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Obama May Tap Auto Chief Bloom to Craft Manufacturing Policy

By Robert Schmidt

Aug. 20 (Bloomberg) -- The Obama administration may elevate Ron Bloom, head of the government’s auto task force, to a job that would set U.S. manufacturing policy more broadly, people familiar with the matter said.
Bloom, a former United Steelworkers union adviser and Lazard Ltd. investment banker, helped guide General Motors Co. and Chrysler Group LLC through bankruptcy as part of the government’s rescue of the auto industry. The task force will continue, and it hasn’t been decided whether Bloom will remain its leader while taking on the new role, the people said.
The move may alleviate criticism from Democratic allies that the administration spent billions of dollars to prop up investment banks and did little to aid average Americans. Manufacturing employment in the U.S. has fallen to 11.8 million workers, the lowest level since 1941. The White House expects the unemployment rate overall to rise above 10 percent.
“A fork in the road was taken that emphasized the resuscitation of Wall Street rather than the resuscitation of Main Street,” said Leo Hindery Jr., an investor in media companies and former chief executive of AT&T Broadband. Jobs “need to be the product of a policy” and Bloom is “very cognizant of these issues,” he said.
Creating such a post may also help ease concern that President Barack Obama’s economic policies haven’t been effective enough. He signed a $787 billion stimulus measure in February, promising that the law would save or create 3.5 million jobs over two years.
Jen Psaki, a White House spokeswoman, declined to comment, as did Treasury spokesman Andrew Williams.
Auto Panel
Some details of Bloom’s position are still being worked out, the people said. The auto panel’s role is diminishing now that the companies have gone through restructuring.
As the chief policy maker on manufacturing, Bloom would be charged with reviewing U.S. competitiveness in the global economy. His job would likely encompass trade, taxes and other economic issues, the people said.
Bloom, 54, has begun reaching out to some of the nation’s largest manufacturing companies to discuss ideas, one of the people said.
The U.S. is the only major country that doesn’t have a coordinated industrial policy, leaving it at a disadvantage to competitors such as China or Germany, Hindery told the Senate Banking subcommittee on economic policy last month. He is also chairman of the Smart Globalization Initiative at the New America Foundation, a policy research group in Washington.
‘Robust Policy’
The panel’s chairman, Senator Sherrod Brown, has called for a “robust national policy” to strengthen manufacturing.
“The risks associated with allowing U.S. manufacturing to wither on the vine -- the risks to our economic security, to our energy future, to our national defense -- are too great to sit on our hands and let it happen,” Brown, an Ohio Democrat, said at the hearing.
In the U.S., manufacturing employment is down 40 percent from a record 19.6 million jobs in 1979, according to Labor Department figures. Factory workers as a share of all non-farm payrolls in the U.S. have shrunk to 9 percent, from 22 percent three decades ago.
While the Bush administration created a position at the Commerce Department for a so-called manufacturing czar, Bloom’s job would be higher profile, the people said.
Bloom became head of the Treasury Department’s auto task force in July when Steven Rattner stepped down.
The government controls about 61 percent of Detroit-based GM and 10 percent of Chrysler in exchange for loans that kept the automakers from liquidating.
GM left Chapter 11 protection on July 10 as General Motors Co. Auburn Hills, Michigan-based Chrysler Group LLC was formed from most of the assets of Chrysler LLC on June 10 by a group led by Fiat SpA.