The Czar's the star

Will the new administration in the US revive the idea of a regulator for the automotive industry there? The idea of a so-called 'Car Czar' was first mooted in legislation passed by the American lower house, but rejected before Christmas by the Senate. Since then -- and despite the best efforts of the Republicans in the Senate -- the American car makers have received assistance anyway; through TARP ('Troubled Assets Relief Program').

TARP was originally conceived as a scheme to assist banks and other lending institutions, but some of the funding from TARP was diverted by President Bush after the Senate rejected the plan formulated by himself and Democrats in the lower house, to keep the Big Three traditional US makers afloat.

The 'Car Czar' concept died with the Senate's rejection of the draft legislation, but it could be back on the agenda, now that President Obama has been inaugurated. For Americans, the idea that a government appointee could have some oversight and input into the way the car companies conduct their business smacks of nationalisation -- or communism, even.

Australians might be more amenable to such an idea, given that the local industry in Australia has been subject to the guidelines first proposed by Senator John Button in his eponymous plan back in 1984. Since then, local industry and government have worked very closely together. Both sides -- and the unions too -- have been committed to expanding sales, production and exports for the betterment of all.

As recently as the announcement of the Rudd Government's New Car Plan, the car companies have enjoyed the benefit of some 'influence' and guidance from government -- and the local CEOs have had nothing but praise for Senator Kim Carr, the incumbent government's counterpart to Button, who died early last year.

In America, GM's CEO, Rick Wagoner is probably aware of what goes on in other countries to aid the local manufacturing industry -- in a broadbrush sense, if not in detail. During the recent visit to the North American International Auto Show, the Carsales Network enquired of Wagoner, what was his stance on a 'Car Czar' for the US industry.

"Well, we're obviously tremendously interested," he responded.

"We haven't been asked for any specific input on it, but we have talked to members of the [Presidential] transition team and -- obviously, from our perspective, selfishly -- what would help would be the appointment of a designee or a group of people as soon as possible, because we have a lot of work to do between now and February 17 or March 30th.

"And presumably, if this person has not been engaged in the auto sector, there's a lot that we need to make sure is understood, so this is where 'sooner' would help us to do more."

This is where Wagoner lets his diplomatic cover slip. Reading between the lines, the possibility that a regulator might come to the industry without any hard and fast knowledge of the way the industry works appears to concern him. But does a regulator need to be a 'car guy' any more than the CEO of one of the car companies?

There is, of course, such an example of a car company CEO who has reached his position without specific industry-insider knowledge. That's Ford's Alan Mulally. Mulally is ex-Boeing and has implemented much of what worked for the aircraft manufacturer at Ford -- and arguably with greater success to date than either Wagoner at GM or Nardelli at Chrysler. Ford is in a slightly stronger position than either of the other corporations.

So although it seems like Wagoner doesn't look forward to some ingénue from the Feds mucking around in the car industry, he's careful not to pour bucketloads of cold water on the idea. But if he doesn't really describe in detail any 'cons' of a car industry regulator, are there in fact, any 'pros'?

"There are some 'pros'..." he agreed.

"A group of people who are knowledgeable and influential with any administration -- and being able to talk about the opportunities and the challenges for our business -- are going to be helpful with someone who understands that."

Wagoner does foresee potential for closer liaison between car makers and the government through the 'Car Czar'.

"Many of the public policy issues that the President Elect [Obama] has identified as being of primary interest -- whether it's... environment, whether it's manufacturing policy, whether it's healthcare... [the 'Car Czar'] could produce some positives," he stated.

Healthcare is a much larger issue for the three traditional American domestics than for their subsidiaries in other parts of the world. Legacy healthcare costs are generally regarded as one of the long-standing challenges facing the Big Three in the current climate.

It would undoubtedly be THE problem the Big Three are hoping a 'Car Czar' could fix for them.

Image: AP Photo/Manuel Balce Ceneta