Former car czar: we should have pushed for more cuts

Reuters News
Posted: Dec 15, 2011 3:49 PM
Former car czar: we should have pushed for more cuts

DETROIT (Reuters) - Steve Rattner, the former head of the U.S. auto task force, said he could have pushed auto workers, management and creditors for deeper concessions to make the U.S. auto industry more globally competitive.

While Rattner described the 2009 bailouts of General Motors Co and Chrysler Group LLC as an unambiguous success, he said he now has second thoughts about some details of the bankruptcy restructurings.

For example, no active workers represented by the United Auto Workers union received a pay cut nor were they asked to forfeit a portion of their pensions, he said. Creditors, too, got more than they would have received in a liquidation.

"If we had more time, we might have asked all the stakeholders to sacrifice a little bit more," Rattner told reporters after his remarks to the Detroit Economic Club.

As the head of the auto task force, Rattner led the Obama administration's efforts to rescue GM and Chrysler. Rattner described the time as "not even a near-death experience - a death experience" for GM, the largest U.S. automaker.

As part of their bailouts, the U.S. government took a majority stake in GM in 2009, while Chrysler was placed under management of Italian automaker Fiat SpA.

Since then, GM's rebound has exceeded his expectations, Rattner said. The U.S. government's stake in GM fell to about one-third after the automaker's initial public offering.

Still, Rattner said he would have done more to streamline GM's cost structure if he had more time during the crisis.

"We could have done a little bit better job, particularly on GM, in combing through the mess of liabilities and contracts and things they had if we had a little more time," Rattner said before signing copies of his 2010 book "Overhaul", which just came out in paperback.

(Reporting by Deepa Seetharaman; Editing by Gary Hill)