Auto Industry Task Force chief Steve Rattner quit his post at the Treasury Department after just five months on the job. But what he lacks in tenure in the government post will be far overshadowed by what he got done. Rattner led the lightning quick remake of the American auto industry.
Whether industry watchers like or hate the tactics (Rattner used government sponsored bankruptcy to wipe out creditors and remake the balance sheets of both General Motors and Chrysler) he did spearhead an effort that saved two of America’s Big Three carmakers and countless parts companies from falling into liquidation. Both companies emerged from bankruptcy with less-costly union obligations, far less debt, but also owned by the government and United Auto Workers.
Chrysler lives to fight another day and GM, at least, has a real shot at survival. Once the world’s biggest carmaker, GM is now much smaller. But it can focus on four brands instead of eight. And the company dropped its debt from more than $70 billion to about $17 billion. The leadership team that controlled GM when it was headed into bankruptcy is turning over. Former Chairman and CEO Rick Wagoner was controversially ousted in part by Rattner. Now, new Chairman Ed Whitacre is in to make sure CEO Fritz Henderson will make the right moves.
That job, too, will rest on the shoulders of Ron Bloom, a former United Steelworkers negotiator who was Rattner’s No. 2. He takes over the task force. Though much heavy lifting has been done, the job is far from over. Bloom will have to make sure GM and Chrysler are making good progress and don’t squander tens of billions in taxpayer money. If Chrysler’s tie-up with Fiat doesn’t bear fruit, or if the car market worsens, he will play a big role in decided what to do next.
At a minimum, the two companies will have new leadership teams watched closely by Bloom and other task force members. Chryler’s top two executives, former CEO Robert Nardelli and Co-President Tom LaSorda have left. Fiat CEO Sergio Marchionne and his team have taken over. While GM lifer Henderson is running the company, he will likely be brooming a number of long-time company managers in the coming months.
Rattner may have overseen the remake of the U.S. auto industry. Bloom will have to watch closely as the two carmakers attempt to stabilize themselves. His job will be to work with the new boards whose directors must make sure the companies are fixed. And if consumers don’t embrace GM and Chrysler, the government may yet have more heavy lifting to do.