Senate panel to question Obama’s auto task force of handling of GM, Chrysler

Senate to review work of Obama’s auto task force

WASHINGTON — Members of President Barack Obama’s auto task force face questions in the Senate Wednesday about billions of dollars in government aid to rescue General Motors and Chrysler and whether taxpayers would eventually receive a return on the money.

The Senate Banking Committee was hearing from Ron Bloom, a senior adviser to the auto task force, and Edward Montgomery, who serves as Obama’s director of recovery for auto communities and workers.

Bloom, along with Treasury Department adviser Steven Rattner, has been a leading architect of the government’s work to reorganize General Motors Corp. and Chrysler LLC through the bankruptcy courts. Montgomery has been the administration’s point person on helping Midwest communities dependent upon the auto industry.

The Senate panel, led by Democratic Sen. Christopher Dodd of Connecticut, was reviewing the use of funds from the Troubled Asset Relief Program, or TARP, to help the auto companies and the steps taken to help communities hurt by auto plant closings and job losses. Lawmakers also were expected to ask Bloom whether the companies will repay the loans.

General Motors filed for Chapter 11 bankruptcy protection on June 1 and company leaders have said they hope to emerge as a new company in 60 to 90 days. Italian automaker Fiat Group SpA closed a deal on Wednesday to become the new owner of most of Chrysler’s assets, saving the company from liquidation.

The administration has said it does not intend to run the companies’ day-to-day operations. Lawmakers from both parties have questioned the shuttering of hundreds of dealerships, and the government’s decision to take a majority ownership in GM and a small stake in Chrysler.

Several House members, including Majority Leader Steny Hoyer, D-Md., were introducing legislation on Wednesday to protect franchise agreements for the ousted dealerships. Sen. Mike Johanns, R-Neb., has pushed legislation to give Congress veto power over the expenditure of any bailout money by the government to buy a stake in a company. Sen. Bob Corker, R-Tenn., meanwhile, has proposed requiring GM and Chrysler to fully reimburse their rejected dealers for their inventories of vehicles and parts.