By on March 17, 2011


As the former “car czar,” who led the government’s restructuring of GM and Chrysler, Steve Rattner has a considerable interest in portraying his pet projects as having turned the corner. But in a recent CNBC appearance, Rattner acknowledges that the market is “spooked” by GM’s increased reliance on incentives and the “unexpected” departure of its Chief Financial Officer. Ford, meanwhile, simply gets rapped for not communicating a slightly lower Q4 profit than Wall Street expected. And though Rattner’s not the guy to press the point home, there’s a clear distinction to be made between a much-hyped stock aligning itself with expectations (while making a tidy $6b+ profit) and a company that’s losing key personnel while leaning on incentives to recover the volume lost on brand and dealer cuts. But Rattner’s got bigger worries than short-term financial performances, or incentives or personell changes… he sees another, equally familiar problem that’s fixing to give GM (and, to a lesser extent, Ford) the fits: rising gas prices.
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By on January 8, 2011

John McElroy recently quit the Automotive Press Association because they invited Steven Rattner, former head of the government’s auto industry task force, to speak. He warned, “If you want to read [his] book, DON’T BUY IT. Get it from your local library, because Steven Rattner is a rat who doesn’t deserve a dime of anyone’s money.” What he didn’t say: don’t read the book. And with good reason: it’s well-written, insightful, and definitely worth reading.

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By on September 20, 2010

This is a company that could not tell you, on any given day, within five hundred million dollars, how much cash it had… not only were they not prepared, but Rick Wagoner had very specifically said he didn’t want to prepare… frankly, it’s an irresponsible position [for a CEO to take].

What do you do when you’ve overseen a divisive bailout and an investment scandal all within the last year? Writing a book goes without saying, but it doesn’t hurt to bash on the executives you ousted while “Overhauling” the industry. That way, people who were (ahem) bearish on GM leading up to the bailout can at least be vindicated in their pessimism (and have the pleasure of imagining what might of happened if Ron Gettelfinger had been fired as Wagoner’s sacrificial lamb). In any case, that’s just what former auto bailout czar Steve Rattner has done in an interview with CBS News, and despite Rattner’s relentless striving to appear respectable and brave, it’s worth a watch. Especially in hindsight, pre-bankruptcy GM makes even Rattner look good.

By on September 3, 2010

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

The auto rescue remains one of the few actions taken by the administration that, at least in my opinion, can be pronounced an unambiguous success

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.

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By on June 2, 2010

Somewhere under a “Mission Accomplished” banner on an aircraft carrier, former car czar Steve Rattner is starting to get a bit lonely. Reuters reports that the Securities and Exchange Commission is seeking a three year ban on Rattner that would prevent him from working in the securities field. The ban stems from a recently-settled investigation into kickback allegations at Rattner’s former investment firm Quadrangle Group (involving a distribution deal for his brother’s low-budget movie “Chooch,” no less).

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By on June 1, 2010

We don’t need an aircraft carrier and “Mission Accomplished” banner, but isn’t it time to agree that the auto rescue has been a success?

Former auto czar-let Steve Rattner picks an unfortunate choice of metaphors to celebrate the possible success of the auto bailout in an op-ed for the Washington Post. Meanwhile, the latest Treasury estimates still show a projected $24.6b loss on the bailout, so yeah, let’s hold off on that carrier-based victory party.

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By on May 11, 2010

Auto bailout mastermind Steve Rattner knows a thing or two about the truth. Just ask his former financial firm, Quadrangle. So, when asked by the Detroit News what he thought of allegations that GM mislead consumers with its “Payback” ad, he pulled a classic out of the thesaurus. The General, said Rattner,

may have slightly elasticized the reality of things.

And this is a real Corvette that went through a special “elasticizing machine” in the factory at Bowling Green, right?

By on April 29, 2010

When former auto task force boss Steve Rattner’s former firm Quadrangle recently settled a “pay-to-play” corruption investigation, it threw Rattner under the bus, saying:

We wholly disavow the conduct engaged in by Steve Rattner, who hired the New York State Comptroller’s political consultant, Hank Morris, to arrange an investment from the New York State Common Retirement Fund. It is our understanding that Mr. Rattner also arranged a DVD distribution deal for a movie produced by the Chief Investment Officer’s brother in the middle of the investment decision-making process. That conduct was inappropriate, wrong, and unethical. Mr. Rattner is no longer with the firm and is not a part of today’s settlement. Quadrangle will fully cooperate in the Attorney General’s ongoing investigation of Mr. Rattner and others.

According to the DetN, that stinging indictment by Rattner’s former firm has inspired House Republicans to call for an investigation into whether Rattner was behind a deal in which some Delphi retirees lost their pensions while others didn’t.
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By on March 11, 2010

In a conversation with The WSJ [sub]‘s Paul Ingrassia, former Car Czar Steve “Chooch” Rattner did some “back-of-the-envelope calculation” to show why he believes the US taxpayers will see their $50b “investment” in GM recouped when The General goes public sometime in the next year.

Here’s how Rattner gets to his latest calculation: Bonds of GM’s bankruptcy estate – known as Motors Liquidation – are currently trading around 30 cents on the dollar, according to Thomson Reuters. Those bondholders were owed $27 billion.

As part of GM’s restructuring, those bondholders were promised a 10% stake in GM when it goes public. In very rough calculations, those bonds are currently valued at about $9 billion (because they currently trade at around 30 cents and were originally worth $27 billion).

Assuming that $9 billion represented 10% of GM if it went public now that would imply GM had a value of around $90 billion. The taxpayer’s stake: 60% of that $90 billion, or $54 billion — Rattner’s magic number.

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By on January 15, 2010

The $900,000 smile

A lot of what you hear about Steve Girsky sounds decidedly positive: an outspoken critic of GM, Girsky lasted less than a year as Rick Wagoner’s “roving aide-de-camp,” reportedly due to frustration with management heel-dragging. He even earned TTAC’s “lesser-of-two-evils” endorsement to be Presidential Car Czar over Steve “Chooch” Rattner. When he was appointed to be the UAW rep on GM’s board, representing the union’s VEBA trust which owns 17.5 percent of GM’s stock, he was lauded as someone who could keep his union allegiances at bay. But as special advisor to GM CEO/Chairman Ed Whitacre, Girsky had better be prioritizing GM’s best interests. Reuters reports that he’s being paid a cool $900k in stock grants for his advice. That’s in addition to $200k director’s salary and reimbursement for “living expenses and travel to and from Detroit.” Not bad considering the fuss people are making over compensation at TARP-recipient financial institutions.

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By on December 1, 2009

Recently, it’s become popular to believe that when a zombie loses its head, it dies. With today’s resignation of Fritz Henderson, the reanimated corpse of General Motors is testing that theory. Henderson was the latest in a line of GM lifers to hold the company’s reigns, hand-picked by ousted CEO Rick Wagoner and put in place by a presidential task force that couldn’t say no to another insider. In theory, Henderson’s resignation shouldn’t come as a surprise, let alone a disappointment. In practice though, the move leaves the zombie GM in a precarious position at a challenging moment. For the first time since (your guess here), GM is in the hands of an outsider.
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By on November 13, 2009

Birds of a feather?

We liked Fritz. We felt that Fritz had more energy and more drive and got the message that things had to change and was being groomed to be CEO and deserved a chance… He’s shown that he can manage. Whether he can fundamentally change the culture of the company is another matter.

Bloomberg’s fresh sound bite from former car czarlet Steve Rattner. Well, considering you left him in charge, Steve, he’d damn well better change the culture of the company. Otherwise it reflects just as badly on the restructuring task force as it does on GM, doesn’t it? Come to think of it, picking Fritz because he had “more drive” than Rick Wagoner wasn’t really a good setup for fundamental culture change, was it? You don’t hire Larry to move your piano because he’s “higher energy” than Moe. But it’s not Rattner’s fault: GM’s inability to change its culture comes from its inability to hire the professionals. Which means Ken “the pay czar” Feinberg and his ridiculous pay limits are really to blame.

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By on February 5, 2009

 

An increasing number of media reports are indicating that instead of a single “car czar,” Obama will appoint a team to oversee the auto industry turnaround effort. Current reports indicate that Democrat fundraiser Steve Rattner will likely take the top oversight position, but his total lack of (non-political) qualifications for the job is considered an issue. Which is where Stephen Girsky comes in. “They clearly need an adviser who knows the industry,” former Chrysler president Thomas Stallkamp tells Bloomberg. “Girsky certainly knows the industry, and he was close to both GM and the union.” And though I have questioned whether Girsky’s UAW affiliations are best described in the past or present tense, this 2004 presentation (PDF) to Original Equipment Suppliers Association is decidedly prescient. Especially for 2004. And this December 2008 presentation to UAW Local 14 seems to indicate that his recent advising stint with the UAW was a mission of truth and reconciliation rather than one of conniving and obfuscation.

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