Steven Rattner, the so-called "car czar" who steered the takeover and bailout of
General Motors and Chrysler, has spilled the juicy details about the
deal in a long article for Fortune. Rattner's account is seen as an attempt to justify the $50
billion government "investment" in the carmakers, which has reportedly bled $20 billion in value.
But few pundits are changing their minds. Longtime critics of Rattner--a former reporter and financier who had no experience in the auto industry--are turning the barrel right back on him, while opponents of the bailout aren't appeased. What's clear to everyone is that dysfunction in Detroit was rampant. Here are the best takeaways:
- GM CEO Was Far Worse Than Imagined, says Noam Scheiber in The New Republic. He cites Rattner's account of the top-floor executive suite at the GM headquarters, which was locked and guarded under ousted CEO Rick Wagoner. He raises further doubts about his replacement, another GM insider Fritz Henderson: "The question is whether Wagoner's successor, Fritz Henderson, is really up to the job of changing GM's culture. He was, of course, part of the same management team that made a habit of shuttling directly from the executive suite to the garage and back. (No word on whether or not that's changed.) Also, you get the impression from Rattner's account and others that the auto task force would have liked to hire an outsider, but thought there was a limit to the amount of change the company could withstand."
- Takeover Team Never Understood Auto Industry, says Marcy Wheeler at Emptywheel. "Of course the government had a right to ask Rick Wagoner to step down. Of course it made sense to ask for the resignation of a failed CEO sucking at the federal teat. What didn't make sense, of course, is that similar demands were never made on Rattner's own industry, the finance industry, when it not only sucked far more federal dollars but laid the final straw that broke the auto industry's back...just as much it is a testament to the ignorance of the banksters-not only about the real economy, but of how their own management is just as horrible and arrogant as that of the auto industry."
- Shows Wisdom of Neglecting Requests of Creditors for Money, says Felix Salmon at Reuters. "Rattner's job was to create a viable company, not to maximize recovery for bondholders. If those creditors wanted to put their own new money into Chrysler, and run it themselves, they were more than welcome to. But even the government came very close to simply letting Chrysler fail, until it worked out the magnitude of the knock-on effects on jobs at dealers and suppliers. No one else would put a penny in, and the fact that TARP money was found for the automakers meant that hundreds of thousands of jobs, and billions of dollars, were saved. The creditors really were lucky to get what they got."
- Rattner Glossed Over $20 Billion Loss, says Michael Corkery at the Wall Street Journal. "Poof! Government has already lost $20 billion on GM investment," runs the headline. Corkery said the real heart of Corkery's revelations is the massive loss he attempted to gloss over. "In the newspaper business, reporters are often admonished not to 'bury the lead.' That's another way of saying don't take too long to get to the most newsworthy point of the article."
- Justification Not Persuasive, sniffs the Economist. The anonymous writer continues to doubt Rattner's belief that "American ownership is somehow an important factor and that resources idled by closures at GM and Chrysler wouldn't be put to use by other carmakers." The writer then warns that it may be hard to untangle from autocompanies when we want to, because "if GM and Chrysler fail to turn the corner six months or a year down the road, it will be very tempting to leaders in Washington to increase support--or protection--for the firms." The writer concludes that "the need to help workers never had to mean a move to help these specific firms, but that is how it played out. Having acted thusly, the government should use the recovering economy as cover to extricate itself, and let the chips fall where they may."