Steven Rattner
Steven Rattner
Steven Rattner has some strong opinions about the auto industry.
You might recall that Rattner served as lead auto adviser in the Obama administration when the economy tanked and General Motors and Chrysler were baby steps away from collapsing and vanishing forever.
In 2008, Mitt Romney wrote a New York Times Op-Ed column saying the U.S. should "Let Detroit Go Bankrupt."
Rattner writes in an Op-Ed piece in the New York Times:
This year’s Republican nominees have echoed Mr. Romney.
“You could have let it go bankrupt, frankly, and rebuilt itself, and a lot of people felt it should happen,” Donald Trump said last summer, adding that, without government assistance, the industry would be in the same situation. His running mate, Gov. Mike Pence of Indiana, opposed government intervention and continued to hold that position afterward. “It still would have been better if G.M. had gone through an orderly reorganization bankruptcy without taxpayer support,” he said in 2010.
Just as Mr. Romney was wrong eight years ago, so, too, have Mr. Trump and Mr. Pence been wrong more recently. I know, because as lead auto adviser in the Obama administration, I was there. In late 2008 and early 2009, when General Motors and Chrysler exhausted their cash reserves, traditional sources of private capital that typically provide liquidity to companies during a bankruptcy reorganization fled to the sidelines.
Donald Trump at the Detroit Economic ClubWithout government assistance (provided first by President George W. Bush and then by President Obama), the giant automakers would have been forced to stop production, lay off their workers and close their doors. The ripples would have cascaded through the auto industry, causing already strapped suppliers to shut down as well. With the flow of parts interrupted, other manufacturers, including Ford, would have been compelled to halt assembly, at least for a time.
Rattner insists that Trump has a history of spewing inaccuracies about the auto industry, writing:
Mr. Trump’s confusion about the automobile industry extends well beyond bankruptcy questions.
In 2013, he tweeted, “After Obama bailed out G.M. for $80 billion, 7 of 10 G.M. cars made in China!” Wrong on multiple counts. It wasn’t $80 billion; it was $49.5 billion for G.M., of which $13.4 billion was provided by the Bush administration. (Another $30 billion was allocated to Chrysler and the automobile finance companies.) Nor are most G.M. cars made in China; in fact, hardly any General Motors cars made in China are brought to the United States.
Rattner ends by writing:
Had Mr. Trump’s vision of a free-fall bankruptcy been implemented, a result would have been a dramatically shrunken American auto industry and even more of those job-killing imports that he claims to detest.
