By Greg Gardner; Detroit Free Press ~ Oct 03, 2010

Guiding the makeover of Chrysler and General Motors, Steven Rattner often acted as much like a WWF referee as the politically connected Wall Street fixer he was thought to be.

Bumptious, self-righteous egos collided constantly, according to “Overhaul,” Rattner’s 315-page account of his leadership of President Barack Obama’s auto task force. This is the first of a series of books about the historic bankruptcies. None will offer more of an insider’s vantage point.

Sergio Marchionne repeatedly threatened to walk away when then-UAW President Ron Gettelfinger resisted even deeper concessions. “Do you think I’m (expletive) stupid?” Marchionne thundered, even when Rattner pressed Fiat to put up a modest amount of cash for Chrysler. Inside the White House, there was a last-minute push by White House economic adviser Austan Goolsbee to let Chrysler die.

Perhaps inadvertently, Rattner reveals his own mistakes. For example, he decided to fire GM CEO Rick Wagoner weeks before doing it, but he had no new leader in mind.

Months after Rattner left to take care of his legal problems, the new GM board lost confidence in Fritz Henderson and turned to Ed Whitacre, who twice told Rattner, “I don’t know anything about cars,” once adding, “I don’t think I’m qualified to do this.”

Race to the courthouse

Chrysler's survival came down to a race to the courthouse, according to "Overhaul."

On April 30, 2009, hours before Obama announced Chrysler would enter bankruptcy with a plan to restructure quickly, Corinne Ball, the attorney charged with orchestrating Chrysler's lightning-fast legal makeover, met with Chrysler's board of directors.

Her message: Thomas Lauria, an attorney ideologically opposed to the government paying Chrysler's lenders less than 100 cents on the dollar, planned to take the company into involuntary bankruptcy, most likely somewhere other than New York, where Ball planned to file the government-backed Chapter 11 petition.

If Lauria filed first, Chrysler's demise became a real possibility. More than 300,000 Chrysler and supplier employees could be out of work immediately. More than 40 banks, hedge funds and three Indiana pension funds would fight over whatever cash an auction of factories, office buildings and shiploads of equipment could bring.

So with the board's approval, Ball jumped on the subway, got off at the Bowling Green stop in lower Manhattan and race-walked into the clerk's office.

Matt Feldman, a task force attorney, learned of Ball's race, but worried that panic would erupt if news of the filing broke before the president could tell the nation that two of the Detroit Three were headed into bankruptcy. The Michigan congressional delegation had learned the night before, but hair-trigger financial markets might react chaotically without the president's context.

"You do not want to pre-empt the president," Feldman told Ball.

Ball, a highly respected bankruptcy lawyer whom American taxpayers would soon be paying more than $900 an hour, wasn't swayed. "You don't understand," she said. "There are reporters all over the place. They saw me go in. We've got to file."

Feldman asked the clerk whether Ball could sit in his office until Obama spoke at 11 a.m. She beat Lauria to the punch. The clerk posted the petition as Obama began to speak. Thus began Chrysler's 41-day bullet train ride to a new life.

Political, financial intrigue

Steven Rattner shows a journalist's eye for detail. After all, he covered the Carter White House for the New York Times in the late 1970s.

"Overhaul" is a feast of political and financial intrigue. Yet it can read like a restaurant review written by the chef. Rattner firmly believes he and his workaholic staffers were saving two American icons and could be making more money elsewhere.

Rattner's frustration with nearly everyone he met at GM is palpable. Along with Harry Wilson, a 37-year-old former Goldman Sachs and Blackstone Group investment banker, Rattner set out to transform General Motors' stodgy, self-satisfied culture in a few short months.

"A top-down, hierarchical approach pervaded those upper floors, where real life dared not intrude," he writes of his first visit to GM's executive suites on the 38th floor of the Renaissance Center. But after firing CEO Rick Wagoner on March 27, 2009, Rattner falls prey to the same indecision he criticized.

When successor Fritz Henderson asks that the word "interim" be dropped from his CEO title, Rattner hems and haws, finally calling uber-wise man and retired General Electric CEO Jack Welch, who tells him Henderson is right. The interim tag is demeaning.

People skills on display

Amid a group of high-powered characters, facing impossible deadlines and with tragedy looming if the task force screwed up, Rattner's steadiness and people skills seem stronger than most. He is quick to credit others.

For example, Jimmy Lee, a high-rolling J.P. Morgan banker, accused Rattner and his partner Ron Bloom of favoring the UAW, whose retiree health care trust was to get 55% of new Chrysler, while lenders were offered 29 cents on the dollar.

Bloom, who has worked for investment banks and unions, looked directly at Lee and said, "I need workers to make cars, but I don't need lenders."

Easy to say when you're armed with $82 billion of taxpayer money.

Within days of GM's bankruptcy exit, and after Rattner's Team Auto hurriedly recruited new directors for Chrysler and GM, Rattner staged his own departure.

Securities and Exchange Commission documents described an executive of Quadrangle Group, the firm Rattner co-founded in 2000, who arranged to pay more than $1 million to secure New York pension business. Unnamed sources told reporters the executive was Rattner. Quadrangle has paid $12 million to settle civil charges against the firm, but excluded Rattner from the agreement. He has not been, and may never be, charged with any wrongdoing.

"During my many years in business, I had certainly been criticized, but I had never before had my integrity questioned," he writes. "Nothing in my entire professional life had been as painful as that episode."

Contact GREG GARDNER: 313-222-8762 or [email protected]