Auto Task Force Chief, Investment Banker Steve Rattner, Broke The News To GM's Wagoner

Wall Street Journal:

The Obama administration used the threat of withholding more bailout money to force out General Motors Corp. Chief Executive Rick Wagoner and administer harsh medicine to Chrysler LLC, marking one of the most dramatic government interventions in private industry since the economic crisis began last year.

The administration's auto team announced the departure of Mr. Wagoner on Sunday. In a summary of its findings, the task force added that it doesn't believe Chrysler is viable as a stand-alone company, and suggested that the best chance for success for both GM and Chrysler "may well require utilizing the bankruptcy code in a quick and surgical way."

Read the whole story: Wall Street Journal

Comments

[mamacat]

How many years did Mr. Wagoner run GM? Eight? And he is now getting a $20 million severance package? Does that include a private jet, a country club membership, and lifetime free cadillacs?

Wouldn't he be a better role model for everyone if he didn't do this $20 million thing? If the government had not bailed out GM, would they still be in a position to pay him this much money?

This country is in bad shape in more ways than one. The richest among us beg for what amounts to bailouts for their severance packages, while criticising the "greedy" workers who made their companies successful in the first place.

It was the GM leadership who killed the EV-1, failed to build upon its success, and pushed for more and bigger SUVs and pickup trucks. If GM had not been able to countermand the low-emission and high mpg mandates put in place by the Dems in the first half of the 1990s, they wouldn't be in such dire straits today. They got their temporary high quarterly profits for a few years, while digging a hole they can't get out of today. The "free market" rears its ugly head once again.

[STATESMAN1]

I've plugged alittle bio on this guy below. It's hard to believe that wall street financiers, particularly ones that have never done anything with a car except buy it and drive it, are being chosen to turn the industry around. This guy doesn't have enough industry experience to get a job as a credit manager at a dealership! What the hell are we thinking??

Steven "Steve" Lawrence Rattner is an American financier and private equity investor. He is one of the four founding partners of the private investment firm Quadrangle Group, which invests media and communications companies globally.

A graduate of Brown University, Rattner started his career as a reporter with The New York Times, first at the Washington bureau, where he became close friends with Times' ownership-family member Arthur Sulzberger, who also was at the time working as a reporter; and then at the London bureau. Subsequently, Rattner quit journalism and joined Morgan Stanley, where he founded their Communications Group. In 1989 he joined Lazard as a General Partner; he founded their Media and Communications Group and became their deputy chairman and deputy CEO before leaving to found Quadrangle in 2000.

Quadrangle Group is an alternative investment firm focusing on private equity, public equity and asset management. firm focused on growth capital investments in middle market companies across a range of industries. The firm invests primarily in businesses involved in media and communications sectors.

[sposton]

Financial capitalism has ruined this country and its agents will not rest until there is nothing else of value left. We used to have people that could build industries and now we have investment bankers, financial magicians creating wealth for themselves out of our collective debt. These people couldn't change a tire and you put them in charge of solving problems of an industrial concern. They have a limited tool set and you can rest assured they will use them. Get rid of unions, raid pension funds and sell whatever is left to investment bankers, if not, sell it to Chinese and take your cut.

[EinChicago]

"may well require utilizing the bankruptcy code in a quick and surgical way"

Which illustrates why it was a moronic move to put a banker and not a bankruptcy attorney in charge of this decision.

The intent will be to use the banruptcy code to quickly void contracts and move on in a matter of weeks. The reality will be everyone from bondholders to creditors to shareholders will all file suit the same day, including constitutional takings challenges because of teh government involvement, and a bankruptcy would drag on for years with dozens of different case, several requiring SCOTUS to be involved (takings, for example) and would be an ungodly mess.


The wonderful thing about the US is that it is a democracy and not a dictatorship. The terrible thing about the US is that it is a democracy and not a dictatorship. The administration does not have the power to push through a bankruptcy any faster than normal because they do not have the power to prevent outside parties from suing all over the place.

[banja]

Thank goodness someone is out there knocking heads to get things done.

[traveler501]

Kerkorian doesn't look so dumb after all *grin* He warned them, screamed at them, threatened them...but noooooooo, they were too smart LOL

[VOTER]

Several billions of dollars in losses ago, the cry was, " FIRE WAGONER."

IT IS TOO BAD, THE GM BOARD DIDN'T HAVE THE "STONES" TO DO WHAT
IT KNEW HAD TO BE DONE BACK THEN.

[tomasedison]

once respected WSJ now nothing more than another FOX rag

[joshu]

I wish someone would fire me and pay me 20 million retirement. I don't understand how anyone can be upset for Wagoner, for running his company to the ground these last 8 years and get 20 million at the tail end

[igmond50]

You're FIRED! Log out...now! DON"T COME BACK! Check's in the mail.

[TJCole]

Investment bankers breaking news to manufactures that the way we do it ...

We are a nation of the banksters, by the banksters and for the banksters...not the workers or the people..!

[Ranta]

I wish my boss would tell me "you're fired". "Here's 20 million dollars, now go."

[iridium53]

We all note, however, that he didn't require the same thing of his former colleagues at Morgan Stanley.

How much money is it that Morgan has gotten so far? Directly and indirectly from AIG?

[TJCole]

Morgan Stanley was a big part of the criminal artificial oil price manipulation that was the last nail in the coffin of our auto industry...!