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Rattner: Detroit 3 CEOs measure up, finally

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Rattner: Detroit 3 CEOs measure up, finally

David Barkholz

Automotive News -- September 20, 2010 - 12:01 am ET

The Detroit 3 finally have CEOs worth betting on, says Steven Rattner, former head of the Obama auto task force that oversaw the bailouts of General Motors Co. and Chrysler.

Rattner, who has written a book on the bailouts titled Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry, said he would consider risking his own money in any of the three companies based on the skill of senior management.

Rattner was a successful private equity investor at Quadrangle Group and other investment houses before being the Obama auto task force chief from February 2009 to July 2009.

He was interviewed by Automotive News last week.

"If there's anything to make people who care about this industry feel optimistic, it's that for the first time in a very long time these companies have what I call backable CEOs, people I would put my money or my investors' money behind because they are superstars," Rattner said.

He was referring to Alan Mulally at Ford Motor Co., Sergio Marchionne at Chrysler and Dan Akerson at GM. Rattner was instrumental in recruiting Akerson to GM's board, and he supported Fiat's and Marchionne's role in rescuing Chrysler.

Two deciders

Rattner said the churn in CEOs at GM was lamentable -- four in 18 months -- but the board of directors has landed the right guy.

"Nobody who knows anything about management can think that having four CEOs in less than two years is a good thing for any company," Rattner said.

He said Akerson brings to the job the same kind of decisiveness, skill and attention to detail as his immediate predecessor, Ed Whitacre. But Akerson, 61, can bring that energy for several years, while Whitacre, 68, was going to retire after a planned initial public offering this year. Instead, Whitacre stood down as CEO this month.

"In picking Ed Whitacre and Dan Akerson in a similar vein, we very much wanted someone who was a decider, who was a no-B.S. guy," Rattner said.

In his 315-page book, Rattner describes the behind-the-scenes drama that led to the federal rescues of GM and Chrysler, their restructurings and the human toll exacted on management, employees and stakeholders.

In the book, Rattner, 58, names names of those he felt fell down on the job.

For example, Rattner recounts how he personally fired Rick Wagoner as CEO in March 2009.

Rattner said last week that Wagoner was "completely irresponsible" to have allowed GM to run so low in cash in the fall of 2008 that the government had no choice but to "tide the company over" with a $12.4 billion cash infusion just to bridge GM into the new year and the Obama administration.

"In the fall when all outside advisers told Wagoner that you have to be at least ready for bankruptcy and understand your options, he just kept saying no, no, no," Rattner said. "That ended up costing the taxpayers a lot of money."

Marchionne, who also is CEO of Italian automaker Fiat, is portrayed in the book as a volatile mastermind. In one meeting described in the book, Marchionne becomes so enraged with an underling that task force members quietly leave the room.

At the same time, Rattner credits Marchionne's skill for negotiating control of Chrysler without putting in Fiat cash, despite a serious task force split on whether Chrysler should be rescued at all.

Turnaround at Chrysler

Rattner said Marchionne deserves credit for Fiat's turnaround and the one that is under way at Chrysler.

"He's smart. He's incredibly driven. I've never in all my years met anybody as driven as he is. And he's very effective. He's the antithesis of everything we just discussed about GM in terms of speed of decision-making, process and business acumen," Rattner said.

Companies can turn around quickly with the right leadership, Rattner said -- a process, in his opinion, that is well under way at GM. And that has been the case at Ford under Mulally, Rattner said.

But even Mulally was largely an unknown quantity when Ford grabbed the Boeing executive vice president for its top job in 2006. Mulally never had been a CEO -- a shortcoming that GM's board of directors wouldn't risk when it appointed Whitacre CEO in December and Akerson after him, Rattner said.

Said Rattner: "Bill Ford made a very courageous and, in retrospect, extraordinarily wise decision to take a chance on him."

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100920/OEM02/309209961/1424#ixzz105vVc3iz

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