US gov't opposes House-approved plan

• Source: Global Times
• [10:24 July 22 2009]
• Comments

The Obama administration's chief auto adviser Ron Bloom warned the US Congress Tuesday that a House-approved plan could threaten the reorganizations of General Motors Co and Chrysler Group LLC.

The House passed legislation last week to force GM and Chrysler to restore 3,200 dealerships that were expected to be closed through the bankruptcies. The Senate hasn't considered the plan.

"Political intervention of this nature could also jeopardize taxpayer returns by making it far more difficult for the companies to access private capital markets if there is ongoing uncertainty about whether Congress will intervene to overturn judicially approved business decisions anytime that it disagrees with the judgments of the companies," Bloom said in prepared remarks.

He said the plan would set a "dangerous precedent" and raise legal concerns that could force the companies to intervene in a completed bankruptcy.

The auto makers have warned that reversing the dealership closings could increase their restructuring costs by billions of dollars.

Agencies and Shi Jierui contributed to this story