Tags: US | Auto | Bailout

Obama Plans $800 Million Fund to Clean Up Old GM Sites

Tuesday, 18 May 2010 12:57 PM

The Obama administration on Tuesday proposed a trust fund of more than $800 million to pay for the clean up of closed General Motors sites in 14 states.

Ed Montgomery, who leads the White House Council on Automotive Communities and Workers, said the fund would clean up nearly 90 properties shuttered in the GM bankruptcy.

He said it represented the largest environmental and economic development effort for former manufacturing sites.

The cleanup plan will help raze or rehabilitate dozens of vacant manufacturing facilities and offices left barren by GM's government-led bankruptcy last year. Montgomery announced the cleanup at a conference sponsored by the White House and the Brookings Institution on the future of automotive communities affected by the industry's downsizing.

General Motors received $50 billion in government aid to get through its bankruptcy last year. GM has repaid $6.7 billion that the government considered loans, with the remaining $43.3 billion converted to a 61 percent stake in the automaker.

GM said Monday that its net income rose to $865 million in the first quarter. Company officials have said a public stock offering — a key step in the government eventually selling its ownership stake — could come later this year, or in 2011.

White House economic adviser Larry Summers gave an upbeat assessment of the company's future, saying there was a "real prospect of the government recovering most, if not all, of its investment" in GM.

Montgomery and Summers said the proposal would provide $536 million for the cleanup of properties and about $300 million to help states and communities pay for property taxes, demolition costs, plant security and other expenses.

More than half of the sites are in Michigan and others are located in Ohio and New York. The fund will "take these properties and once again make them productive assets for your towns and communities," Montgomery said.

The funding comes from $1.2 billion provided by the Treasury Department to wind down the "bad" assets of GM set aside in the company's bankruptcy.

The administration plans to work with states to finalize the plan, and will present the framework of the cleanup to the U.S. Bankruptcy Court for the Southern District of New York for approval.

Michigan Gov. Jennifer Granholm said the rehabilitation of the manufacturing sites would help states trying to lure "green" manufacturing jobs such as battery production, wind turbines and solar panels.

"We want to make these sites the place for them to locate," Granholm said.

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The Obama administration on Tuesday proposed a trust fund of more than $800 million to pay for the clean up of closed General Motors sites in 14 states.Ed Montgomery, who leads the White House Council on Automotive Communities and Workers, said the fund would clean up...
US,Auto,Bailout
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2010-57-18
 

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