UPDATE 1-Former U.S. auto czar Ron Bloom to advise Detroit retirees

Thu Sep 19, 2013 7:44pm EDT

By Joseph Lichterman

DETROIT, Sept 19 (Reuters) - Ron Bloom, one of the architects of the Obama administration's restructuring of the U.S. auto industry, is advising Detroit retirees facing cuts in healthcare benefits and pensions in the city's Chapter 9 bankruptcy case, U.S. investment bank Lazard Inc said.

Lazard, where Bloom is now vice chairman, confirmed it was selected as a financial advisor to a nine-member committee that represents Detroit's 23,500 public sector retirees.

Benefits consulting firm The Segal Company was also hired, two people familiar with the matter said on Thursday. They declined to be named because the information is confidential.

Segal declined to comment, as did Bill Nowling, a spokesman for the city of Detroit.

On July 18, Detroit became the largest city in U.S. history to seek bankruptcy protection. Detroit emergency manager Kevyn Orr has said retirement benefits could be cut as the city struggles to pare down more than $18 billion in debt.

Roughly half of Detroit's liabilities stem from retirement benefits, including $5.7 billion for healthcare and other retiree benefits, and $3.5 billion involving pensions.

Orr also worked on the 2009 auto bailout as a lawyer for Chrysler. At the time, Orr worked for law firm Jones Day. He was named Detroit's emergency manager in March.

Bloom's hiring was first reported by Bloomberg News.