WASHINGTON (Reuters) – The Obama administration task force overseeing auto industry restructuring turned its full attention to Chrysler LLC on Wednesday, which is seeking up to $5 billion in new bailout funds.
A person familiar with the matter said the panel, headed by White House and Treasury Department officials, met with Chrysler Chief Executive Robert Nardelli to discuss the company’s turnaround plan.
Nardelli was joined by Chrysler President Tom LaSorda, who heads the automaker’s manufacturing operations, and Chief Financial Officer Ron Kolka.
The company declined to comment.
Chrysler, which is controlled by private equity firm Cerberus Capital Management [CBS.UL], has received $4 billion in government loans approved in December, and has said it needs more funding to complete its turnaround.
General Motors Corp (GM.N) Chief Executive Rick Wagoner is expected to meet with members of the task force on Thursday, according to another person briefed on the matter.
Earlier this week, Ford Motor Co (F.N) purchasing chief Tony Brown met with the task force.
That meeting came as the U.S. auto supply industry presses its case for up to $18.5 billion in emergency aid to head off a wave of possible bankruptcies because of sharply reduced auto production.
Separately, Federal Reserve Chairman Ben Bernanke sought to reassure lawmakers on Wednesday that a Treasury financing program expected to take effect soon should help dealers having trouble financing vehicles they sell to consumers.
Rep. Thaddeus McCotter, a Michigan Republican, pressed Bernanke on the matter and said after the hearing that he believed Bernanke was sincere when he detailed the assistance program and did not close the door on additional steps, if necessary.
“There are a lot of moving parts,” McCotter said of aid requests from manufacturers, suppliers and dealers. “I believe he understands the problem.”
GM is seeking another $16 billion in assistance as part of its restructuring plan, which along with Chrysler’s, was submitted to Treasury officials on Feb. 17.
Under the December bailout, the government has until March 31 to determine whether GM and Chrysler can restructure and become commercially viable.
President Barack Obama has said he favors a competitive U.S. auto industry. But there is skepticism about the industry’s viability, especially among Republican leaders in Congress.
Chrysler has said it would have to wind down operations if it fails to restructure and does not receive new assistance by the end of March.
Chrysler posted an $8 billion loss in 2008 and forecasted a $1.1 billion loss this year on a stand-alone basis with sales plummeting, according to its restructuring plan. Chrysler’s U.S. sales fell 55 percent in January after falling 30 percent in 2008.
February sales for the industry are expected to be depressed as well with recession and consumer credit woes hitting automakers hard.
Nardelli has said he opposes bankruptcy and is pursuing strategic alliances and partnerships. This includes a potential deal with Fiat SpA (FIA.MI), which is contingent on continued federal aid.
In its restructuring outline, Chrysler said it plans to cut 3,000 employees, discontinue three vehicle models — the PT Cruiser, Aspen and Durango SUVs. It also plans to cut outstanding debt by $5 billion.
(Reporting by John Crawley; Editing by Lisa Von Ahn and Tim Dobbyn)