion loan program that was specifically set up for their use. Q Well, what's the hang-up? Is it because the money is coming out of the -- MR. FRATTO: That's a question for Congress, Helen. The money is there; we tried to work on both sides of the aisle to design it in a way that the automakers could access it and to help them move forward and be viable. So I would put that question to the Democratic leadership of the Congress. Automobile Industry | Economy | Press Briefing | TARP | Tony Fratto | White House Press Corps Labels: Automobile Industry, Economy, Press Briefing, TARP, Tony Fratto, White House Press Corps >> Full Story
Posted by White House Press Corps @ 6:33:00 PM Mindless Opposition of Reid & Pelosi - Air Force One Press Gaggle by Dana Perino 11/21/08 — Friday, November 21, 2008 —  Q Dana, are you saying Congress should have stayed in session and acted to authorize the 136 loans right now, and not waited a couple of weeks?MS. PERINO: Well, it seems to me that it's sort of senseless. You had a bipartisan path forward to help the automakers, as long as they were willing to show viability through the 136 program, that would not relax environmental standards. And nothing would bar the Congress from putting more money towards helping companies retool their plants if they wanted to in the future. So I would -- I just think that it was mindless opposition to anything that we would propose, and they cut off their nose to spite their face. So now we'll have to wait and see if they even come back on December 8th. But one thing that is very curious is how in the world are 535 members of Congress going to determine viability of a company? It's mind-boggling. They can't even get together to pass a Mother's Day resolution. So we are a little bit perplexed as to what they plan to do when they get back on the 8th and how they plan to do it. We agree that the viability portion of the language is absolutely critical. But we want these automakers to succeed. We don't want to see the huge numbers of unemployment that would result from a possible insolvency. And these companies have to be willing to make hard decisions to change for the long run. Q And those who are engaged in mindless opposition would be Reid, Pelosi, those people? MS. PERINO: Well, I think it's obvious. I don't have to name them -- they know who they are; you know who they are. They're the people who are opposing our plan, and the people who decided to go home without actually getting anything done. I mean, this is like do-nothing Congress part two, same song as they sang last time. And as I said, we will do what we can to try to put forward innovative policies like we had with this 136 program. It had a bipartisan path to succeed. And they wouldn't even allow for a vote. What kind of democracy is that? So we're a little bit perplexed. But we'll see what the companies come up with, and if they can meet the Democrats' so-called test. Okay. Automobile Industry | Congress | Dana Perino | Democracy | Harry Reid | Nancy Pelosi | Press Gaggle | White House Press Corps Labels: Air Force One, Automobile Industry, Congress, Dana Perino, Democracy, Harry Reid, Nancy Pelosi, Press Gaggle, White House Press Corps >> Full Story
Posted by White House Press Corps @ 6:47:00 PM Harry Reid: An American Prorogation - White House Press Briefing by Dana Perino 11/20/08 — Thursday, November 20, 2008 —  Q But my question is, if Congress does not act this week, is the administration just going to watch GM sink? MS. PERINO: If the Congress doesn't act this week and one of the companies is in imminent danger of insolvency, we would suspect that they would want to come back and finish the work that they didn't get done this week. Q You would anticipate that Congress would come back? MS. PERINO: We would -- I can't imagine a scenario where they wouldn't come back, unless the answer is that they just don't care. And if that's the case, then the American people ought to know that and hear it from them. Q What are the chances that something is going to get done this week? MS. PERINO: Well, we always remain hopeful. We believe the path that we've set forward could get bipartisan support if it was allowed to come for a vote. And so we would ask them to just think about taking a step back from partisan politics and throwing up obstacles for the sake of throwing up obstacles, and consider our proposal, and the one that Senators Bond and Voinovich have put forward, because we do think that they would be able to get help for the automakers in a way that would help them get through this rough patch, but also help them restructure, make the hard decisions necessary to restructure. I think the key point is that the American taxpayer should only be asked to help these companies if they're willing to make the hard decisions necessary to be viable in the long run. Q But why do you remain hopeful? I mean, are you hearing anything in the -- MS. PERINO: Well, they haven't left town yet. The gavel hasn't come down. And presumably, given the rhetoric that they've used over the past week, the Democrats believe that the automakers need help. Well, if that's the case, then they should allow us to move forward to have a vote on something that we think could get passed. The truth is Senator Reid's idea could not get enough votes in the Senate to get through the process. So the alternative would be to, well, could we think of another way, a bipartisan way where we could get the automakers help? Instead, he just wants to pull the plug and leave town. And we don't think that that is a good way to help the auto industry, and we certainly don't think it's a good signal for the bipartisanship that everyone pledged over the past year. Automobile Industry | Congress | Dana Perino | Democrats | Harry Reid | Legislation | Press Briefing | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Democrats, Harry Reid, Legislation, Press Briefing, White House Press Corps >> Full Story
Posted by White House Press Corps @ 5:26:00 PM It's a TARP! - White House Press Briefing by Dana Perino 11/18/08 — Tuesday, November 18, 2008 —  Q Congressman Hoyer says he is hopeful that the Democrats can reach a compromise with the White House on aid to automakers. Does the White House believe that such a compromise can be achieved this week, or are you beginning to see this as something that's going to have to be left for -- to be worked out with the Obama administration? MS. PERINO: Well, of course we remain hopeful that we can find a bipartisan solution. We think that we already have a bipartisan solution, because we have legislation that's already on the books, where money has already been appropriated to help automakers through the DOE loan program, 136 loan program. We've already put forward regulations that would guide how that would work. What we're simply saying is that maybe we can work together to amend that process so that companies that can prove viability could take advantage and have that money sooner if they need it during this rough patch. The House and Senate are in today, but they're having hearings. I think tomorrow you'll probably see a little bit more action once they're able to bring something to the floor. We still don't know exactly what they would bring to the floor. But we think that we have a solution here that is very logical and very reasonable. Perhaps it's so logical and so reasonable that people really just can't get their arms around it, because it's Washington, D.C. But we think that we have a path forward. And we'll let you know as we continue to work with members of Congress whether or not we can forge an agreement. We hope to do so this week. Q When you say "amended," do you mean amended so that it is not required to be used for fuel efficiency? MS. PERINO: Right, that those funds would be freed up and that they could use those funds for other things. That does not mean that we are relaxing any standards when it comes to fuel efficiency. President Bush proposed the changes that we are starting to implement now; Congress finally passed them. And we have a chance now to really improve the fuel efficiency of these vehicles. What we're saying is that the Congress already passed $25 billion for the auto industry so that they could retool their factories and meet those standards. They're still going to have to meet those standards, but if they need that money sooner and need it for other purposes, we're saying simply amend that bill and allow that money to be used for other things. And if in the future they decide -- the next administration and the Congress decides to add additional funds to help the automakers to meet those standards, that will be up to them. We just don't think that we should provide the $25 billion that was already on the table, plus an additional $25 billion, unless companies can show us that they have a long-term path for viability. Q So, Dana, is the primary sticking point, then, just the source of the money? If it comes from TARP, you don't like it; but if it comes from the Department of Energy, you do like it? I mean, does the White House completely agree that automakers do need and deserve this money? MS. PERINO: We want the automakers to succeed. There is a pot of money that exists, it's there for the taking, it's on the table. And we think that a simple amendment to the law that has already been passed to allow them to be able to use these funds is the best way for us to be able to help the automakers right now. And so we're going to try and help them do that. We don't think that these funds should be taken from the TARP. That was never the intent of Congress. That money is specifically for the financial industry, to help prevent collapse in our financial system. And that's what Secretary Paulson and Ben Bernanke are talking about this morning on Capitol Hill. Q So that's the only difference is that you don't like one source and they like a different source? I mean, I don't really see -- it seems like that is very close to an agreement. MS. PERINO: It's a significant difference. Well, it's a significant difference when you're talking about which pot of money to use, because we want the money that has already been appropriated, that we have rules that govern how it would be used. We also went through the process of rushing through, but doing it in a proper way, the rules of the road to prove viability that's defined in our legislation. What the Democrats put forward yesterday is a proposal that fails to require automakers to prove viability. We don't think that taxpayers should be asked to throw money at a company that can't prove that it has a long-term path for success. That's a key difference between us and them. Bret. Q Isn't it true that they want both? They don't one or the other, they want both. MS. PERINO: Right, they want the money that's already been appropriated and they want an additional $25 billion, which we think is unnecessary and unreasonable at this point. Automobile Industry | Congress | Dana Perino | Legislation | Press Briefing | TARP | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Legislation, Press Briefing, TARP, White House Press Corps >> Full Story
Posted by White House Press Corps @ 6:39:00 PM TARP Cover for the Auto Industry - White House Press Briefing by Dana Perino 11/17/08 — Monday, November 17, 2008 —  Q You've repeated over the last 10 days your opposition to funding anything for the auto industry out of the TARP program. Are you opposed to Congress amending that so that monies in that program could go to the auto industry? MS. PERINO: I don't think we think it would be necessary to do so when we already have a program with monies, $25 billion, appropriated specifically for the auto industry. The TARP funding is there for financial institutions. It was -- Congress never intended for individual industries to be able to come forward to -- Q And what if they change their mind? MS. PERINO: Well, I think that what they should be able to do is -- look, there's not an appetite in Congress, or in the administration, to open up the TARP funding for individual industries, because once you start down that road, it's a slippery slope to other industries that might say that they need help. But we do have an entire pot of money, $25 billion, that the auto -- that is specifically for the automakers. And we also know that opening up the TARP will not get through the Senate. Therefore, to avoid partisan gridlock, what we are recommending is to work hand in hand on a program that would simply amend the 136 program and help companies that can show long-term viability and a willingness to restructure. Q Would you guys veto? MS. PERINO: I think it's too early to say since we haven't even seen their legislation. It's too early to say. Q Dana, on that viability point, regardless of where the money comes from, whether it's TARP or the Department of Energy, it's still taxpayer money. Is that a good investment? Are the automakers a good investment? MS. PERINO: Well, I think that's another thing to remember, which is that the TARP program was specifically designed to help taxpayers get a return on their investment. This is monies that we are investing into companies. We are providing capital. And it has to be paid back. There is no direct subsidy that we are suggesting in the TARP. The Treasury Department has been making decisions based on what they think will at least make the taxpayers whole, if not help us get a return on that investment. When we're talking about the auto industry, and while we haven't seen the Democrats' proposal yet, it doesn't seem that would be the case, that the taxpayers would actually be paid back. But when we're talking about viability, what we mean is that a company needs to be able to show that they have long-term plans, so that they will be on -- have sound financing, and not have a vicious cycle of getting back into this situation again. One of the reasons that we agreed to go forward with the 136 program was to allow the companies to have access to a stream of funds to help them retool their factories so that they could build more fuel-efficient cars, which is what consumers of today are looking for. But in addition to that, the automakers have over time made some decisions based on their needs for their employees, and some of those decisions might have to be reworked, going forward. So they're going to have to be able to show how they can survive. If you look at their ability to compete worldwide -- we think that our companies can compete, but they're not going to be able to do so unless they make some of these really tough decisions. Q So are you saying they should get rid of pensions or health care provisions? MS. PERINO: It's going to be up to the companies to decide how best to -- how they can best compete in the world and show viability. We're not going to get into dictating that. Q But are you willing to let one or all of these three big automakers go under? MS. PERINO: Our position is that we want these companies to succeed. We have figured out a way to provide them funds so that they are able to do that. And we think that there is a bipartisan path that we could get this done very quickly this week and avoid that. Q But at the same time that you say that, you also are saying that they don't measure up to the viability standard, which -- MS. PERINO: But they might, and they might -- and if they can show that they can have a long-term -- that they have a long-term plan so that they are viable, then that would be taken into consideration. Q And so what is the next move for the administration to, you know, close the gap between you guys and the Democrats? MS. PERINO: Well, we're waiting for them to get back in town. We're waiting -- we haven't even seen their proposal. They've talked sort of around a proposal this week, but until we see it, it's really hard to react to it. And then we'll continue to work with our Republican colleagues as well to see if we can forge an agreement and get something done early this week. Automobile Industry | Congress | Dana Perino | Economy | Press Briefing | TARP | White House Press Corps Labels: Automobile Industry, Congress, Dana Perino, Economy, Press Briefing, TARP, White House Press Corps >> Full Story
Posted by White House Press Corps @ 6:55:00 PM Helen has a question - White House Press Briefing by Dana Perino 11/12/08 — Wednesday, November 12, 2008 —  Q I think Helen had a question. MS. PERINO: Helen has a question. Q Yes, I do. You say the President is not at fault for the auto industry problem. Do you think he's responsible for a solution? MS. PERINO: Well, I think that he -- Q And also, is there a quid pro quo on the Colombia trade agreement? MS. PERINO: There is absolutely no quid pro quo for that. And I was able to clarify that yesterday, and I was pleased that the President-elect's team clarified that as well. But I think that the President of the United States believes that companies are responsible for finding solutions. However, this is an industry, as I've said before, that's very important to the American people. And there are a lot of regulations that the government has tried to place on these companies over the years. And so Congress and the administration and the companies have an obligation to put their best minds towards trying to find out -- figure out what we can do to the greatest extent possible to try to keep these companies viable. And if we can do that, we certainly will. Q Is he aware that Michigan has 9 percent unemployment? MS. PERINO: Very well aware of it. And he's been very concerned about it. It's one of the reasons that he agreed to the UI extension from -- unemployment insurance extension that we provided in August. And we'll see what the Congress puts forward on that if they come back for a lame duck. Q Is he aware that Detroit won World War II by retooling in a matter of days to a wartime condition? MS. PERINO: He knows how important Detroit is, how -- its history, the industry, and how many people it supports, not just in Detroit, but all across our country, and the people all around the world who work for those corporations. He's very mindful of it. Automobile Industry | Dana Perino | Economy | Helen | President Bush | President-Elect Obama | Press Briefing | Unemployment | White House Press Corps Labels: Automobile Industry, Dana Perino, Economy, Helen, President Bush, President-Elect Obama, Press Briefing, Unemployment, White House Press Secretary >> Full Story
Posted by White House Press Corps @ 7:56:00 PM
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