Obama: No Desire to Micromanage Chrysler, GM

(MoneyWatch)  President Obama strongly denied he has any desire to micromanage Chrysler or GM, or to retain large shareholdings in those companies.

"I don't want to run auto companies. I don't want to run banks," the president said in answer to a question at a press conference, which was nationally broadcast Wednesday night, April 29.

"I've got two wars to run," Obama said, in Iraq and Afghanistan. "The sooner we can get out (of Chrysler and GM), the better off we're going to be."

That could take a while. The latest restructuring plan for General Motors would make the U.S. Treasury Department the majority owner of GM. Chrysler's restructuring plan also calls for a heavy government stake, although not a majority. The president said his strategy will be to look for "private buyers" for Chrysler and GM.

Obama said he doesn't want to micromanage the automakers, but he said it's legitimate for the government to make sure taxpayer money doesn't get "thrown down the drain."

He also asked rhetorically why Japanese automakers seem to have a big lead in manufacturing plug-in hybrid cars.

Today's hybrids run off a rechargeable battery and a conventional, internal-combustion engine. When the battery runs low, the engine recharges the battery. A plug-in hybrid works much the same way, only it uses an improved battery, which can be recharged using ordinary household current. That's much cheaper than recharging the battery using a gasoline engine as a generator, especially during off-peak hours for household current.

"I'm not an auto engineer. I don't know how to design an affordable, well-designed, plug-in hybrid, but the Japanese can (do it) -- then doggone it, the American people should be able to do the same. So my job is to ask why is it you guys can't do this?" the president said.

U.S. automakers no doubt would respectfully reply that they're working on it.

"Affordable" is the hardest part of Obama's line about an "affordable, well-designed plug-in hybrid." Actually, there aren't any plug-in hybrids on sale yet, so no one knows exactly how affordable they will be.

U.S. automakers have long complained that behind-the scenes government support in Japan provides Japanese automakers with cost advantages that the American companies don't enjoy. That includes export-oriented trade policies; low borrowing costs; official and unofficial barriers to automotive imports; and support for research and development.

From an automotive point of view, the president also would have been on safer ground if he had questioned why U.S. automakers are so far behind on more conventional hybrids, like the Toyota Prius, instead of picking on plug-in hybrids specifically. The Toyota Prius utterly dominates the U.S. market for hybrids. Toyota recently introduced the third generation of the Prius, while the U.S. companies are still rolling out their first generation of hybrids, in much more limited numbers.

Obama went on to acknowledge that Chrysler and GM are building some "terrific" cars, but he challenged them to, "give me a plan that plays to your strengths."

The president repeated that he wanted to "disabuse people of the notion that we enjoy meddling in the private sector. When we came into office, if you had told me the banks are hummin', and autos are sellin', and all I would have to deal with was Iraq, Afghanistan, North Korea, getting healthcare passed, energy independence ?€" and a pandemic flu ?€" I would take that deal."

Photo: whitehouse.gov