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New Film Reveals the Reality of the Auto Bailout

“Live Another Day” – but at what cost?

by on Sep.12, 2016

Storm clouds over Detroit. At the depth of the recession, two of the three US makers went bankrupt.

The economy was collapsing more rapidly than during the Great Depression, and nowhere was that more apparent than in Detroit, where the Big Three automakers faced the very real prospect of going out of business – destroying a million or more jobs in the process.

Ford Motor Co. was able to survive by mortgaging everything; not only its factories, but even its Blue Oval logo. General Motors and Chrysler didn’t move fast enough to secure equity lines. They had to be salvaged with the help of the largest federally funded bailout in history. It broke precedent and, many would argue, broke the law. The rescue effort may also have saved the economy, according to its proponents.

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Was it good or bad? “It was something in-between,” contends Bill Burke, suggests Bill Burke. He’s a media industry veteran and co-producer of the new documentary, “Live Another Day,” which has received strong praise on the film festival circuit and which will open at theaters nationwide on September 16th.

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Chrysler Operating Earnings Could Near $2 Billion

Maker likely to report first annual net profit since 1997.

by on Jan.30, 2012

A reason to smile for Chrysler CEO Marchionne?

Borrowing the title of a ‘60s-era counterculture novel, Chrysler executives might say, “Been down so long it looks like up to me,” especially if preliminary estimates hold true on Wednesday.  That’s when the long-troubled U.S. maker plans to report its fourth quarter and full 2011 financial figures which – analysts anticipate – could see as much as $2 billion in full-year operating profits.

That would mark the first time Chrysler will have gone into the black for the full year, on an operating basis, since 1997, just before its ill-fated “merger-of-equals” with German’s Daimler AG.  Significantly, the announcement of any full-year profit would come as a stark contrast to the situation the maker found itself in less than three years ago, when it was forced to file for Chapter 11 bankruptcy protection.

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On a net basis, the maker went $42 million into the red for the first nine months of 2011 – but that figure includes $551 million in second-quarter charges resulting from CEO Sergio Marchionne’s decision to pay off Chrysler’s federal bailout loans years ahead of schedule.  Even with those charges, the smallest of the Detroit makers is expected to land in the black for the full year.

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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 Car Czar Will Testify About Abandoned Delphi Pensions

About 70,000 Delphi employees lost retirement plans under bankruptcy.

by on Jun.21, 2011

Former auto czar Ron Bloom will be facing some tough questioning on the GM bailout and Delphi bankruptcy.

Former White House “Car Czar” Ron Bloom will be one of those called to testify in what could be an angry Congressional session looking into the long-term impact of the General Motors bailout.

Among other things, lawmakers are expected to focus on the decision to abandon the pension program run by Delphi, GM’s former parts subsidiary.  Delphi, which underwent the longest corporate bankruptcy in U.S. history, walked away from a program that covered about 70,000 retirees.  Some have lost as much as 65% of their benefits.

Among others called to testify will be Vince Snowbarger, the deputy director of the Pension Benefit Guaranty Corp., the agency created to assume control of failed pension programs.  Delphi’s pension program was underfunded by $7 billion, and the PBGC will cover $6.1 billion of that – making it the second-largest failed pension program ever assumed by the agency.

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While Delphi did not receive a direct federal bailout, its survival – and eventual emergence from Chapter 11 – depended on its ongoing relationship with GM.  That was enough to bring it under the umbrella of the House Oversight and Government Reform Committee, which will be holding a Wednesday hearing titled, “Lasting Implications of the General Motors Bailout.”

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Chrysler Celebrates “Second Chance”

Despite skeptics, maker “dared to dream big,” pays off $7.5 billion in federal loans.

by on May.24, 2011

It's "the end of the beginning," said Marchionne, after announcing Chrysler had completely paid off its government loans.

Despite the “skeptical and patronizing looks” of those who placed a “death sentence on our company,” Chrysler CEO Sergio Marchionne suggested the automaker has proved it is both a viable and competitive player in the global auto industry.

The executive, who also runs Chrysler’s Italian partner, Fiat SpA, tried to maintain a low-key tone Tuesday as he announced the long-troubled American automaker had officially paid back the $7.5 billion it owed the U.S. and Canadian treasuries – six years earlier than it was required to under the terms of the bailout it received in 2009.

But speaking to an overflow audience of reporters, workers and dignitaries at the Sterling Heights Assembly Plant, in suburban Detroit, it was obvious that Marchionne wanted the event viewed as a critical transition point for Chrysler.

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The Canadian-educated executive heaped plenty of praise on the White House, and particularly President Barack Obama, who decided to offer Chrysler a bailout despite significant opposition within his administration.

“We were encouraged by the fact that someone believed in us,” said Marchionne, adding “it happens rarely in life you’re given a second chance.”

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Bye-Bye Car Czar

Post among many impacting auto industry cut by federal budget compromise.

by on Apr.12, 2011

The last and former car czar Ron Bloom.

The last-minute budget compromise that kept the federal government going will take its toll on the auto industry – among other things eliminating the “car czar” position that helped the White House manage the 2009 bailouts of General Motors and Chrysler.

The bipartisan budget agreement also will trim $408 million from the $2.3 billion originally set aside to help promote research on high-mileage technology, along with another $37 million earmarked to promote seatbelt usage.

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There are actually four different “czar” posts being defunded.  And the one overseeing the auto bailouts, held most recently by Ron Bloom, has been empty since he left the White House last February.  It was originally intended to give oversight to bailouts that included $50 billion needed to keep General Motors in business.

While the elimination of that position might not draw too many tears in Detroit the industry is clearly less pleased to see the government take a sharp knife to a program that is helping fund the high-cost development of advanced powertrain systems.  Funds have so far been dispersed to a wide range of manufacturers, domestic and foreign, as well as to start-up makers, including battery car manufacturer Tesla Motors and Fisker Automotive, which plans to launch production of a plug-in hybrid vehicle later this year.

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U.S. Automakers’ Recovery “Ahead of Plans,” Says Obama’s Car Czar

Administration wants to sell off remaining auto stock “as soon as practicable, says Ron Bloom.

by on Jan.12, 2011

U.S. "Car Czar" Ron Bloom, second from left, at the Detroit Auto Show.

Investors aren’t the only ones pleased by the apparent improvements made by General Motors.  Less than two months after the carmaker’s record IPO was completed, U.S. “car czar” Ron Bloom could be found touring the GM exhibit at the Detroit Auto Show, where he declared the efforts to revive the maker – and cross-town rival Chrysler – “ahead of plans.”

What’s all the more surprising, said Bloom, the Obama Administration’s top manufacturing adviser, is that the two domestic makers are doing so well in a still-depressed economy, with the auto market itself only barely showing signs of a true turnaround.

“If there’s a positive surprise, I think it’s in the companies’ ability to execute their plans in this environment,” said Bloom.

That echoes comments made by GM CEO Dan Akerson, yesterday, during and after a speech to the Automotive News World Congress.  The former telecomm executive noted that prior to its bankruptcy-led reorganization, GM could barely make money even in the best years the U.S. auto industry ever experienced.  It is now positioned to make money in some of the worst markets ever – as it did in 2010.

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Car Czar Adds Manufacturing to Job Requirements

President Obama Names Ron Bloom Senior Counselor for Manufacturing Policy. Is the Task Force on the Automotive Industry evolving into an industrial policy body?

by on Sep.08, 2009

“So let us never forget:  much of what we take for granted -- the 40-hour work week, the minimum wage, health insurance, paid leave, pensions, Social Security, Medicare -- they all bear the union label. It was the American worker -- men and women just like you -- who returned from World War II to make our economy the envy of the world. It was labor that helped build the largest middle class in history. Even if you're not a union member, every American owes something to America's labor movement.”

“So let us never forget: much of what we take for granted -- the 40-hour work week, the minimum wage, health insurance, paid leave, pensions, Social Security, Medicare -- they all bear the union label. It was the American worker -- men and women just like you -- who returned from World War II to make our economy the envy of the world. It was labor that helped build the largest middle class in history. Even if you're not a union member, every American owes something to America's labor movement.”

Yesterday, during a Labor Day speech  at an AFL-CIO picnic in Cincinnati, President Obama announced that Ron Bloom would serve as the Administration’s Senior Counselor for Manufacturing Policy. Bloom also retains his role as Senior Advisor to the Secretary of the Treasury assigned to the President’s Task Force on the Automotive Industry.

The latest development could be the first step towards a cabinet level department that looks after U.S. manufacturing interests and the middle class jobs it once created. The U.S. is the only industrialized nation in the world that lacks such a department to coordinate laws, tariffs and research to protect and create jobs.

The move follows the revelation on Friday that U.S. unemployment had reached almost 10% nationally, the highest rate in 26 years, with no recovery for workers predicted until next year, at the earliest. If you take into account  people who have stopped looking for work, are underemployed, or are involuntary part time contractors, the number could be as high as twice that or more, according to critics.

President Obama said, “Last week we learned that our manufacturing sector expanded for the first time in 18 months and had the highest monthly output in two years. It’s a sign that we’re on the right track to economic recovery, but that we still have a long way to go. That’s why I’ve asked Ron Bloom to help coordinate my Administration’s manufacturing policy. Distinguished by his extraordinary service on the Auto Task Force and his extensive experience with both business and labor, Ron has the knowledge and experience necessary to lead the way in creating the good-paying manufacturing jobs of the future. We must do more to harness the power of American ingenuity and productivity so that we can put people back to work and unleash our full economic potential.”

Bloom will work with the  National Economic Council on policy development and strategic planning for the President’s agenda to revitalize the manufacturing sector. He will work with departments and agencies across the administration – including the Departments of Commerce, Treasury, Energy, and Labor – to integrate existing programs and develop new initiatives affecting the manufacturing sector.

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GM, Ford Could Soon Be Profitable

Auto Task Force Chief Ron Bloom is looking for big payback to U.S. taxpayers on their GM stock.

by on Aug.05, 2009

The government wants to sell off its GM stake ASAP, but setting a hard timeline would be counter-productive, according to Auto Task Force Director Ron Bloom.

The government wants to sell off its GM stake, but setting a timeline would be counter-productive, according to Auto Task Force Director Ron Bloom, who foresees a big taxpayer payback.

On balance the federal bailout of the U.S. auto industry has been good not only for carmakers but also the U.S. economy, say several key industry experts.

Rod Lache, top automotive analyst for Deutsche Bank, said that the private sector’s general approval of the GM and Chrysler bailouts has been signaled by the increase in the value of certain auto stocks.  The restructuring of the auto industry not only has given General Motors and Chrysler a new lease on life, but also could lead to Ford Motor Co. becoming profitable again by the end of 2009.  And its is quite likely that GM will be profitable in 2011, Lache told a crowd of industry leaders at the annual Management Briefing Seminars, in Traverse City, Michigan.

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Meanwhile, the head of the Presidential Auto Task Force that bailed out GM and Chrysler reiterated that the federal government will not be involved in the day-to-day operations of either company. The government wasn’t involved in the decision on whether Bob Lutz should stay on at GM as vice chairman, said task force boss Ron Bloom. That, along with other personnel changes that have followed the company’s emergence from bankruptcy, were all left strictly in the hand of GM’s management, said Bloom, a former official with the United Steel Workers and a successful investment banker.

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Steven Rattner Leaves U.S. Treasury as Ron Bloom Takes over the President’s Auto Task Force

The first high level defection from the Obama Administration comes as the president is due to visit Michigan tomorrow.

by on Jul.13, 2009

Will auto task force, led by Steve Rattner, agree with GOP that bankruptcy is Detroit's best option?

Rattner was instrumental in orchestrating the bankruptcies and subsequent taxpayer financed restructurings of Chrysler and General Motors.

Steven Rattner, the head of the Presidents’ Auto Task Force, has resigned, according to a statement just issued by Tim Geithner, Secretary of the U.S. Treasury.

Taking over as the head of the Task Force is Ron Bloom a former employee of the United Steel Workers Union, who also was deeply involved in the auto bailouts that cost U.S. taxpayers more than $60 billion thus far.

“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,” said Geithner.

Rattner’s New York banking and financial services background might also be a factor in the resignation. Rattner was one of the founders of the private-equity firm Quadrangle Group LLC. Rattner himself is now under investigation for bribing New York politicians to secure lucrative pension fund management contracts for his old firm.

Rattner joined Treasury last February and was instrumental in orchestrating the bankruptcies and subsequent restructurings of Chrysler and General Motors, both of which occurred at unprecedented speeds.

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