New Obama car adviser known as tough negotiator

In addition to forming a task force to oversee the restructuring of the auto industry, President Obama is also set to name Ron Bloom, a former investment banker with a long track record of remaking troubled companies, to take the lead role in that task force and advise the president on auto industry policy. The Wall Street Journal reports that Bloom is known as a tough negotiator who can extract concessions to make companies more profitable:

Mr. Bloom, who made a name advising U.S. steelworkers to accept major concessions in several bankruptcy cases, is expected to take the task force’s lead role, a senior U.S. Treasury official says.

People who know Mr. Bloom expect him to be tough on the auto makers, the United Auto Workers and other parties involved in their restructuring.

“The management of the Big Three are probably not going to like what Ron Bloom has to say; the UAW is not going to like what Ron Bloom has to say; and certainly the stockholders and creditors will not like what he has to say,” said Michael Psaros, a co-founder of private-equity group KPS Capital Partners, who has worked with Mr. Bloom in and out of bankruptcy courts. He adds that Mr. Bloom has “repeatedly shown an ability to transform struggling companies into profitable going concerns.”

The article also notes that the option of bankruptcy is still on the table, both for the companies and for the Obama administration. Presidential adviser David Axelrod refused to rule out bankruptcy when he appeared on Meet the Press on Sunday, saying, “We’re going to need a major restructuring of these companies. How that restructuring comes is something that has to be determined.”