Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry by Steven Rattner
My rating: 4 of 5 stars
A very good accounting of the events surrounding the U.S. Government bailout of the American auto industry. Rattner did not pull very many punches in his analysis of the problems facing the auto industry or of the individuals involved in the massive restructuring that saved G.M. and Chrysler. Rattner gave out some pretty harsh criticism of auto industry executives as well as some notable politicians, and the criticism, from my perspective, was fair and deserved. The condition of General Motors, and the absolute blindness of top executives to the management rot that brought an American manufacturing giant to the cusp of ruin, is highlighted through this book. Lots of money being paid to top managers at G.M. for negative results. Rattner goes through some of the details, including the fate of bondholders and the terms ultimately accepted by the U.A.W. , two of the areas where the results of the restructuring have come in for the most criticism. His defense of those terms is spirited, and takes into account Rattner’s fundamental understanding of what could be achieved politically with the UAW. Rattner couples his criticism of the auto industry with a fairly harsh attack on Congress, and that criticism is bi-partisan. He shows the hypocrisy on both sides of the aisle, but points at Congress as an institution:
“The auto rescue succeeded in no small part because we did not have to deal with Congress. Before taking up my post, I didn’t realize how important this would be. I went to Washington thinking I understood the strengths and weaknesses of our legislative branch. Either I’d been hopelessly naive when I’d covered Congress as a reporter or it had changed for the worse. I was stunned to realize that if the task force had not been able to operate under the aegis of TARP, we would have been subject to endless congressional posturing, deliberating, bickering, and micromanagement, in the midst of which one or more of the troubled companies under our care would have gone bankrupt. Congress yields authority only under the direst of circumstances, as the example of TARP shows.”
Spoken like a true executive! But despite Rattner’s pro-executive bias his estimations of Congressional preening and ego driven meddling ring true. Legislative bodies tend to be alike in many ways. Congress is at the top of the food chain in terms of the very worst tendencies of legislative bodies to ignore substance in favor of uninformed politics.
Rattner, for a guy with $200 million in the bank, makes it a point to highlight all the times he picked up a dinner or lunch tab. But his personal parsimony does not take away from what is a pretty good book. This issue, if handled differently by Mitt Romney, who comes from a family that ran American Motors, might have tipped the 2012 election in a different direction. At the end of the day the decision to save the U.S. Auto industry was indeed the correct course of action. Rattner helps us to understand the details that went into that decision.