Jan. 13 (Bloomberg) -- Steven Rattner, co-founder of private-equity firm Quadrangle Group LLC, may be named by President-elect Barack Obama to oversee the bailout of the U.S. auto industry, according to two people familiar with the matter.

A decision on the “car czar” position hasn’t been made and Rattner hasn’t received a formal offer, said the people, who declined to be named because the deliberations are private. Obama is scheduled to be inaugurated Jan. 20 in Washington.

The auto bailout announced last month, aimed at keeping the carmakers alive, gives the government an oversight role in the car industry for the first time in 30 years. The car czar would enforce deadlines and requirements to revamp the industry set by the U.S. government as part of its agreement to extend a $17.4 billion lifeline to General Motors Corp. and Chrysler LLC.

“He fits the bill,” Rod Lache, an auto industry analyst with Deutsche Bank, said today of Rattner. Lache, speaking in response to a question at the Society of Automotive Analysts meeting in conjunction with the Detroit auto show, said, “He is a fund manager. He can look at a plan and say it does or doesn’t make sense.”

Rattner, 56, is a former New York Times reporter who started Morgan Stanley’s media acquisitions group in 1984 and moved to what was then Lazard Freres & Co. before creating Quadrangle in 2000.

A spokesman for Rattner declined to comment, as did Jen Psaki, a spokeswoman for Obama’s transition office.

GM’s Response

“I’ve read about Rattner, as well as others, but I simply don’t know if there’s any merit to any of these people being actually considered,” Fritz Henderson, GM’s chief operating officer, said today. “We haven’t heard.”

Senator Carl Levin, a Michigan Democrat, said today he hasn’t spoken to Obama’s transition team about who the czar might be and didn’t know who was being considered. He said he hoped he would be informed before someone is nominated.

GM and Chrysler last month got government pledges for emergency loans in exchange for substantially restructuring their businesses. GM received the first $4 billion Dec. 31 from the Troubled Asset Relief Program administered by Treasury. Chrysler LLC received $4 billion on Jan. 2.

Chrysler’s ownership could raise some questions for Rattner. The carmaker’s majority owner is private-equity firm Cerberus Capital Management LP, which also is among the lenders to Alpha Media Group Inc., one of Quadrangle’s holdings.

Alpha, publisher of magazines such as Maxim, is working with its creditors on a potential restructuring. It involves a $125 million loan from financiers including Cerberus.

Treasury Secretary Henry Paulson is in effect the car czar now, overseeing administration of the loans, until Obama takes office and puts his own person in place.

Falling Sales

U.S. automakers are struggling to pare costs after U.S. sales last year fell to 13.2 million units, the lowest level since 1992. A global credit shortage hurt buyers’ ability to get loans and the slowing economy sapped demand.

The automakers have until March 31 to meet the conditions of the loans, including demonstrating they have a plan to become profitable, or be forced to repay. A progress report to the Treasury Department is due Feb. 17.

An additional $5.4 billion is due to GM this month. After that, an additional $4 billion will be available to GM in February provided Congress releases the second half of the $700 billion fund originally set up to bail out financial institutions. President George W. Bush yesterday asked Congress on behalf of Obama to tap the remaining $350 billion.

GM, the biggest U.S. automaker, and No. 3 Chrysler had said they would run out of operating funds as soon as last month without the aid. Bush stepped in after Senate Republicans’ refusal to take up a House-approved rescue.

Enough Funding

GM Chief Executive Officer Rick Wagoner said this week that his company has enough funding currently to meet its needs and that the company will review the situation again at the end of this quarter.

GM is trying to win concessions from its biggest union, cut debt in half and eliminate brands and dealers as part of a survival plan. Ford Motor Co., the second-biggest U.S. automaker, has said it can continue operating without aid for now.

Rattner, who initially supported Sen. Hillary Clinton for president, attended a $30,800-per-person breakfast at Manhattan’s Metropolitan Club in October to help raise money for Obama. He also has served on a council of economic advisers to New York’s Democratic Governor David Paterson.

Quadrangle Asset Management handles the personal and philanthropic finances of New York Mayor Michael Bloomberg, the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.

To contact the reporters on this story: Jason Kelly in New York at jkelly14@bloomberg.net; Doron Levin in Southfield, Michigan, at dlevin5@bloomberg.net.

Last Updated: January 13, 2009 15:38 EST