Overhaul

HOUGHTON MIFFLIN HARCOURT
BOSTON NEW YORK
2010

Copyright © 2010 by Steven Rattner

All rights reserved

For information about permission to reproduce selections from this book,
write to Permissions, Houghton Mifflin Harcourt Publishing Company,
215 Park Avenue South, New York, New York 10003.

www.hmhbooks.com

Library of Congress Cataloging-in-Publication Data
Rattner, Steven.
Overhaul : an insider's account of the Obama administration's emergency
rescue of the auto industry / Steven Rattner.
p. cm.
Includes index.
ISBN
978-0-547-44321-8
1. Automobile industry and trade—Government policy—United States.
2. Bankruptcy—Government policy—United States. 3. Industrial policy—
United States. 4. United States—Economic policy—2009– I. Title.
HD
9710.
U
52
R
38 2010
338.4'76292220973—dc22 2010033188

Book design by Melissa Lotfy

Printed in the United States of America

DOC
10 9 8 7 6 5 4 3 2 1

FOR MAUREEN

Cast of Characters
[>]

Prologue
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1. Dead Man's Curve •
[>]

2. The Bridge to Obama •
[>]

3. Mr. Rattner Goes to Washington •
[>]

4. "F**k the UAW" •
[>]

5. Rick, Bob, and Sergio •
[>]

6. The B Word •
[>]

7. "Is This Unanimous?" •
[>]

8. Jimmy Turns Bright Red •
[>]

9. Chrysler's Last Mile •
[>]

10. Harry Wilson's War •
[>]

11. Epic Bankruptcy •
[>]

12. Dealer Nation •
[>]

13. The Chief Executive Shuffle •
[>]

Epilogue •
[>]

Note on Sources
[>]

Acknowledgments
[>]

Index
[>]

TEAM AUTO
(U.S. Treasury, unless otherwise noted)

R
ON
A. B
LOOM

C
LAY
C
ALHOON

B
RIAN
D
EESE
(National Economic Council)

D
IANA
F
ARRELL
(National Economic Council)

M
ATTHEW
F
ELDMAN

R
OBERT
F
RASER

S
ADIQ
M
ALIK

D
AVID
M
ARKOWITZ

P
AUL
N
ATHANSON

B
RIAN
O
SIAS

S
TEVEN
R
ATTNER

B
RIAN
S
TERN

H
ALEY
S
TEVENS

H
ARRY
W
ILSON

ADVISERS TO AND STAKEHOLDERS IN CHRYSLER

A
LFREDO
A
LTAVILLA,
in charge of Fiat power-train technologies

S
TEPHEN
F
EINBERG,
managing partner of Cerberus Capital Management (owner of Chrysler)

A
NDREW
H
ORROCKS,
former managing director of UBS (adviser to Fiat)

T
HOMAS
L
AURIA,
partner of White & Case (counsel to certain Chrysler senior lenders)

J
AMES
"J
IMMY
" L
EE
J
R.,
vice chairman of JPMorgan Chase (Chrysler senior lender)

R
OBERT
M
ANZO,
executive director of Capstone Advisory Group (adviser to Chrysler)

S
ERGIO
M
ARCHIONNE,
CEO of Fiat; later appointed CEO of Chrysler (since June 2009)

ADVISERS TO TEAM AUTO

X
AVIER
M
OSQUET,
senior partner of Boston Consulting Group

J
OHN
R
APISARDI,
partner of Cadwalader, Wickersham & Taft (counsel)

T
ODD
S
NYDER,
managing director of Rothschild

J
OHN
"J
ACK
" W
ELCH
J
R.,
former chairman and CEO of General Electric

BUSH PERIOD

J
OSHUA
B
OLTEN,
White House chief of staff

C
ARLOS
G
UTIERREZ,
secretary of Commerce

K
EITH
H
ENNESSEY,
director of the National Economic Council

D
AN
J
ESTER,
Treasury contractor

J
OEL
K
APLAN,
White House deputy chief of staff for policy

H
ENRY
"H
ANK
" P
AULSON,
secretary of the Treasury

J
OSHUA
S
TEINER,
Obama transition adviser

CANADA

P
AUL
B
OOTHE,
senior associate deputy minister of Industry Canada

CHRYSLER

R
OBERT
K
IDDER,
chairman (since June 2009)

R
ONALD
K
OLKA,
CFO

T
HOMAS
L
A
S
ORDA,
copresident

R
OBERT
N
ARDELLI,
chairman and CEO

J
AMES
P
RESS,
co-president

CONGRESS

S
EN
. R
OBERT
C
ORKER
(R-Tennessee)

S
EN
. C
HRISTOPHER
D
ODD
(D-Connecticut)

R
EP
. B
ARNEY
F
RANK
(D-Massachusetts)

R
EP
. S
TENY
H
OYER
(D-Maryland), House majority leader

S
EN
. M
ITCHELL
M
C
C
ONNELL
(R-Kentucky), Senate minority leader

R
EP
. N
ANCY
P
ELOSI
(D-California), Speaker of the House

S
EN
. H
ARRY
R
EID
(D-Nevada) Senate majority leader

S
EN
. C
HARLES
S
CHUMER
(D-New York)

FINANCIAL REGULATORS

S
COTT
A
LVAREZ,
general counsel of the Federal Reserve Board

S
HEILA
B
AIR,
chairman of the Federal Deposit Insurance Corporation

B
EN
B
ERNANKE,
chairman of the Federal Reserve Board

R
OBERTA
M
C
I
NERNEY,
deputy general counsel of the Federal Deposit Insurance Corporation

C
HRISTOPHER
S
POTH,
senior deputy director for supervisory examinations at the Federal Deposit Insurance Corporation

FORD

L
EWIS
B
OOTH,
CFO

W
ILLIAM
"B
ILL
" F
ORD
J
R.,
executive chairman

A
LAN
M
ULALLY,
CEO

Z
IAD
O
JAKLI,
group vice president of government and community relations

GENERAL MOTORS

D
ANIEL
A
KERSON,
CEO (as of September 2010)

D
AVID
B
ONDERMAN,
director

T
ROY
C
LARKE,
president of GM North America

K
ENNETH
C
OLE,
vice president of global public policy and government relations

G
ARY
C
OWGER,
group vice president of global manufacturing and labor relations

N
ICHOLAS
C
YPRUS,
controller and chief accounting officer

G
EORGE
F
ISHER,
lead director (until July 2009)

S
TEPHEN
G
IRSKY,
director; later appointed vice chairman of corporate strategy and business development

F
REDERICK
"F
RITZ
" H
ENDERSON,
COO; later appointed CEO (March-December 2009)

K
ENT
K
RESA,
director and interim chairman (March-July 2009)

M
ARK
L
A
N
EVE,
vice president of sales and marketing of GM North America

P
HILIP
L
ASKAWY,
director

C
HRISTOPHER
L
IDDELL,
CFO (since January 2010)

R
OBERT
L
UTZ,
vice chairman and responsible for global product development

K
ATHRYN
M
ARINELLO,
director

P
ATRICIA
R
USSO
, lead director

J
OHN
S
MITH,
group vice president of corporate planning and alliances

C
AROL
S
TEPHENSON,
director

G. R
ICHARD
W
AGONER,
chairman and CEO (until March 2009)

E
DWARD
W
HITACRE,
chairman (July 2009 to December 2010) and CEO (December 2009 to September 2010)

R
AY
Y
OUNG,
CFO; later appointed vice president of GM International Operations

MICHIGAN POLITICIANS

D
AVID
B
ING
(D), mayor of the city of Detroit

R
EP
. J
OHN
D
INGELL
(D)

G
OV
. J
ENNIFER
G
RANHOLM
(D)

S
EN
. C
ARL
L
EVIN
(D)

R
EP
. S
ANDER
L
EVIN
(D)

S
EN
. D
EBORAH
S
TABENOW
(D)

OTHERS

A
LVARO
"A
L" DE
M
OLINA,
CEO of GMAC

C
ARLOS
G
HOSN,
CEO of Renault-Nissan

J
OHN
M
C
E
LENEY,
chairman of National Automobile Dealers Association

TREASURY DEPARTMENT

S
TEPHANIE
C
UTTER,
chief spokesperson

J
ENNI
E
NGEBRETSEN
L
E
C
OMPTE,
spokesperson

K
ENNETH
F
EINBERG,
special master for
TARP
executive compensation

T
IMOTHY
G
EITHNER,
secretary of the Treasury

A
LAN
K
RUEGER,
assistant secretary for economic policy

M
ARK
P
ATTERSON,
chief of staff

G
ENE
S
PERLING,
counselor to the secretary of the Treasury

UNITED AUTO WORKERS

R
ON
G
ETTELFINGER,
president

G
ENERAL
H
OLIEFIELD,
vice president and director of Chrysler department

B
OB
K
ING,
vice president and director of Ford department; later elected president

C
AL
R
APSON,
vice president and director of General Motors department

A
NDREW
Y
EARLEY,
managing director of Lazard (UAW's financial adviser)

U.S. BANKRUPTCY COURT, SOUTHERN DISTRICT OF NEW YORK

J
UDGE
R
OBERT
G
ERBER,
oversaw the bankruptcy proceedings of General Motors

J
UDGE
A
RTHUR
G
ONZALEZ,
oversaw the bankruptcy proceedings of Chrysler

WHITE HOUSE

D
AVID
A
XELROD,
senior adviser to the President

R
AHM
E
MANUEL,
chief of staff

R
OBERT
G
IBBS,
press secretary

A
USTAN
G
OOLSBEE,
member of the Council of Economic Advisers

C
HRISTINA
R
OMER,
chair of the Council of Economic Advisers

L
AWRENCE
S
UMMERS,
director of the National Economic Council

T
HE OVAL OFFICE
has no proper waiting room, only a small anteroom in which President Obama's "body person," Reggie Love, and his secretary, Katie Johnson, are usually seated. Against the wall is a small TV, normally used to monitor news channels. But on this Sunday evening near the end of March 2009, it was tuned to the Arnold Palmer Invitational golf tournament, where Tiger Woods (then still heroic) was making a long-awaited return from knee surgery.