U.S. Congress Wants To Read GM, Chrysler Decisions Small Print

WASHINGTON, July 17, 2009; John Crawley writing for Reuters reported that a U.S. Congressional committee approved a resolution on Friday seeking documents and other information from the Obama administration's autos task force regarding major decisions made on the restructuring of General Motors Corp and Chrysler LLC.

The House Financial Services Committee voted unanimously to send its request to the full House of Representatives for consideration. There is no immediate timetable for action on the measure.

The Senate is not required to act for the resolution to take effect.

Sponsored by Republican leader John Boehner, the resolution seeks to answer calls from some lawmakers for more transparency in the administration's handling of GM and Chrysler.

"It's not about taking sides. It's about acquiring information about the process," said Spenser Bachus, the top Republican on the Financial Services panel.

"I think the American people and Congress have questions," Bachus said, noting that taxpayers have extended bailouts and bankruptcy financing and now own a majority stake in GM (60 percent) and a lesser share in Chrysler (8 percent).

The Financial Services Committee oversees the Treasury Department's corporate bailout efforts, which mainly have been aimed at banks. The task force is an arm of the Treasury.

Lawmakers are most interested in details on decisions about plant closings, dealer cuts, and reductions in benefits to workers and retirees.

They also want information on decisions to extend bankruptcy financing to both companies, which resulted in the government's assumption of equity stakes, and decisions on debt reduction.

The resolution does not seek information directly from GM or Chrysler.

The task force, which was created just after the Obama administration took office, swiftly engineered the bankruptcy reorganizations of GM and Chrysler this spring, forcing both companies to cut debt and achieve concessions from labor and vendors.

Led by Steven Rattner, a former investment banker and co-founder of the Quadrangle private equity firm, the task force operated largely behind closed doors. Its secrecy was a source of frustration for some lawmakers and industry officials. But the group has received high marks for its serious approach and for dispensing strong medicine to a failing industry that for years had resisted change.

Rattner and other task force officials have said they required fundamental restructuring at GM and Chrysler, but left details on plants, brands, dealers and other operating elements to management.

Dealers, especially, have sought deeper explanations from the companies and the government over decisions to close 789 showrooms at Chrysler and 1,300 at GM. Some dealers complain their franchise rights were violated in bankruptcy. Congress is considering legislation to address their concerns.

GM declined comment on the Financial Services action. Chrysler and Treasury officials could not immediately be reached.

Editing for Reuters by Gerald E. McCormick