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Rattner: GM may have stretched truth about loan repayment

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Rattner: GM may have stretched truth about loan repayment

Robert Snell / The Detroit News

General Motors Co. Chairman and Chief Executive Ed Whitacre may have stretched the truth in a commercial saying the automaker had repaid its federal obligations, former autos czar Steve Rattner said today.

GM "may have slightly elasticized the reality of things," Rattner told reporters ahead of a speech today.

But he also praised Whitacre. "We should all wake up and thank God we have him. The guy's a hero," Rattner said.

Rattner said GM has signaled to the market that it will report a profit for the first quarter next week.

GM touted its repayment of $6.7 billion in federal loans -- but downplayed the fact that the taxpayers are still on the hook for $43 billion in aid that was swapped for a 61 percent majority stake in GM.

A conservative think tank filed a complaint with the Federal Trade Commission over GM's ads touting its repayment that have since stopped running. Many Republicans have also criticized the decision -- noting GM used unused government loans to repay the government.

Rattner, who was President Barack Obama's auto czar last year, returned to Detroit on Monday a year after Chrysler's bankruptcy filing, and talked about why the government saved the auto industry.

Rattner, who is writing a book on his work as auto czar due out in October, touted progress that GM and Chrysler have made following the government's controversial $62 billion bailout.

Rattner delivered a speech titled "How and Why We Saved Detroit" during a Federal Reserve Bank of Chicago conference at a time when the auto industry bailout remains deeply unpopular nationally.

The conference was titled "After the Perfect Storm: Competitive Forces Shaping the Auto Industry."

Rattner also is under personal pressure, too, as Republican members of Congress have called for an investigation into his conduct in an alleged 2005 kickback scheme involving New York State pension funds through his role as a co-founder of the Quadrangle Group investment firm.

From The Detroit News: http://detnews.com/article/20100510/AUTO01/5100414/1148/auto01/Rattner--GM-may-have-stretched-truth-about-loan-repayment#ixzz0nZaF9fk3

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