DETROIT, March 16 (Reuters) - An adviser to President Barack Obama’s autos task force said it is working to avoid bankruptcy for General Motors Corp (GM.N) and Chrysler LLC and recognizes the “urgent” need to consider aid for suppliers, according to an interview published on Monday.
Steve Rattner, a former investment banker, told the Detroit Free Press newspaper the White House’s autos panel was committed to meeting a March 31 deadline for deciding whether GM and Chrysler can be restructured successfully.
But Rattner said in the interview the panel could take steps that go beyond the deadline established by the Bush administration.
“I think it’s more than likely that what you will see is not a single announcement ... but rather a series of actions over perhaps a reasonably long period of time,” Rattner told the newspaper.
Rattner was quoted in the article as saying the United Auto Workers union had been “very constructive” in concession talks with GM and Chrysler over payments due to healthcare trust funds.
But Rattner said GM bondholders were being “quite difficult” in parallel talks with the automaker intended to cut its financing costs as it restructures.
GM bondholders face pressure under the terms of the automaker’s bailout to reduce by two-thirds the roughly $27 billion they are owed, through an exchange for new equity in a recapitalized company.
Bondholders have balked at those proposed terms as unfair, given the payout terms being offered to the UAW and the remaining debt at GM.
Rattner told the newspaper the U.S. autos task force, headed by Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers, recognizes the mounting financial stress on auto suppliers is a “very, very urgent” issue.
“They have been left on their own,” he was quoted as saying. “We need to see if there’s some way to help them that is sound and consistent with our overall approach to this industry.
“Bankruptcy is not our goal. I’ve been in and around bankruptcy for 26 years as part of my private-sector work. It is never a good outcome for any company, and it’s never a first choice.” (Reporting by Kevin Krolicki; Editing by Andre Grenon)