Congress Wants More Say In Chrysler, GM Matters

WASHINGTON (AP) -- President Barack Obama calls his administration a reluctant shareholder in the nation's troubled banks, insurance companies and car makers, promising "to get out quickly" once market conditions allow. But there are 535 other important Washington stakeholders: Congress.

Many lawmakers have their own, more activist view about the government's ownership role, seeming at times like a Congress of CEOs.

They have made it clear they want to be active partners in rescue oversight regardless of Obama's vow to mostly let managers manage. Some are even seeking to weigh in on specific GM and Chrysler plant-closing decisions and appealing for more leniency in shutting down dealerships.

"When can we expect the American taxpayers to receive a return on their investment?" wonders Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee.

That's a question he said he'll put to White House and Treasury officials overseeing the Detroit fix when they testify before his committee Wednesday. Dodd said he also wants to know exactly how taxpayer dollars are being used and "why is the government taking such large ownership stakes in these companies?"

Congress already has slapped conditions and limits on how Washington's money is used in overseeing damaged companies, including restrictions on executive pay and hiring. That's one reason banks are so eager to give the money back.

But nowhere is the threat of micromanagement so evident as with the auto industry

The government's expected 60 percent controlling stake in the new General Motors and roughly 8 percent share in Chrysler and the looming closings of dozens of plants and thousands of dealerships raised red flags galore on Capitol Hill.

Members of Congress, reflecting views of their constituents, can easily relate to the closing of auto plants and shuttering of car dealerships. It hits a lot closer to home than dry debates over mortgage-backed securities, credit default swaps and derivatives regulation.

"There's danger in this meddling," said American University professor James Thurber, an expert on the presidency and Congress. Thurber noted that lawmakers are seeking to intervene "even at the same time they're saying we don't want our government running these companies."

But he said strong populist sentiment is propelling the efforts to micromanage. Closing plants and dealerships means thousands of lost jobs all across the nation.

And car dealers wield huge lobbying might. Not only did they contribute more than $9 million to federal candidates for the 2008 elections, but they often play high-profile roles in their communities and are a significant source of local jobs across the nation.

Among the attempts at congressional intervention:

-- Some 116 House members, including Majority Leader Steny Hoyer, D-Md., signed a letter this week urging the White House to delay the closing of dealerships, claiming it "will put over 100,000 jobs at risk at a time when our country is shedding jobs at an alarming rate." The letter held out the prospect of legislative action if necessary.

-- A group of Republicans is proposing that congressional approval be required before any further bailout money from the Treasury Department is used to buy a stake in a car company. The lawmakers complained that Congress had no opportunity to review the Obama administration's decision earlier this month to take controlling ownership of GM.

-- Sen. Bob Corker, R-Tenn., has proposed legislation to require Chrysler and GM to use any taxpayer money they receive "to fully reimburse" spurned dealers for inventories of vehicles and parts. "We hope Chrysler and GM will take appropriate actions and make this amendment unnecessary," Corker said.

-- Sen. Kay Bailey Hutchison, R-Texas, last month threatened to hold up a war-spending bill because of the dealer closings.

At a recent hearing, she told GM and Chrysler chiefs: "It's not our place to change your decision. It is not. But it certainly is our place, especially where there is so much taxpayer money involved, for us to make sure that everyone is treated as well as can be in this circumstance."

Obama said the federal government would exercise its rights as the controlling GM shareholder only in "the most fundamental corporate decisions." After appointing part of a new board of directors, he said, his goal was "To get GM back on its feet, take a hands-off approach and get out quickly."

Steven Rattner, head of the White House auto task force, said this means: "No plant decisions, no dealer decisions, no color-of-the-car decisions."

But lawmakers have made it clear they want to be heard in the board rooms.

Even before last week's bankruptcy filing by GM, the Michigan delegation and some other car-state lawmakers protested GM's decision to boost its imports of small fuel-efficient cars made at GM factories in China.

As a result, GM agreed to have the work done at at least one of three idled U.S. plants, two of which are in Michigan.

And, while the administration has vowed a basic hands-off approach to day-to-day management, in light of the size of the investment of tax dollars -- $50 billion so far and still growing -- it will be hard for both the administration and Congress, to keep hands off.

Even the package bankruptcy deal it helped frame between GM and the United Auto Workers contains a provision that no tax dollars would be used for any of GM's overseas subsidiaries.

The White House also has made it clear that GM's future lies in producing small, efficient cars such as the relatively expensive Chevrolet Volt -- vehicles for which there may not be a demonstrated market.

It seems inevitable that some of their policy goals may be inconsistent with the management interests.

"There obviously is a balancing act," says White House press secretary Robert Gibbs.

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