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Posts Tagged ‘auto czar’

Auto Bailouts “Unambiguous Success” Despite $14 Bil Cost, Argues Rattner

Losses could narrow if GM stock regains momentum.

by on Dec.16, 2011

Former auto czar Steve Rattner.

The federal bailouts of General Motors and Chrysler were a collectively “unambiguous success,” according to the man who helped pulled the deals together – despite the likely $14 billion bill to U.S. taxpayers.

Moving fast was critical, and despite claims that it would have been easier to just let the makers go into bankruptcy on their own, former U.S. auto czar Steven Rattner told The Detroit Economic Club there was no option but to have the federal government step in considering the economy had fallen into its worst downturn since the Great Depression.

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White House officials, up to and including President Barack Obama, have suggested that the bailouts ultimately saved anywhere from 500,000 to as many as 1 million U.S. jobs and prevented the economy from going into a full-fledged depression.

“It’s unambiguous that it was a success,” said Rattner, who detailed the effort to save the two makers in his book, “Overhaul.”

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Car Czar Bloom Leaving White House

Helped oversee auto bailout, new fuel economy mandates.

by on Aug.11, 2011

Fiat/Chrysler CEO Sergio Marchionne talks with White House auto czar Ron Bloom in May.

One of the key figures in the bailouts that saved Chrysler and General Motors – and a driving force behind the compromise that will nearly double U.S. automotive fuel economy standards – is leaving his post at the White House.

Former investment banker Ron Bloom will leave his post as the senior automotive advisor to President Barrack Obama by the end of the month, though it does not appear he has lined up a new job, according to White House sources.

Bloom was the nation’s “car czar” until earlier this year when Congress pulled the budget for his post, but he remained the top auto advisor to the president, officially in the role of Assistant to the President for Manufacturing Policy.

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The 56-year-old originally joined the new administration in February 2009, just weeks after Obama took office and had to address the rapidly-failing fortunes of Detroit’s auto industry.  Bloom first served as assistant to the first White House auto czar, Steve Rattner, but Bloom took over the top spot after that former banker and one-time journalist left Washington following the emergence of Chrysler and GM from bankruptcy.

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Former Auto Czar Rattner Settles Influence-Peddling Case

Rattner fined $10 million.

by on Dec.31, 2010

Former auto czar Steve Rattner settles in a pay-for-play scandal, which will result in a $10 million fine.

Former auto czar Steven Rattner has agreed to pay a $10 million fine to settle a “pay-to-play” case that claimed the one-time reporter had handed out kickbacks in order to steer $150 million in New York State pension fund business to his Wall Street firm.

The settlement, approved by NY Attorney General – and Governor-elect – Andrew Cuomo also bars Rattner from having any dealing with any public New York pension fund for five years.  But the former NY Times journalist still scored a victory.  Cuomo had originally hoped to force Rattner to pay a $26 million fine and to bar him for life from working anywhere in the securities industry.

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Rattner, who is worth a minimum of $188 million according to knowledgeable sources, served as the Obama Administration’s first “auto czar,” helping put in place the bailout of, among others, General Motors and Chrysler, in early 2009.  But shortly after leaving the government he became enmeshed in an ongoing scandal involving the illegal efforts by various private equity firms to gain lucrative pension fund business.

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Has GM Set Nov. 17th As Date For IPO?

Former “Car Czar” leaks plan.

by on Oct.25, 2010

Former auto czar Steve Rattner's settlement of a pay-to-play scandal is on hold.

The timing of General Motors Corp.’s initial public offering of stock has been a closely guarded, if eagerly-anticipated, secret.

But while GM officials have adamantly refused to discuss the time line for the IPO, former U.S. “auto czar” Steven Rattner may have given it away during an interview on the PBS interview program, the Charlie Rose Show.

While talking about his new book, “Overhaul,” Rattner told the host that the IPO was scheduled for November 17. So far, no one has come forward to support Rattner’s assertion but it appears to fit with the time line GM has established. GM’s current management is eager to shed the “Government Motors” tag as quickly as possible.

The Detroit Economic Club has withdrawn the invitation it had extended to former auto czar Rattner, who was previously scheduled to appear before the business group at a meeting in downtown Detroit next week.  But DEC President, Beth Chappel, has canceled the invitation, DEC officials confirmed Tuesday.

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“I am very sorry to inform you that we must cancel Mr. Rattner’s appearance at the Detroit Economic Club next Tuesday, October 26th.” Chappel said in an e-mail to DEC members. “We do not believe it is appropriate to proceed with this meeting, given the recent settlement between Mr. Rattner and the U.S. Securities and Exchange Commission,” Chappel said.

The DEC is one of the most prestigious public speaking venues for presidents, foreign leaders, leading American politicians and top business executives over the years.

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Former Auto Czar’s Pay-To-Play Case On Hold

Settlement delayed.

by on Oct.15, 2010

Former auto czar Steve Rattner's settlement of a pay-to-play scandal is on hold.

The Securities and Exchange Commission has postponed – temporarily – a vote to approve a preliminary settlement with Steven Rattner, the Obama administration’s former “auto czar” who was instrumental in re-shaping Detroit through a massive bailout of bankrupt makers General Motors and Chrysler.

Since leaving Washington in the summer of 2009, Rattner has been swept up in a “pay-to-play” scandal involving New York State’s public pension fund.  The SEC has been working on a settlement, but the financier remains under investigation by New York Attorney General Andrew Cuomo.

Under the proposed deal with the federal government, Rattner would pay $6 million and accept a two-year ban from the financial industry, according to The New York Times, where Rattner once worked as a reporter before launching a second career as a financier.

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Such a settlement with the SEC would effectively end the 58-year-old Rattner’s career as a financier and make it doubtful he would ever hold a top political office.

It is unclear why the SEC settlement hearing was postponed, and the agency has not set a subsequent date.  It is also uncertain whether a settlement deal might be in jeopardy due to the Cuomo investigation, which would not necessarily be impacted by a settlement between Rattner and the federal government.

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Creaking Auto Supply Chain Ready for “Implosion”

As many as 500 suppliers may need to go to avert catastrophe.

by on Mar.12, 2009

As many 500 of the 1,700 automotive suppliers could fail in 30 to 90 days, an "implosion" that could bring assembly lines to a standstill.

As many 500 of the 1,700 automotive suppliers could fail in 30 to 90 days, an "implosion" that could bring assembly lines to a standstill.

Nearly a third of the automotive industry’s suppliers could be forced to consolidate – or to go out of business entirely.  Without this shake-up, says a leading specialist in corporate restructuring, the entire supply chain could collapse, bringing automotive production to a screeching halt.

The crisis on the parts manufacturing side of the business is even more severe than what has happened on the auto assembly side, says Laura Marcero, a partner with Grant Thornton LLP, even considering the potential collapse of both General Motors Corp. and Chrysler LLC.

“We believe 30 to 40 percent of all suppliers are at high risk…and must come out of the base,” Marcero declared during a meeting of the Automotive Press Association, on Thursday.”

Suppliers have largely run out of cash, Marcero noted, as their customers – carmakers like GM, Toyota and Mercedes-Benz — have been forced to slow their assembly lines and curtail parts purchasing.  Making matters worse, banks and lenders have clamped shut supplier credit lines.

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Turnaround Taking Hold, General Motors Tells Feds “Never Mind”

Automaker says it no longer needs $2 bil to meet March bills.

by on Mar.12, 2009

GM CFO Ray Young: No need for $2 billion in federal aid this month.

General Motors CFO Ray Young: No need for $2 billion in federal aid this month.

In a stunning surprise, General Motors is telling the Obama Administration it won’t need an additional $2 billion in federal aid, this month, because its restructuring program is beginning to take hold.

What remains unclear is whether GM is simply hoping to delay the next bailout package or will no longer need it, reducing the overall size of the aid package required to keep the automaker going.

“It seems like our company-wide cost reduction efforts are moving well, as well as we’ve been able to defer spending that we previously anticipated in January and February,” Chief Financial Officer Ray Young told the Associated Press. “I think that’s a positive development.”

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