The Obama Administration initially wanted Nissan-Renault CEO Carlos Ghosn to run GM after Rick Wagoner was ousted in 2009, and repeatedly pressed Fiat to put up cash for a stake in Chrysler, according to an upcoming book about the government bailout of General Motors and Chrysler.
Steven Rattner, President Obama's auto adviser who steered the government's $85 billion bailout of GM and Chrysler, is about to publish a tell-all account about his six-month stint inside the White House.
The Detroit News, Washington Post and Huffington Post obtained draft copies of the book -- "Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry." It is scheduled to be published Oct. 14.
Rattner joined the White House Auto Team after the initial bailout of GM and Chrysler by the Bush administration. He departed in July 2009, after Chrysler and GM exited bankruptcy.
In the book, he said he offered the top job at GM to Ghosn after Wagoner was dismissed by the White House in March 2009. In 2006, Wagoner turned down a chance to have GM join the Renault-Nissan alliance. Ghosn declined Rattner's offer, largely because Renault and Nissan were also navigating the industry's deep downturn and he "felt considerable loyalty to both companies and wanted to see them through the crisis," Rattner wrote.
Rattner also wooed an unidentified executive from the Midwest to become GM chairman, and flew to the prospects's home for a meeting before settling on Kent Kresa, who was already on the GM board.
Just a few months afterward, Rattner selected former AT&T CEO Ed Whitacre Jr. to join the GM board as chairman.
Among other highlights from the book, drawn from the Detroit News, Washington Post and Huffington Post accounts:
• In one of his first meetings to discuss GM and Chrysler's predicament after winning the 2008 election, Obama asked "Why can't they make a Corolla?"
"We wish we knew," his advisers replied.
• The White House initially planned for a $100 billion bailout. The aid package GM, Chrysler and their related finance arms eventually secured totaled $85 billion.
• The administration also weighed a $10 billion fund to aid ailing auto suppliers but reduced the package to $5 billion. Government officials also considered a plan to provide funding to steer suppliers through bankruptcy.
• The White House often considered the political consequences of the bailouts. White House adviser David Axelrod once brought fresh polling data to a discussion about the Chrysler rescue, and Chief of Staff Rahm Emanuel identified congressmen who represented districts where major Chrysler operations were located.
• Emanuel, when reminded that tens of thousands of factory jobs were at stake, once uttered a common profanity expressing disdain for the UAW.
Wagoner's pension payout draws concern
• Democratic Michigan Gov. Jennifer Granholm, dejected about the likelihood GM and Chrysler would have to seek bankruptcy protection, told Obama in a voice barely louder than a whisper: "I hope you know what you're doing."
• Obama was alarmed by the decision to allow a forced-out Wagoner to collect $7.1 million of the $22.1 million he was owed in GM pension benefits.
"I could see the president's jaw muscles tighten," Rattner says in the book, according to the Detroit News. Obama, a former community organizer, had difficulty with the "notion of writing a check that was about 100 times the annual income of a GM worker to the CEO who had brought the company down."
Obama, Rattner wrote, "grimaced and reluctantly acquiesced. I found it striking that the president of the United States had spent more time on an issue of executive pay than on the question of whether to dismiss a major CEO in the first place."
• Rattner says Fiat CEO Sergio Marchionne clashed with UAW President Ron Gettelfinger over the terms of the Chrysler bailout, and sought to take advantage of Obama's desire for a quick tie-up between Fiat and Chrysler.
The government, Rattner says, also pressed Fiat to put up money for a 20 percent stake and management control of Chrysler. The request was unsuccessful, and Fiat gained management control and a 20 percent stake in the automaker without putting up any cash.
Marchionne, according to Rattner's book, told Gettelfinger the union needed to embrace a "culture of poverty" instead of a "culture of entitlement," by slashing, among other things, retiree health-care benefits.
The comment drew an angry reply from Gettelfinger.
"Why don't you come and sit with me and tell a 75-year-old widow that she can't have surgery and that you killed her husband?" he said.
• In the book, Rattner, according to the Huffington Post, does emphasize that Obama didn't seem to prefer the giant auto workers unions, either, stating that "no one in the Obama administration ever asked us to favor labor for political reasons."
'Managing GM affairs'
• GM CEO Fritz Henderson, who succeeded Wagoner, wanted to move GM's headquarters from the Renaissance Center on Detroit's riverfront to the company's Tech Center in Warren, Mich., to reduce operating costs and encourage senior management to take a more active role in the company's research and product planning efforts.
Rattner endorsed the idea, the News. said, but senior White House officials rejected the proposal -- saying it would be devastating to Detroit, even if the automaker donated the RenCen to the city.
"It's over for Detroit if you do this," Michigan native Gene Sperling, a U.S. Treasury Department official, yelled in a meeting, the book says. "Don't do this to (Detroit Mayor) Dave Bing.... He's a good man trying to do a good thing."
The White House eventually determined "the move would be a bridge too far," according to the book. "Fortunately, this unique intervention into a specific GM matter was never leaked to the press, saving us from having to explain how it comported with our policy of letting GM and Chrysler manage their own affairs."
• Rattner acknowledged that Detroit's automakers weren't entirely to blame for the situation.
"I would discover that the struggles of GM and Chrysler were as much a failure of management as a consequence of globalization, oil prices, and organized labor," he writes in the book. "The auto rescue remains one of the few actions taken by the administration that, at least in my opinion, can be pronounced an unambiguous success. Detroit should count itself lucky."
• Rattner said he spent $400,000 in legal fees to pass the government's vetting process. And rules designed to make it difficult for lobbyists to get a job with the government also made it difficult for him to hire experts on the auto industry. He resigned from the Auto Team post after federal investigators began investigating whether he had paid a middleman to secure a lucrative management contract with New York's pension system while formerly working on Wall Street.
The News said GM has no comment on the book.
"The book is history," GM spokesman Greg Martin told the paper. "We're a new company and we have too much work to do and no time for book reviews."