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F-Bombs, Vanishing Billions Spice Rattner’s Inside Tale: Review
The F-word is an epithet White House Chief of Staff Rahm Emanuel uses a hundred times a day, but it is extremely indiscreet to hurl it at the United Auto Workers, a sacred cow among the Democratic deities.
That’s the one juicy revelation in Rattner’s “Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry” that the White House is especially anxious to tamp down. UAW President Bob King has already sent out an e-mail calling the account “baloney.” Of course, he wasn’t there.
While there have been other books about the Obama administration, this is the first from the inside and it is full of glimpses behind the curtain that we usually have to wait four years to see. The president is as smart as any chief executive officer he has encountered, writes Rattner, co-founder of private-equity firm Quadrangle Group LLC. He is conversant on the whole range of auto-industry issues, right down to the liquidity of the supply chain, but he has his blind spots.
Corolla or Prius
Obama blew the chance to save billions of dollars by declining the Bush administration’s offer to link arms on the auto-industry task force during the transition, preferring to stick by his pronouncement of “one president at a time.” He reverts to the liberal’s love of all things foreign when he asks sadly why U.S. manufacturers couldn’t just produce a car as good as a Corolla (if he were on top of things he’d be asking about the Prius).
And Rattner shows that you can take the man out of Chicago but you can’t take the community organizer out of the man when Obama blanches at the millions he is going to have to give General Motors Co. CEO Rick Wagoner to walk away from the company he wrecked.
When Rattner seats Wagoner on his fake-leather couch to tell him it’s all over, the generally impassive Wagoner fires off two shots. He wants his union counterpart, then-UAW President Ron Gettelfinger, to be fired as well. And Wagoner warns Rattner not to replace him with someone outside the industry or risk getting a know-nothing. When Ford did that, their new and now much celebrated CEO Alan Mullaly had to call Wagoner everyday for help, apparently unable to tell a piston from a crankshaft.
The best parts of “Overhaul” are the vivid pictures Rattner paints of the economic team. Treasury Secretary Timothy Geithner and National Economic Adviser Lawrence Summers, Geithner as the inside man to Summers’s outside one, work smoothly together and are as well-matched in the West Wing as they are on the tennis court.
They make the oddest of couples: Geithner, the exceedingly smart, well-organized technocrat, a “man of few words ... given to occasional bursts of profanity and odd fits of giggling,” is a workaholic, gym rat and weekend chef. When he learns that the Senate Finance Committee has found problems with his taxes, he continues calmly eating his tuna wrap. Maybe he knew the White House needed him more than they needed a tax virgin.
Now take Summers: From the spots on his tie where he has dribbled the Diet Cokes he constantly drinks to being “habitually late, chronically disorganized,” he is Geithner’s opposite, a brilliant man of many words and not the least bit trim. He often got so immersed in chewing over the restructuring of GM that he would have to be pulled to his next meeting.
Rattner notes that Summers had softened his rough edges since the searing experience of having to leave the presidency of Harvard University, but still liked to return serves close to the line. You can be sure that any leak coming from the financial team is not from Geithner.
Before Rattner had a chance to inform his investors and 85 colleagues at Quadrangle about taking the job as head of Obama’s Automotive Task Force, Senator Charles Schumer, a New York Democrat, congratulated him, and Rattner asked how he’d found out. “From Larry,” was the reply. When Rattner complained to Summers, Summers coolly wondered “whether the problem had arisen from ‘your end or our end.’”
The book becomes a thriller halfway through as the administration considers nationalizing the banks to stabilize the economy and Obama’s advisers are split on what to do about the stressed-out auto companies. Summers wanted the rescue to proceed; Austan Goolsbee, a White House economic adviser, and Deputy Secretary Alan Krueger did not.
Meanwhile, James B. Lee Jr., a vice chairman at JPMorgan Chase & Co. who led negotiations with the Treasury on behalf of Chrysler Group LLC bank-debt holders, was still insisting on 100 cents on the dollar for the debt. Issues with Fiat SpA, which would eventually take a stake in the carmaker and help bring it out of bankruptcy, were still unresolved. None of the due diligence that Rattner, as a private equity investor, would have done had been done on investing in Chrysler.
At one of the final meetings to discuss Chrysler’s fate, Obama stops Summers from giving a long disquisition on his choices, telling him he’d read the memo Summers sent. Obama then asks the thoughtful, loquacious Goolsbee, the Chicago economist who’d been with Obama since the campaign, to weigh in with his reasons for dissenting. In the hall afterward, Summers who doesn’t like to give up the floor or be disagreed with, explodes, “You do not relitigate in front of the president!”
What with the onerous vetting for the post of car czar (it cost Rattner $400,000 in legal and accounting fees), too small staff for the task, and often waiting in the freezing cold at the guard gate to get cleared without an official pass (he worked six weeks before getting sworn in by two Human Resources workers in a vacant office with a flag), Rattner considered packing it in. Summers’s uncharacteristic sentiment won the day, telling him that he could get along without the job but that the job really needed him.
Subject of an investigation by the Securities and Exchange Commission, Rattner didn’t get the job of his dreams but he did a job that even Republicans grudgingly praise. At the end of the process, Rattner returns to Manhattan, writing that he had ended up building a structure that resembles a Volt not an Impala. But as the fastest work government has ever done, it is really the latter.
“Overhaul” is from Houghton Mifflin Harcourt and will be published on Oct. 14. This review is based on a pre-publication, nonfinal copy of the book.
(Margaret Carlson, author of “Anyone Can Grow Up: How George Bush and I Made It to the White House” and former White House correspondent for Time magazine, is a Bloomberg News columnist. The opinions expressed are her own.)
To contact the writer of this review: Margaret Carlson in Washington at email@example.com