The Obama administration's preference for robust electric car production will not influence its oversight of taxpayer equity in General Motors GM.UL and Chrysler, an administration official said.
Ron Bloom, the head of the government task force that facilitated the restructuring of GM and Chrysler this year, said in an interview with Reuters that there is a bright line separating the two issues.
"We obviously would be very happy if Chrysler and GM were making lots and lots of high mileage cars. It's not a prerequisite. It's not an obligation," Bloom said on Tuesday.
The government, which has deferred to directors and management of both companies, wants viable automakers that can compete globally and repay their loans in a timely way.
The Obama administration has extended $30 billion and bankruptcy financing and working capital to GM, and $8.5 billion to Chrysler. Those taxpayer investments translate into a 60 percent stake in GM and a nearly 10 percent share of Chrysler.
Plans at both companies call for more fuel efficient vehicles regardless of engine technology and a variety of smaller cars.
GM has made a big side bet on the Volt electric hybrid due out next year. But Fiat (FIA.MI)-led Chrysler this month set aside its plans to develop a similar mass-market vehicle, concluding the effort did not fit with its accelerated business plan.
The decision raised eyebrows in Washington, and in the environmental and energy communities, since Chrysler secured help from the government partly on its blueprint for battery powered vehicles.
"We're completely separating policy from ownership," Bloom said in response to the Chrysler decision. "We trust that the board has carefully thought through the various options of the company and where it was and made judgments on the electric program based on that."
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