From Reuters comes word that Car Czarlet Steven Rattner will be leaving the Presidential Task Force On Autos. The move “represents the start of a long-planned wind down of the autos panel” according to Reuters’ interpretation of an anonymous White House source. “With GM’s restructuring complete, Steven Rattner, whose leadership and vision were invaluable to the Auto Task Force’s efforts, has decided to transition back to private life and his family in New York City,” explains a statement from Treasury Secretary Timothy Geithner. “We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalize GMAC, and support the American auto industry. I hope that he takes another opportunity to bring his unique skills to government service in the future.” Unique skills? Is Rattner getting blown off or is this Mission Accomplished? A little of both?
“Because of the President’s commitment to this industry and the deep sacrifices of all stakeholders, GM and Chrysler have achieved a quick restructuring, and the economy avoided the devastation that would have accompanied their liquidation. Now, with day-to-day management of these companies in the hands of the private sector, the American taxpayers have a better chance of recouping their investment in these companies.”
Note Geithner’s use of the past tense. Commitment shown, unpopularity endured, is the White House backing out? Unfortunately, Geithner’s optimism carries shades of a certain carrier landing about it. Declaring victory won’t bring back GM and Chrysler’s sales. But what about Bob Lutz‘s desire for a permanent PTFOA (brought to you by the new CTS Coupe)? Expect Motown subsidies to keep coming, only without the explicit bailout lables attacahed.
Rattner’s replacement Ron Bloom never worked in the auto industry either but the Obama Administration assures us that as a kid he successfully managed a large Hot Wheels collection.
Maybe the UAW blew his ass out.
Rattner is no dope. It’s all downhill from here.
The Administration is backing away so that the inevitable failure of GM and Chrysler won’t drag them down. They may have “invested” monetary capital in GM and Chrysler but they’re not willing to invest any more political capital. That’s probably a good thing too, GM and Chrysler will have to succeed or fail on their own, as it should always be.
When the companies finally go Tango Uniform you can bet that the government will point to the bit where “day-to-day management of these companies in the hands of the private sector”
Would it be foolish to assume that this means no more ‘loans’ will be forthcoming to the UAW, I mean GM and Chrysler?
And there was never a problem with the auto industry again. Hooray!
The departure surprised some of his colleagues and came a week after the task force finished leading the two automakers into and out of rapid bankruptcy restructurings, along the way investing billions in government funds into the companies and their suppliers
Does he know something we don’t?
The first rat[tner] off the sinking ship.
Officeholders beware: sooner or later endless bailouts will cost you re-election.
Rattner was able to get all the parties to agree to bankruptcies in record time. Is this a failure? I would say not.
Whether you agree with Chapter 11 for GM and Chrysler or not; this guy had a job to do and he did it well.
I am happy that the court proceedings are over and I hope GM and Chrysler can be successful. If they fail again, (once there is an economic recovery) there will be no support from anyone to bail them out.
Does he know something we don’t?
He is possibly under investigation for some other stuff related to Quadrangle.
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/13/AR2009071302411.html
It was smart to let him go just in case the investigation has any implications.
People have to remember these are private equity managers. It’s as if the conservative press just discovered they existed and buy/manage/flip distressed companies.
The referenced article says the administration knew about the investigation into Quadrangle before Rattner joined the task force. Also, that he was not expected to be indicted. Sometimes there is no there there.
They don’t call it Government Motors for nothing.
To head up the task force, you can use traditional bureaucrats or folks from the capital side. They choose the way which should’ve made the anti-gov whiners pleased. Private equity is about as capitalist as it gets. People from that line of work also may come with this kind of baggage.
You can’t have it both ways.
One effective political tactic for defeating analysis and criticism involves keeping the ball moving. Rattner’s departure removes a focal point, thereby making it more difficult for public opinion to crystalize, and helping to stuff down the memory hole the Obama administration’s mugging of the bondholders and the illegal transfer of their property to the UAW. I expect that, at the PTFOA, the names and public faces will come and go. I give the PTFOA itself a few more months at most – and perhaps much less time. Then, as part of the Administration’s issue management strategy, it will be disbanded – and the ball will move again. The Administration’s meddling will continue, but be done anonymously in a smoke-filled room occupied by the same parties who call the shots now.
The future? Tens of billions more will be spent, but (in good ball-moving style) it will come in dribs and drabs, and be provided by different agencies. Money for re-tooling, “re-training” (to keep paid hours off the payroll), greenwashing (eco-friendly, energy-efficient auto plants), and a host of other shams for funneling money to the UAW. Estimates will be low-balled for the 6:00 PM news, and the real numbers hidden for years. The goal will be to make it difficult for the media to report a grand total. Then, when Government Motors fails (oops, I mean “transitions”) it will become part of a Grand National Industrial Strategy to Protect American Jobs. Windmills, LRT cars, you name it, and the UAW will be building it at taxpayer expense.
All of the above.
Rattner is leaving the sinking ship because of Quadrangle. An announcement that he goes home to his family instead of pursuing the usual other goals, is quite telling.
UAW having been paid off, they will back out of the bailout morass. Obama’s new girlfriend Angela Merkel probably told him that bailouts are unpopular in the Old Country as well …
administration’s mugging of the bondholders and the illegal transfer of their property to the UAW
That’s pretty funny because if taxpayers hadn’t paid, the bondholders would’ve gotten even less.
Everyone pay attention, this is the thanks we get for overpaying these SOB’s.
That’s pretty funny because if taxpayers hadn’t paid, the bondholders would’ve gotten even less.
Fact is, no one knows what the bondholders would’ve gotten in a normal bankruptcy, whether Chapter 11 or 7. The biggest loser in any bankruptcy would’ve been the union…ESPECIALLY Chapter 7.
The bailout from the bailout seems motivated by the political calendar. If the Obama kids learned one thing, its that these companies do nothing fast. If they keep to obvious a set of fingerprints onto this for six more months it will be too close to the election when it fails.
They kept re-working this thing in various ways, and they could tell from the polls no one was biting. Better to punch-out now than have Volt-egg all over the face, at least this way you can plan to blame somebody or something else. Obama will need cover when both these outfits (but especially GM) auger in off their subsidized dead-cat bounce (kinda like the stock market itself) by Election Day, 2010. Can’t be too much of a union whore on two fronts with Employee Free Choice this fall, too.
Obama’s new girlfriend Angela Merkel probably told him that bailouts are unpopular in the Old Country as well …
Bailouts are only “unpopular” when they go to the middle/lower classes instead of the usual upper echelon of wealth.
I mean, good God, people really think groups as unpopular as the UAW control public opinion in this country instead of the private media/corp cartels who spend massively to tell their audience what to think?
Almost as euphemistic as the dreaded Gardening Leave.
Speed dating now seems to be all the rage in this government/auto industry debacle…
If you cast your mind back about five months or so…
You’d remember that the PTFOA was formed by President Obama to fill the position of “Car Czar” — a position invented by George W. Bush when he extended the first round of auto industry loans last fall. The job of the Car Czar was to review the turnaround plans that GM and Chrysler were supposed to submit by March 31 of this year, and force bankruptcy by calling in the government loans if those plans were not good enough.
Events being what they were, the deadlines were extended a bit, the plans were perpetually not good enough, the loans never called in, and both car companies landed in bankruptcy anyway, picking up big extra doses of government money on the way.
But now that the original and subsequent government loans have been re-written in bankruptcy court as long-term stakes, there is no more role for a Car Czar. Sure, with a large, long-term stake in two car companies, the government should have a long-term staff to keep an eye on their investment. But that’s a different skill set than what’s needed for running a fast and big restructuring and bankruptcy proceeding.
It’s at least plausible, therefore, that they gave Rattner the boot because his services really aren’t required anymore. As well as the fact that he’s probably shady in all the typical private equity ways.
Taxpayers have a better CHANCE
of recouping their investment.
Hey Tim, it was an investment most taxpayers would have made if we had a fucking choice and we don’t want to take a chance on getting our money back. Take that hope, change and chance and shove it.
Until the PTFOA is completely dismantled and GM and Chrysler are off the government teat, it’s not over. It’s gone too far now, if it fails then Obama looks bad, so they must continue to support it. So GM and Chrysler can either become profitable and pay us back (don’t hold your breath), they can fail and take our dough with them (possibly tarnishing Obama’s image), or our nation can go bankrupt trying to prop them up. I’m rather scared of the last scenario because I don’t have much faith in either of the others. Detroit is now a giant sinkhole into which the government just heaps more and more of our money in the name of “saving jobs”.
The UAW doesn’t have to control public opinion. They just have to hope that politicians sympathetic to their case get elected to the right offices, and that is what happened in November 2008, regardless of what Fox News and Rush Limbaugh said or did.
From what I’ve heard and read – contrary to the fears of some posters – President Obama is not interested in running the domestic auto industry, and isn’t too happy that the troubles of GM and Chrysler have consumed so much of his administration’s time and effort. He certainly didn’t CAUSE the collapse of GM and Chrysler – blame management and Daimler, respectively, for that – but the longer this drags on, the more his administration “owns” it.
The goal therefore is to get these companies married off to other companies pronto. That gives the government a relatively easy exit. They’ve already done this with Chrysler, and I wouldn’t be surprised if a search for suitors interested in GM has been underway for a long time.
The only problem is that the GM desperately needs a suitor with deep pockets, but it’s like trying to marry off Rosie O’Donnell when the suitors are holding out for Charlize Theron…
Rattner learned it from GM management:
Move on to your next job before the results of your actions catch up to you.
“Great job on that new Pontiac Aztec! It’s not at the dealers yet, but you are being promoted today.”
Agenthex: Bailouts are only “unpopular” when they go to the middle/lower classes instead of the usual upper echelon of wealth.
Some of us are against all of the bailouts and corporate welfare, regardless of “social costs.” These costs cannot be eliminated, only deferred, redirected and magnified via government interference. It is generally better to absorb losses/costs as soon as they are identified, beginning recovery straight away. Truly, does anyone think this is over? Or that the inevitable failures will be pain-free?
The UAW doesn’t have to control public opinion. They just have to hope that politicians sympathetic to their case get elected to the right offices, and that is what happened in November 2008, regardless of what Fox News and Rush Limbaugh said or did.
Heaven forbid one weakening organization that represents working people gets to lobby and potentially influence politics, or even vote. It’s not as if the general effects of a sudden collapse of industry is totally unknown to wingers’ leadership, so you get to pick the reasons why they conveniently choose to ignore it. That last bit about fox is quite hilarious, as if those ideologues ever contribute anything positive to humanity.
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Some of us are against all of the bailouts and corporate welfare, regardless of “social costs.” These costs cannot be eliminated, only deferred, redirected and magnified via government interference.
The little people aren’t informed of and therefore generally don’t know about welfare for the wealthy, so it doesn’t matter what they think, as if they’re even capable of such. They’re only “informed” whenever money unfortunately gets diverted to the non-wealthy instead, and are instructed to be angry about it.
Bailouts are a bad idea regardless of who gets the money. What’s so hard to understand about this?
As others have said, the whole “saving jobs” canard was a weak argument out of the gates used to placate the UAW. Obama could have and should have been more honest about why it was done… to prevent further erosion of confidence in the economy and for supporting a state which supported him in the election.
Bailouts are a bad idea regardless of who gets the money.
If only the world were a much simpler place without those damn capitalists who build a house of cards unaccountable by any reasonable standards of conduct.
You are absolutely right, but not only do we need to stop giving these guys about 95%+ of the bailout money but also string them all up as an warning to others. Who’s with me?
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and for supporting a state which supported him in the election.
Given how massively unpopular the UAW is in swing states, and how easily people fall for that anti-labor claptrap, how is that a good deal politically?
However I would agree that he should stop sending fed money to the bitchy backwards states that didn’t support him.
agenthex: Heaven forbid one weakening organization that represents working people gets to lobby and potentially influence politics, or even vote.
You’re original point was that no one listens to the UAW, because it is supposedly unpopular, which meant that it could not possibly have any effect on public policy. Here it is, for your convenience:
I mean, good God, people really think groups as unpopular as the UAW control public opinion in this country instead of the private media/corp cartels who spend massively to tell their audience what to think?
Now, you are at least admitting that the UAW doesn’t have to be popular with the public to have policies enacted that are beneficial to it, as long as elected officials are willing to do so.
Thank you for admitting my point.
agenthex: It’s not as if the general effects of a sudden collapse of industry is totally unknown to wingers’ leadership, so you get to pick the reasons why they conveniently choose to ignore it.
Another irrelevant point. Companies go out of business all the time; we would still have a viable auto industry without GM and Chrysler. It’s usually better when the “wingers” and everybody else ignore it.
If you are that concerned about GM and Chrysler, then drive down to your local dealer and buy one of their vehicles at full sticker.
Have your friends and family do the same.
If not enough other people are willing to do this to keep said companies in business, you, along with their executives, workers and supporters would do well to take the hint.
agenthex: The little people aren’t informed of and therefore generally don’t know about welfare for the wealthy, so it doesn’t matter what they think, as if they’re even capable of such.
You obviously don’t know too many “little people.”
agenthex: You are absolutely right, but not only do we need to stop giving these guys about 95%+ of the bailout money but also string them all up as an warning to others. Who’s with me?
Generally, just letting them go out of business is much more effective.
Now, you are at least admitting that the UAW doesn’t have to be popular with the public to have policies enacted that are beneficial to it, as long as elected officials are willing to do so.
Getting influence in political circles we can lobbying. Is the UAW influential in lobbying? Perhaps somewhat, in large part because their members vote. That’s what correctly happens in a democracy, officials are accountable to voter’s interests.
What is not in the interest of democratic ideals is lobbying that is not done for (and often against) the sake of voters. A nod to the jingoists, America is really the best at this. The UAW has little to do with the average citizen, yet gets to be a convenient rallying point for media consumers without too many things in their head.
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Another irrelevant point. Companies go out of business all the time; we would still have a viable auto industry without GM and Chrysler. It’s usually better when the “wingers” and everybody else ignore it.
It’s understandable that economic rubes can’t intuitively grasp external costs, but it’s not too high of a bar to understand toxic waste when the same points have been presented repeated in prior posts/comments.
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Generally, just letting them go out of business is much more effective.
Tell that to the banks, and a variety of other large interests that your mental owners are subservient to.
It’s really quite unfortunate that the world is not as simple as can be explained with “labor (that is not affiliated with my masters) = bad”, “private industry (that funds my ideologues) = good”.
If you take a look at relatively simple stuff like how the massive amounts of CDO’s are re-traunched, the costs are hardly even linear. The proper discussion to have is to think of “bailouts” like all spending and consider the hit to the banks and larger economy from defaulted consumer/mortgage debt and value of civil society, instead of exaggerating the role of minor players like the UAW because a proper alternative is not convenient.
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You obviously don’t know too many “little people.”
Very very few in our society think thoughts outside the realm of the worldview presented in media. That’s rather the point of saturation.