March 17 (Bloomberg) -- The Obama administration is “open minded” about giving General Motors Corp. and Chrysler LLC more aid and will use “all the resources” of the federal government to avoid bankruptcy for the automakers, said Steven Rattner, chief adviser to the U.S. Treasury’s autos task force.

U.S. auto suppliers may get some aid, and the task force plans to meet a March 31 deadline for assessing GM and Chrysler viability, Rattner said yesterday in an interview. “We are open minded about committing additional resources to ensuring a viable domestic car industry,” he said.

“We will bring all the resources of the government to bear on these various stakeholders and try to reach a fair compromise, a set of compromises,” Rattner said. “Bankruptcy is not our goal nor a desirable outcome.”

GM and Chrysler, surviving on $17.4 billion in U.S. aid, have requested as much as $21.6 billion more. President Barack Obama’s auto task force is assessing the automaker proposals as it recommends whether to supply additional aid or tip the car companies into bankruptcy.

“We’re not going to simply hand out dollar bills on Pennsylvania Avenue,” Rattner said, adding that stakeholders might sense “the government will end up solving all problems, and it’s just not going to happen here.”

The U.S. has set a March 31 deadline for GM and Chrysler to submit final plans that show they can return to profit and repay what they borrow. Treasury Secretary Timothy Geithner, the task force’s co-leader, has the authority to extend that by 30 days if necessary. Rattner said the task force wants to keep to the date.

‘A lot of Uncertainty’

“There’s a lot of uncertainty,” he said. “There are a lot of peoples’ lives at stake here in terms of their careers. I think they’re all entitled to some guidance from us as to how we’re thinking about this, so we’re very much hoping to do that” by March 31, he said.

To meet the deadline, GM still needs to reach an agreement with bondholders to pare $27.5 billion in debt to $9.2 billion in exchange for equity. Bondholders “are very effective in looking out for their own interests,” Rattner said.

“I hope all stakeholders will recognize the gravity of the situation and the need for everybody to engage in shared sacrifice,” Rattner added, speaking of bondholders. “But the government cannot solve all the problems of all the stakeholders in this situation.”

Advisers to the ad hoc committee of GM bondholders said in a statement yesterday that they “stand ready to do our part to bring about a workable solution.” Bondholders are willing to discuss “any proposal that brings about the fundamental changes necessary to position GM for long-term success,” the statement said.

Giving Blood

GM also needs cuts from a union retiree health fund after reaching a tentative accord with the United Auto Workers that was announced Feb. 17.

“The UAW has been very constructive and very thoughtful,” Rattner said. “They don’t want to be the only ones giving blood or even necessarily being the first ones giving blood.”

Rattner said that while avoiding bankruptcy is a goal, “certainly there’s been no decisions made.” Nor is the government in a position to dictate to the automakers how many workers to have or plants to close, he said.

“We’re not in the business of running these companies,” Rattner said. “It’s not what we’re paid to do, that’s what management does. Our job is to figure out how the government can be helpful.”

Parts-Supplier Assistance

Suppliers may receive aid, he said. “We are giving some thought to whether there are ways that we can help the supply base that is consistent with our view that the government cannot help every company in every industry with every problem,” he said.

The Original Equipment Suppliers Association said last month that as many as one-third of the more than 4,000 U.S. suppliers face “imminent financial distress.” The OESA and the Motor & Equipment Manufacturers Association on Feb. 13 asked Treasury for $18.5 billion in aid.

GM Chief Executive Officer Richard Wagoner and Chief Operating Officer Fritz Henderson met with the auto task force yesterday in Washington, and while information was exchanged, no decisions were made, a person familiar with the matter said.

Wagoner also attended a session with German Economy Minister Karl-Theodor zu Guttenberg at the German Embassy in Washington. The meeting was to be about GM and its European subsidiaries, including Opel, Ulrich Sante, an Embassy spokesman, said in an interview.

Wagoner arrived in a silver BMW for the session and thanked Guttenberg “for meeting with us” before signing the embassy’s guest book and entering the closed-door meeting.

To contact the reporter on this story: John Hughes in Washington at jhughes5@bloomberg.net

Last Updated: March 17, 2009 00:00 EDT