Obama may find it tough not to meddle in GM affairs

By Caren Bohan and Ben Klayman - Analysis

WASHINGTON/CHICAGO (Reuters) - President Barack Obama may find it tough keeping a pledge not to meddle in the management of General Motors Corp (GM.N) once the government takes majority ownership of the giant automaker.

The White House has put a priority on encouraging environmentally friendly technology. It could be tempted to weigh in on issues such as the mix of vehicles.

And lawmakers -- some of whom already have spoken out against a GM proposal to shift some production overseas -- may insist on a voice on everything from the location of plant closures to the pay scales of top executives.

"We're already seeing them force out the CEO, restructure the board and talking about the right kind of cars for them to build," said Douglas Holtz-Eakin, who was a top policy aide to former Republican presidential candidate Senator John McCain.

He was referring to the decision to pressure Rick Wagoner to step down as GM's chairman and chief executive.

"I don't know where that ends and I don't know how you easily end it," said Holtz-Eakin, now a private consultant.

The 100-year-old automaker, once the world's largest, filed for bankruptcy protection to begin what the Obama administration hopes will be a fast-track restructuring.

The slimmed-down company that will emerge is expected to be 60 percent-owned by the U.S. government, which is giving GM a $30 billion cash infusion. The Canadian government and Ontario will take a 12 percent stake.

"We are acting as reluctant shareholders, because that is the only way to help GM succeed," Obama said. "What I have no interest in doing is running GM."

SAFEGUARDS IN PLACE

The Obama administration also said it had created safeguards to prevent interference, including prohibiting government officials from sitting on the firm's board or working for firms in which the automaker invests.

U.S. officials, who briefed reporters on the details of the GM restructuring on Sunday night, likened the government's ownership role to that of Fidelity Investments, a mutual fund giant that often holds large amounts of shares in other companies but does not seek to manage them.

Officials held a separate conference call with lawmakers to make it clear they wanted to draw lines and not allow political interference on issues like shutting plants.

The administration wants to balance two main aims, said Gene Sperling, counselor to U.S. Treasury Secretary Timothy Geithner.

It wants to make sure there is a strong board in place "and a strategy for viability" but "that must be combined with an equally strong commitment to stay out of even controversial day-by-day business decisions," Sperling said.