We can’t pretend to be overly enamored with former “car czar” Steve Rattner, who oversaw the auto bailout before being disgraced for his role in a New York pension fund pay-for-play scandal. Still, the guy was in the thick of things during last year’s negotiations over Detroit’s rescue, so he knows where the bodies are buried. And in his new book, Overhaul, which has been released to select outlets ahead of its October 14 publication, he tells a whole lot of stories about the months of bailout proceedings that led to the rescue of GM and Chrysler. Of course, Rattner has an agenda in all this, namely proving that
so he’s not necessarily an unbiased source. But with grains of salt at the ready, let’s dive into his spilled guts and see if what secrets lie beneath.
For one thing, Rattner reveals that the auto bailout was going to cost $100b instead of the eventual $85b pricetag. But hey, what’s $15b between friends? Rattner also claims that GM was nearly ousted from the RenCen. Or, more precisely, Fritz Henderson suggested moving GM’s headquarters to the Warren Tech Center, as a symbol of GM’s commitment to “hands on management.”According to the DetN,
Rattner praised the idea. But a White House aide, Brian Deese, who has been heavily involved in auto policy, denounced it.
“Are you out of your mind?” Rattner quoted Deese as saying. “Think what it would do to Detroit.”
The White House even commissioned an outside analysis of the impact a move would have on Detroit property values, Rattner wrote. The answer: an estimated “double-digit hit on already deflated real estate prices.”
Leaving the RenCen “made a lot of strategic sense,” Rattner wrote. But Michigan native Gene Sperling, a U.S. Treasury Department official, was one of many who fought the idea.
“It’s over for Detroit if you do this,” Sperling yelled in a meeting, Rattner recalled. “Don’t do this to (Detroit Mayor) Dave Bing… He’s a good man trying to do a good thing.”
Is it any surprise that Detroit hometown boosterism ended up playing such an important role in the bailout of America’s “national auto industry”? Luckily, as Rattner points out
this unique intervention into a specific GM matter was never leaked to the press, saving us from having to explain how it comported with our policy of letting GM and Chrysler manage their own affairs.
Rattner said he politely rejected the idea, because there was too much overlap. But he asked Ghosn: “Would you be interested in becoming CEO of GM?”
“I knew it was a long shot and was not surprised when he deftly demurred,” Rattner recalled.
But that wasn’t the only difficulty with foreign execs.
Fiat CEO Sergio Marchionne, he said, clashed with UAW President Ron Gettelfinger and sought to take advantage of the president’s timetable, which required a quick tie-up between Fiat and Chrysler.
Marchionne, he said, told Treasury officials: “This is a totally new ballgame.”
He also revealed that the government wanted Fiat to put up money for getting a 20 percent stake in Chrysler.
“We struggled to persuade Sergio to put up some cash,” Rattner wrote.
And we all know how that worked out. Meanwhile,
Marchionne, according to Rattner, told Gettelfinger about the need to accept a “culture of poverty” rather than a “culture of entitlement,” attacking, among other things, retiree health care benefits.
Gettelfinger responded angrily.
“Why don’t you come and sit with me and tell a 75-year-old widow that she can’t have surgery and that you killed her husband?” the union chief retorted.
According to Rattner, Obama stayed largely above the fray, asking sometime last November
Why can’t they make a Corolla?
But, it seems that the issue that most concerned Obama was the payoff to disgraced GM CEO Rick Wagoner
“I could see the president’s jaw muscles tighten,” Rattner recalled.
Obama had difficulty with the “notion of writing a check that was about 100 times the annual income of a GM worker to the CEO who had brought the company down.”
The president, he said, “grimaced and reluctantly acquiesced. I found it striking that the president of the United States had spent more time on an issue of executive pay than on the question of whether to dismiss a major CEO in the first place.”
Meanwhile, not everyone in the White House was even pro-bailout. The President’s Chief of Staff Rah Emmanuel reportedly asked
Why even save GM?
Fuck the UAW
Throughout the entire process that saved the auto industry, Rahm tirelessly defended and advocated on behalf of the auto workers. Any suggestion to the contrary is simply ridiculous
The book is history. We’re a new company and we have too much work to do and no time for book reviews.