After bailout failure, who are the top ‘car czar’ candidates?

A look at possible candidates to manage the makeover of the Big Three

The short-term bridge-loan bill failed in the U.S. Senate Thursday night; the bill was not a full bailout, rather a crutch that would allow the Big Three to limp through to the first quarter of 2009 and into a new presidential administration. A feature of the bill as approved by the House on Thursday was a “car czar” -– a president-appointed official with oversight responsibilities specific to managing the bailout loan and guiding the eventual turnaround of the American auto industry.

There has been considerable buzz about potential “car czar” candidates, each having pros and cons. Let’s take a look at the names that have come up so far, in the event that the bridge-loan bill is resuscitated or President Bush releases TARP money via the Treasury Department, with the proviso that a “car czar” is appointed to manage the funds.

Paul Volcker– Mentioned by House Speaker Nancy Pelosi as an example of a “car czar” candidate, Volcker brings a wealth of experience.

PRO: Economist by education, former Federal Reserve chairman under both Carter and Reagan. Volcker’s been down this road before, back in the early 1980s with Chrysler’s bailout program while he was Reagan’s Fed Reserve chair. He knows a bailout can work and can assure the public with his experience.

CON: There are no obvious signs that he’s interested in taking on this role; he may also have other bigger fish to fry for the Obama administration, since the administration will need all the competent and experienced financial chops it can get in order to turn the broader economy around. A less seasoned but competent manager may fill the bill instead of Volcker. Speaking of seasoned, the man is 81 years old; this may be more than a guy his age wants to tackle in terms of volatility.

Carlos Gutierrez –- Already familiar with the financial details behind the government bailout of the financial industry, Gutierrez is the current secretary of commerce.

PRO: A business school graduate, familiar with international business, Gutierrez also has ties to Michigan, having worked for Kellogg’s in Battle Creek as president and CEO. He’d worked his way from sales rep to the top-dog slot during his tenure with Kellogg’s.

CON: A solid Bushie. Does the American public really want to extend the reach of the last administration, and into one of its largest industries?

Jack Welch–- The former CEO of General Electric, Welch has steep street cred with the financial industry as a business reformer.

PRO: Well-educated, with a background in engineering and an even deeper background in business. His prowess in cost-cutting and weeding out dead wood in an organization earned him the title “manager of the century” from FORTUNE Magazine in 1999. Welch is a big proponent of so-called Six Sigma quality systems, through which organizations strive for zero defects in production.

CON: “Neutron Jack” was his nickname at GE, for a good reason. He left a bloody trail behind him, ruthlessly cleaning house throughout his organization, to the point where he was feared and not respected, and at a loss of institutional knowledge in exchange for an equally ruthless staff. Not the kind of guy who’ll seek consensus and build effective teams, an essential skill when working in the public sector and when working with unions.

Welch also made himself look very good at the long-term expense of General Electric. Late in his tenure with the organization, he got long-term loans to make payments on short-term debts, deferring the financial hit  in the hopes of other, future revenue enhancements. This kind of thinking would be anathema to the Big Three, as they are already saddled with too much legacy exposure.

Kenneth Feinberg–- Democratic attorney with extensive political ties, he’s worked as chief of staff for Sen. Ted Kennedy. Feinberg served as special master of the U.S. Government’s September 11th Victim Compensation Fund.

PRO: Has a considerable body of work in mediation and alternative dispute resolution, which might be very handy in negotiating new agreements between the Big Three and stakeholders.

CON: He’s an attorney. If you were an employer filling a position for a business manager, you might not look twice at someone whose experience and education was not in business. The political ties could also cause some heartburn.

For sure, there are a lot of negatives that offset positives across this group of candidates. Let’s hope that there are a few more and better candidates whose education and experience are a better fit to the demanding job of “car czar” that don’t compete with the bigger job ahead of righting the largest economy in the world.