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Head of U.S. auto task force to leave post

Steven Rattner will return to the private sector after leading the restructurings of General Motors and Chrysler.

July 14, 2009|Ken Bensinger

Steven Rattner, the Wall Street millionaire and relentless deal maker who led General Motors and Chrysler through bailout and bankruptcy, is leaving his post atop the government's auto task force just five months after he was handpicked for the job.

"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," Treasury Secretary Timothy F. Geithner said Monday.

Geithner said Ron Bloom, another key member of the task force, will run the group, which will continue monitoring the industry, though in a less-active manner.

Rattner, a key Democratic fundraiser, had been seen as a rising star in politics with possible Cabinet-level credentials. The auto task force job, it was presumed, would open doors in Washington for a man who, with a net worth of at least $190 million, according to public filings, had little left to prove in the financial world.

A former reporter who made a fortune at firms such as Lazard Freres and the private equity shop he ran, Rattner took the task force job in February and wasted no time in taking the troubled automakers, as well as lender GMAC, through what proved to be their most dramatic restructuring in history.

Traveling between Washington, Detroit and New York, Rattner negotiated with automakers, suppliers, creditors and other stakeholders, and managed to squeeze concessions from stakeholders including the United Auto Workers union and seemingly intractable bondholders.

Along the way, Rattner was lauded for helping push through changes to an industry that would have been unthinkable only a year ago.

"No one can question the care he showed when trying to balance the sometimes conflicting interests of stakeholders in the efforts of Chrysler and GM to restructure themselves," said Rep. John D. Dingell (D-Mich.) in response to the news Monday.

Today, GM has less than a third the debt it did prior to Rattner's involvement, Chrysler is controlled by Italian automaker Fiat and former GM lending arm GMAC is a full-fledged bank.

Collectively, those three companies have received about $75 billion in federal financing since late last year, and the government now controls nearly 61% of GM and 8% of Chrysler.

But with the heaviest lifting completed, and both automakers having emerged from bankruptcy, Rattner will return to New York.

He will not return to Quadrangle Group, the private equity firm he helped found, a source familiar with the situation said. A spokesman for Quadrangle declined to comment.

Despite the accomplishments, Rattner has been dogged by Quadrangle's links to an influence-peddling scandal in New York involving a public employee pension fund.

New York's attorney general has filed criminal charges in the case, and although the White House has publicly said that Rattner was not a target of the investigation, the situation was an uncomfortable one for the so-called car czar and the administration.

Nevertheless, Geithner said Monday that he hoped Rattner "takes another opportunity to bring his unique skills to government service in the future."

Bloom, a former investment banker with extensive experience in labor union reorganization, will help the task force transition "away from day-to-day restructuring to monitoring this vital industry and protecting the substantial investment the American taxpayers have made in GM, Chrysler and GMAC," Geithner said.


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