Former Auto Task Force adviser Steven Rattner recently wrote an article of government’s rescue of General Motors and Chrysler. It includes some pretty juicy tidbits. For example, when the Obama Administration discovered how poor the condition of General Motors and Chrysler were, there was some thought to just let Chrysler go under. But ultimately, it was decided to save Detroit's smallest carmaker because it was determined that the horrible economy couldn’t deal with the loss of another 300,000 jobs. Rattner wrote “...stunningly poor management” and that they were “...in a state of denial.” He added, “We were shocked, even beyond our low expectations, by the poor state of both GM and Chrysler.” He wrote specifically about GM that it was “...perhaps the weakest finance operation any of us had ever seen in a major company.”
Still it was the ultimate decision by Fiat to partner with Chrysler that convinced Obama that it was worth saving the fledging U.S. manufacturer.
GM worked hard trying to convince the task force to save it. For example, the company provided PowerPoint presentations to the task force “almost daily.” Execs at the company, specifically CEO Rick Wagoner, were quick to blame the financial crisis, oil prices, the yen-dollar exchange rate, and the United Auto Workers as the reasons for GM’s problems and not accepting his own contribution to the mess. Interestingly, Wagoner offered to resign twice -- once when Bush was still President and in the third month of the Obama Administration. At first, Rattner rejected the offer, but then fired Wagoner on March 27. Wagoner’s response? “Are you going to fire (UAW president) Ron Gettelfinger, too?”
The GM board did not like the release of Wagoner, and there was some talk of mass resignations. Wrote Rattner, “If ever a board of directors needed shuffling, it was GM’s....” The government replaced most of the board of directors after it took 61 percent equity stake in the company and GM exited bankruptcy.
General Motors decided on its own to dump Pontiac, Saturn and Hummer. But Rattner wrote that the task force had suggested the demise of even more brands. It was the new CEO Henderson who stepped up and saved Buick and GMC because he had a “passionate belief” in Buick’s appeal in China and GMC’s reputation.
Rattner concluded that the task force was successful because it didn’t need Congressional approval.