Steve Rattner, a Wall St-based corporate restructuring expert, was hired by the Obama administration early this year to work out the best way of dealing with the collapsing auto industry (specifically GM and Chrysler). He didn't know much about cars - his outsiderness was part of the point - so he and his speedily recruited team had five weeks to get up to speed with this vast and complex industry and recommend a solution - any longer, and the companies would go bust. After overseeing a government bailout, he's moved on - and has written a gripping account of his time as 'car czar' for Fortune.
On lifting the lid, he and his team were appalled by what they found (ah, the curse of Powerpoint):Everyone knew Detroit's reputation for insular, slow-moving cultures. Even by that low standard, I was shocked by the stunningly poor management that we found, particularly at GM, where we encountered, among other things, perhaps the weakest finance operation any of us had ever seen in a major company.
For example, under the previous administration's loan agreements, Treasury was to approve every GM transaction of more than $100 million that was outside of the normal course. From my first day at Treasury, PowerPoint decks would arrive from GM (we quickly concluded that no decision seemed to be made at GM without one) requesting approvals. We were appalled by the absence of sound analysis provided to justify these expenditures.
The cultural deficiencies were equally stunning. At GM's Renaissance Center headquarters, the top brass were sequestered on the uppermost floor, behind locked and guarded glass doors. Executives housed on that floor had elevator cards that allowed them to descend to their private garage without stopping at any of the intervening floors (no mixing with the drones).
Who did these guys think they were? Anna Wintour?
On working with the president:
I found Obama's style consistent with his "No drama Obama" image and on a par with the best CEOs I had spent time with. He was cordial without being effusive and decisive when his advisers were divided.
What else did you expect an Obamabot to say to justify the nationalization of GM and Chrysler. He was part of the team effort to create this situation. The management I have no doubt made errors in judgment and management, but even a brief look at the cost of the UAW is a major factor in the financial health of these companies. Even if this gentleman was telling the truth, which is doubtful, what is the justification for giving 40% of the company to the UAW? The companies are now governed by a management team that no doubt has the confidence of this gentleman is its financial situation any better? When these companies were fighting to stay in business, without government bailouts, why did the UAW refuse to assist? Was it because they knew the administration that they and their money had put into power would save them in return?
I will never buy another GM (Government Motors) or Chrysler vehicle again and will try and influence everyone I know not to support this nationalization effort of this administration and the power grab of the UAW.
Posted by: John | October 21, 2009 at 04:38 PM