Task force head says government wants to sell car stock

The Obama administration plans to sell its shares in General Motors and Chrysler as soon as it can, the head of the autos task force told a congressional panel Monday.

Ron Bloom, now chairman of the Treasury Department task force overseeing GM and Chrysler, told a panel overseeing auto industry bailout money that the government would not sell all of its shares at initial public offerings that likely will come next year.

The government owns 61% of the new General Motors and eight percent of Chrysler. The task force is overseeing the two companies because they have received $65 billion in federal aid.

New versions of both GM and Chrysler recently emerged from short stays in government-funded bankruptcy protection, cleansed of old debt and burdensome contracts.

Also at the hearing, Bloom denied that the government had coerced Chrysler's debtholders into dropping a legal protest that they were being treated unfairly in court. Some holders of $6.9 billion in secured Chrysler debt initially protested that they were being pushed behind unsecured creditors such as the United Auto Workers union's retiree health care trust.

But the debtholders dropped their protests after receiving $2 billion in cash to wipe out their debt.

Bloom said he spoke to former task force chief Steven Rattner, who denied making any threats to any of the lenders. Some of the lenders had received government money from the bank bailout program.

Rattner stepped down from the task force on July 13 and was replaced by Bloom, a former United Steel Workers union official.

The administration said Rattner had decided to return to private life and his family in New York City. It remained unclear whether the departure had anything to do with the ongoing public corruption probe that has nibbled at Rattner's in New York.

Attorney General Andrew Cuomo and the Securities and Exchange Commission have charged a state official and a political consultant with extracting millions of dollars in kickbacks from investment firms trying to raise money from the state's big public pension fund.

The private equity firm Rattner led before joining President Obama's administration, the Quadrangle Group, paid more than $1 million to one of the people indicted in the case, New York political consultant Hank Morris.

Rattner has declined to comment.