Former White House auto adviser Steven Rattner has said General Motors and Chrysler likely would have been liquidated had their fates been left to Congress.
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Speaking at the National Press Club in Washington, he said congressional attempts earlier this year to block plans by GM and Chrysler to close dealerships as part of their restructurings “left an indelible impression on me,” Dow Jones reported.
“If we had not had TARP [Troubled Asset Relief Programme] money available and had had to seek congressional approval for each use of capital, I am convinced that one or both of the automakers would have been forced to liquidate,” Rattner said. TARP was initially designed to respond to the Wall Street banking crisis.
Rattner reportedly said the government intervention – US$50bn in taxpayer funding for GM and about $12bn to Chrysler – had given the companies the opportunity to become viable, but that a “successful recovery is far from assured”.
The biggest challenge facing Chrysler, now merged with Fiat, was a need to “regenerate its product lineup” and manage costs, he said. GM’s biggest challenge was whether it could change its culture “without an infusion of new blood” among management.
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