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GM’s Fired Fritz Henderson Surfaces at Sunoco

Henderson will become Chairman and CEO of SunCoke Energy.

by on Sep.07, 2010

Then GM CEO Fritz Henderson announces the Chevrolet Volt, the electric car designed to put oil companies out of business.

Sunoco, Inc. has announced that Frederick A. “Fritz” Henderson has joined the company as a senior vice president to help prepare for a previously announced separation of SunCoke Energy from parent Sunoco.

Coke is a key ingredient in steel, of course, a material that auto companies are large purchasers of during their often contentious relationships with suppliers.

Sunoco said last June that  it would separate SunCoke Energy from itself as part of a well-worn Wall Street strategy “designed to unlock shareholder value.” This type of financial engineering ploy clearly didn’t work in the now notorious auto industry captive  component maker spinoffs – GM’s Delphi and Ford Motor’s Visteon. Both transactions ultimately resulted in bankruptcies and costly shareholder losses.

SunCoke facilities in the U.S. have the capacity to manufacture approximately 3.67 million tons of metallurgical coke annually – roughly 25% of domestic production. Sunoco also has an equity interest in a 1.7 million tons-per-year coke-making facility in Vitoria, Brazil.

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Car Czar from Wall Street Faces S.E.C. Ban?

Bribes by Democratic contributor Steven Rattner are an issue.

by on Jun.04, 2010

Are you shocked that kickback money played a part in New York politics?

I'm shocked, shocked that money played a part in a Wall Street contract.

A Wall Street financier who was the Obama administration’s Car Czar is apparently fighting a Security and Exchange Commission move to ban him from working in the financial industry for his part in a “pay to play” scheme.

According to numerous press reports, Steven Rattner, who masterminded the Treasury Department bankruptcy filings of General Motors and Chrysler last year, is under investigation by Andrew Cuomo, New York’s ambitious and Democratic attorney general.

Cuomo  looked at his role as part of the Quadrangle Group in a kickback scheme that netted the firm millions of dollars of business from a New York State pension fund.

The problem in trying to sort out this controversy is that the source, or sources, are un-named in the stories claiming that a brouhaha is underway between the Obama Administration, a politically ambitious prosecutor and yet another federal regulatory agency that failed to do its regulatory job.

According to the gossip, the U.S. Security and Exchange Commission wants to ban Rattner from the business for several years because of Quadrangle’s conduct. Rattner resigned his Treasury position shortly after the auto bankruptcies and 363 sales were accomplished, but has since been harshly critical in a series of public appearances  or written pieces of Detroit executives – including Rick Wagoner and Fritz Henderson of GM, who were fired by Treasury as part of the reorganizations that cost taxpayers billions.

Rattner’s former firm, Quadrangle, paid $12 million in fines last spring to settle the charges with state and federal officials. However, Rattner was not part of the plea-bargain deal with Quadrangle, where he was a founding partner-  and where he made millions upon millions – because he, allegedly, resisted the proposed settlement requiring his exile.

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Reflections on Our Auto Restructurings

Former head of the Obama’s Auto Task Force speaks out.

by on Oct.21, 2009

Presidnet Obama speech on stabilizing the auto industry

Chrysler and GM survived because of the President’s willingness to let them go bankrupt.

In a speech today at the National Press Club, Steven Rattner defended the Administration’s decision to intervene in the auto industry and was harshly critical of the insular culture at General Motors, and years of mismanagement and leveraged debt at Chrysler.

Failure to act, however, was not an option in the Task Force’s view since it would mean the immediate loss or elimination of more than two-thirds of American-owned auto manufacturing capability, cost more than a million jobs in the short run, dramatically deepen and prolong the nationwide recession, and push unemployment rates in several states above 20%.

The question was how to act effectively, and not just buy time for the failed companies.

The Auto Task Force, of which Rattner was a key member, was just being formed when both Chrysler Corporation and General Motors Corporation submitted mandated “viability plans” on February 17. These plans were required when Congress declined to act on behalf of the failing companies before Christmas, and President Bush decided in late December to provide $17.4 billion of TARP funding to GM and Chrysler and kick the problem down the road to the incoming administration.

“Those plans evinced a state of denial as to the magnitude of their problems, the necessary changes and the conditions under which the Administration might provide further assistance,” Rattner said, in a speech sponsored by the Brookings Institute.

It was clear to him that both companies needed massive reductions in their costs and liabilities, including their legacy health care obligations, their labor costs, and their manufacturing footprints.

The government as piggy bank

“The President and his senior advisers were of one mind: No more money except in the context of shared sacrifice and restructurings to become truly viable.”

The next set of surprises came as the Task Force began meeting with various stakeholders at the failing companies. Rattner said the Task Force was startled when bondholders, labor unions, and senior management presented “asks” from the government.

“We had foolishly assumed that stakeholders eager to help would come with gives,” he said.

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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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