Three Bailout Kingpins Make Good in the Private Sector
Four years ago, unprecedented government bailouts of banks, insurers, and automakers prevented a U.S. economic collapse. For some of the men tapped by Uncle Sam to manage these rescue jobs, government service has paid off. Restructuring experts Jim Millstein, Harry Wilson, and Ron Bloom, who served on the Treasury Department-led overhauls of American International Group, General Motors, and Chrysler Group, have found that public service raised their profiles as they returned to the private sector. Today they’re busy with everything from merging airlines to salvaging postal worker pensions to turning around Yahoo!
A lawyer-turned-banker who’d worked at Lazard Frères for a decade, Millstein was named the U.S. Treasury’s chief restructuring officer in 2009 and assigned to oversee financial industry bailouts, focusing on AIG. When he left government last year, the lifelong New Yorker stayed in Washington, D.C., and started his own restructuring advisory and investing firm, Millstein & Co. He’s hired 25 professionals, including five transplants from Treasury’s Troubled Asset Relief Program, or TARP. The hiring process involved so many meals that he put on 10 pounds, he jokes.
The firm is advising US Airways Group on its efforts to merge with American Airlines, and has a joint venture with Third Avenue Management to pursue distressed investments.“I now have relationships with the executive suite of the largest banks and insurance companies, the people who needed help from TARP,” says Millstein, 57. “I didn’t have that in the past.” His front-row seat during the financial crisis often works as a conversation starter with potential clients. “I’m a little bit of a curiosity piece, there’s a little bit of ‘You were there, tell us how it was’—it’s a little bit like Survivor,” he says. “That will wear off.”
Wilson didn’t spend much more time at Treasury than a summer intern—he landed in the spring of 2009 and left in August. Even so, his involvement in restructuring GM allowed him to open his own firm in January 2011, and turn his attention to Greece, New York State, and the International Brotherhood of Teamsters. “We helped save an American icon and transformed it into something that can be successful for years to come,” he says of his work on GM. “That feeling of accomplishment was certainly my professional pinnacle.”
Now Wilson, 40, aspires to position his own firm, Maeva Group, as “the Navy Seals of the restructuring world,” tackling complicated problems where he thinks he can make a real difference. The firm also is starting a municipal advisory practice. The GM bailout “raised my profile,” says Wilson, and called on skills he’d honed for almost 20 years at private equity firms including Blackstone Group and Silver Point Capital. His work on GM’s union issues during the rescue led to a call from the Teamsters asking for his help in restructuring trucking giant YRC Worldwide. “They heard about us through friends at the White House,” he says. He now sits on the boards of YRC, auto supplier Visteon, and Yahoo, where he helped fellow directors select new CEO Marissa Mayer.
In July, Wilson traveled to Athens at the invitation of newly elected Prime Minister Antonis Samaras and his cabinet, after he and several other prominent foreigners of Greek heritage—Wilson’s grandfather changed the family name from Dedousis when he came to the U.S.—offered assistance. Over five days, they offered free advice on fixing the economy and talked frankly with the heads of state-owned enterprises grappling with the reality of being sold to save the country.
Between restructuring gigs, Republican Wilson ran for New York state comptroller, losing narrowly to incumbent Democrat Thomas DiNapoli. Wilson says he might run for public office again, “if there was a problem I thought I could fix.”
After his efforts on Chrysler’s restructuring and GM’s initial public offering, Bloom continued his government service by working with the White House to develop the auto-fuel economy standards that passed last month. He also served as assistant to the president for manufacturing policy. The government experience and contacts may prove useful now that he has returned to his early employer Lazard. “I do think that my time in government can help to open that door a little bit,” says Bloom, 57. He’s been involved in helping manufacturing companies restructure since he graduated from college, he says, and “here was the kind of granddaddy of all those things. Not only was it a big, complicated deal, but it really mattered.”
Bloom, who worked at Lazard from 1985 to 1990 after finishing business school, returned to the firm this year as vice chairman of U.S. investment banking. The bank is a good fit because it welcomes “unconventional” backgrounds such as his, Bloom says.
Bloom was serving as special assistant to the president of the United Steelworkers union, focusing on corporate restructurings and mergers, when he volunteered to work on Detroit’s auto restructuring. He had only a few days’ notice to begin his assignment. He packed a bag and bought a suit—something he hadn’t needed for the Steelworkers job. For more than two years he commuted from his family home in Pittsburgh to Washington and Detroit. In the auto bailouts, he found himself in the unusual situation of negotiating wage and job cuts across the table from his United Auto Workers friends. He expects that experience to help him as he tackles current assignments, including advising mail carriers amid the U.S. Postal Service’s restructuring. “People of different objectives need to find a common language and a common way to work together,” he says. “The fact that I’ve been on all different sides of these tables is helpful.”