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Book review: 'Overhaul' by Steven Rattner

The author's recent troubles with ethics issues cast doubt on this self-congratulatory look at his work on GM and Chrysler for the Obama administration.

October 26, 2010|By Ken Bensinger | Los Angeles Times

In the weeks prior to General Motors' historic bankruptcy filing in June of last year, then-car czar Steven Rattner furiously raced to tie up a number of key last-minute details. Chief among them was finding someone to take over stewardship of the 100-year-old company's board.

Amid negotiations with Ed Whitacre Jr., the irascible Texan who would go on to take the job, Rattner was troubled by reports about his own finances. Articles suggested that the private equity firm Rattner founded, Quadrangle Group, had investments conflicting with his role leading the Obama administration's bailouts of GM and Chrysler.

Rattner, a former New York Times journalist who had gone on to considerable fortune as an investment banker before he started Quadrangle in 2000, considered the reports — and subsequent allegations that he had been involved in a pay-for-play scandal involving a New York pension fund — personal affronts.

"Here we were in the midst of this huge auto crisis and the reporters covering it were more interested in my finances than in nearly everything else we were doing," Rattner writes in "Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry."

"During my thirty-five years in the working world," Rattner later adds, "I had never been accused of so much as jaywalking."

That exasperated aside proves startling in retrospect.

Despite the fact that the book was updated with new info on GM just weeks before publication, it conveniently makes no reference to the fact that in April, the New York attorney general's office reached a $7-million settlement with Quadrangle, which repudiated Rattner's conduct as a middleman in investment deals for the $132-billion pension fund, calling it "inappropriate, wrong and unethical."

The other shoe dropped this month with the revelation that the Securities and Exchange Commission was close to settling with Rattner for a reported $6 million, plus a two-year ban from the securities industry, with the New York attorney general in negotiations for a separate agreement.

Little more than a dozen paragraphs in Rattner's book are devoted to his own ethical issues, but the revelations of the last few weeks unfortunately overshadow his book and its important subject matter. The recent shaming of Rattner strikes a sharp contrast to the triumphal tone adopted throughout his book, an often gripping yet generally mean-spirited narrative presented as a shiny testament to what the author portrays as his own exceptional performance in the crisis.

Purporting to guide readers through the financial rebirths of two titans of American manufacturing, Rattner delivers faux-humble accounts of how he and his carefully assembled team of Wall Street veterans formed part of "Team Auto" and saved America's industrial base.

Long on detail about what Rattner had for lunch in his Treasury Department office — usually a Caesar salad or a tuna sandwich — but short on insights into why GM's market share sunk like an Impala dropped in the Detroit River, this is a book more concerned with important people than important ideas.

And Rattner certainly knows a lot of people. Spread throughout the book, and particularly in the acknowledgements at the back, are generous nods to luminaries like Bill and Hillary Clinton, for whom Rattner raised money as a Democratic fundraiser; Mike Bloomberg, whose money Rattner manages; and Dick Fuld, who bankrupted Lehman Brothers.

The list of people Rattner savages in his book is almost as long.

Rattner has bad things to say about congressmen, senators, journalists, employees and directors of the pre-bankruptcy automakers, employees and directors of the post-bankruptcy automakers, lawyers, bankers and even the very people he worked alongside to restructure GM and Chrysler.

He saves his most stinging venom for Ray Young, GM's former chief financial officer, whom he portrays as unprepared, incompetent and devoid of anything approaching a clue. He ultimately calls on him to be fired.

Apparently, the idea behind the public flogging of Young, a longtime GM employee, was to show readers the deep culture problem at the company. Instead, it seems to turn the lens back on Rattner, who portrays himself as the only infallible player in the whole affair.

Rattner tells of his sacrifices for the good of the country. He lives in a grubby rental far from the private planes he likes to fly. He details spending $400,000 of his own money to assure he would pass the administration's vetting process for the job. And he stoically grits his teeth as he pays for dinners at the Four Seasons with auto execs out of his own pocket (luckily, his pockets are deep: Rattner is worth at least $188 million, we learn).

The good news, Rattner assures us, is that the bailouts, which cost taxpayers at least $80 billion that may never be fully recovered, were "an unambiguous success."

But page after page, the more Rattner pats himself on the back, the more readers are left wondering whether they should take his word for it.

The bailouts, which ended with Chrysler filing for bankruptcy and getting bought by Italian automaker Fiat, followed by GM's own Chapter 11 filing and subsequent emergence with a squeaky clean balance sheet, may very well have been the best solution to a very messy problem.

Yet self-congratulation aside, the Fiat-helmed Chrysler is still a mess and has yet to deliver the new products that company head Sergio Marchionne said would save the struggling company. And GM's initial public offering, key to earning taxpayers back the nearly $50 billion they loaned to what was once the world's largest automaker, is still an unflown trial balloon.

Rattner has no doubts, however.

"Detroit," he writes, "should count itself lucky."

ken.bensinger@latimes.com

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