This week represents a major point in time for the post-bailout American auto-industry; the new GM will issue its much anticipated IPO, returning the company to Wall Street.  Many are predicting success for the company in the IPO, including former United States “˜Car Czar” Steven Rattner.

With increasing sales and enormous demand, the stock price is expected to come in higher rather than lower.  365 million shares are expected to move, and after a price range initially set by underwriters between $26 and $29 per share, demand from investors has bumped the range up to  $33 per share.

“This is a new and different GM that will go forth in the public market on Wednesday, and one that has all the tools to be competitive, as I believe as well about Chrysler and Ford,” said Rattner, a former private equity manager who was an adviser to President Barack Obama on the industry bailout.

LET US KNOW WHAT YOU THINK: With Ford stock considered at such a bargain rate right now, would you sink money into GM’s IPO or invest in Ford?

- By: Stephen Calogera

Source: Detroit News

Chrysler Group LLC Headquarters

In his tell-all book due out this fall, former Car Czar Steven Rattner reveals how Chrysler came within a hair of going the way of Lehman Brothers, and being allowed to fail. A majority if the auto task force actually voted against offering aid to Chrysler, and it was only after a tense meeting with the president that Chrysler was offered federal aid.

The story goes back to October of 2008, when after the Senate refused to help Chrysler, then CEO Bob Nardelli tried to urge the Treasury to force GM to acquire Chrysler, but GM hadn”t wanted to get involved in such a deal as they saw the overlap in business of the two companies to be too cumbersome and inefficient. When the merger made no progress, Rattner reports that Steve Feinberg of Cerberus Capital, Chrysler’s owner, called Treasury Secretary Henry Paulson at 2 a.m. on December 19th with an offer to turn Chrysler over to the U.S. government for $1.

It was finally determined that Chrysler was worth much more as an entity alive than it was dead, despite the reluctance of Rahm Emanual and other White House staff to aid the company.

Regardless the case, the book offers tremendous insight into the opinions of high level officials with regard to the bailouts and the unions, and promises to reveal some interesting facts.

- By: Stephen Calogera

Source: CNN

Carlos Ghosn - Nissan/Renault CEO

Earlier this month its was reported that the Obama administration wanted Renault/Nissan CEO Carlos Ghosn to lead General Motors once it came out of a government scripted bankruptcy. The news was made popular by Steven Rattner’s, the former auto czar for President Obama, tell-all book about his six months with the new administration.

Ghosn today confirmed that he was indeed asked by Rattner to become CEO of GM. In an interview with CNN today, Ghosn said that he turned down the offer and said that he had asked Rattner to support a move to include GM in the Renault-Nissan alliance.

“He proposed for me to take the job as CEO of General Motors and I declined,” Ghosn said. “I declined for a very simple reason … We still are in one of the worst downturns that the auto industry has faced in its history and I felt that I can’t quit. I am responsible for Nissan and Renault.”

Ghosn went onto say that in the middle of a “storm — you are in charge. You have to deliver, you have to get the company out of the storm. So it was not the time to leave.”

Ghosn also went on to say that he still believed that a potential tie-up between GM and Renault/Nissan would make sense to “share in the synergies.”

- By: Stephen Calogera

Source: Detroit News

Carlos Ghosn - Nissan/Renault CEO

Steven Rattner was president Obama”s auto adviser who was at the helm of the government”s bailout of Chrysler and GM in 2009. He is now set to publish a tell-all book about his six months at 1600 Pennsylvania Avenue. The book, entitled “Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry.”, is due out in October.

In the book, Rattner explains that Fiat was heavily urged by President Obama to take the reigns at Chrysler, and that Nissan-Renault CEO Carlos Ghosn was the his top choice to run GM, but after being personally offered the position by Rattner, Ghosn said that he felt considerable loyalty to those two companies, especially during the tough economic times.

Rattner had joined the White House auto team after GM and Chrysler were initially bailed out by the Bush administration, and remained through July 2009, after the two emerged from bankruptcy.

In the book, Rattner offers tremendous insight and some gritty revelations as to what government officials really thought about not only the concept of the bailouts, but also the execution.

Rattner also offers his own insights and praises the administration for its assistance of the industry. “I would discover that the struggles of GM and Chrysler were as much a failure of management as a consequence of globalization, oil prices, and organized labor,” he writes in the book. “The auto rescue remains one of the few actions taken by the administration that, at least in my opinion, can be pronounced an unambiguous success. Detroit should count itself lucky.”

Photo Copyright © 2009 Jack Rosenfeld ““ egmCarTech.

- By: Stephen Calogera

Source: AutoWeek

General Motors CEO, Ed Whitacre / Chrysler Group CEO, Sergio Marchionne

Former U.S. Car Czar Steven Rattner said today that GM and Chrysler have performed better than he would have expected them to one year ago. Before speaking at a conference on the auto industry at the Detroit branch of the Federal Reserve, Rattner said that both companies have exceeded the government’s metrics in sales and restructuring.

Rattner said that based on public statements by GM execs, the announcement of a Q1 profit is likely. He also said that based on trading price of old GM’s bond price last week, the government is likely to recover 80% of its $50 billion investment in the company, or $40 billion.

‘Old GM’ includes all assets left behind when the company went through bankruptcy last year. Its bondholders do hold some recovery rights when the ‘New GM’ starts selling stock to the public. The government is among those with such rights, considering its 61% stake in the company.

GM repaid $6.7 billion of the government loans last month.

- By: Stephen Calogera

Source: Automotive News (Subscription Required)

Former Wall Street investment banker Steven Rattner recently quit his job as the auto czar after five months of advising President Barack Obama on what to do with the auto industry. Rattner now spends his time at home helping his son with his schoolwork and spending more time with his family.

Rattner, who is also a former New York Times reporter, is now considering writing a book about his time spent in Washington. The basis of the book would be the 10,000-word article he wrote for Fortune for the Nov.9 issue of the magazine. The article was cut down to 6,000 words.

One of the most interesting parts of Rattner’s article for Fortune is when he gives a behind-the-scenes look at the ouster of GM’s Rick Wagoner.

Here is a quick excerpt from Rattner’s article:

Everyone knew Detroit’s reputation for insular, slow-moving cultures,” Rattner wrote. “Even by that low standard, I was shocked by the stunningly poor management that we found, particularly at GM, where we encountered, among other things, perhaps the weakest finance operation any of us had ever seen in a major company.

For example, under the previous administration’s loan agreements, Treasury was to approve every GM transaction of more than $100 million that was outside of the normal course. From my first day at Treasury, PowerPoint decks would arrive from GM (we quickly concluded that no decision seemed to be made at GM without one) requesting approvals. We were appalled by the absence of sound analysis provided to justify these expenditures.

The cultural deficiencies were equally stunning. At GM’s Renaissance Center headquarters, the top brass were sequestered on the uppermost floor, behind locked and guarded glass doors. Executives housed on that floor had elevator cards that allowed them to descend to their private garage without stopping at any of the intervening floors (no mixing with the drones).

In my relatively few interactions with chairman and CEO Rick Wagoner, I found him to be likable, dedicated, and generally knowledgeable. But Rick set a tone of “friendly arrogance” that seemed to permeate the organization.

You can read more over at CNNMoney.com.

- By: Omar Rana

Steven Rattner, the head of President Obama’s auto task force, will be leaving his position at a time when his private equity firm has been linked to a corruption probe by New York’s attorney general, Andrew Cuomo.

In announcing his resignation on Monday, U.S Treasury Secretary Timothy Geithner said that Rattner will be returning to his private life with his family in New York. Sources close to Rattner said that he does not plan on going back to his former firm, Quadrangle.

“The attorney general’s office has been seeking additional documents from Quadrangle concerning the New York pension fund investments,” a source told Reuters.

Rattner, who oversaw bankruptcies at General Motors Corp and Chrysler Group, has not been accused of any wrongdoing… yet.

- By: Omar Rana

Source: Reuters
Photo Source: Official White House Photo by Pete Souza – Flickr

Chief auto adviser to the U.S. Treasury Department, Steve Rattner, said Friday that GM and Chrysler may need “considerably more” aid than the $21.6 billion the two automakers have requested. Chrysler is seeking another $5 billion while GM is asking for another $16.6 billion. Rattner also gave the strongest hint that the Obama administration will pump more money into the auto industry.

In an interview with Bloomberg Television’s “Political Capital with Al Hunt,” Rattner said that the two the amount the two automakers are looking for “could be considerably higher.”

“What they’ve asked for depends on them achieving plans that are somewhat ambitious,” Rattner said, “We haven’t finished analyzing, and I’m not here to pronounce on them. But like all management teams, they tend to take a reasonably — slightly perhaps — optimistic view of their business.”

Rattner said that Obama’s administration may return to Congress to ask for money for the auto industry and said that it may be difficult to win more money from Congress.

- By: Omar Rana

Source: Detroit News

Steven Rattner, the U.S. Treasury’s main advisor when it comes to the automotive industry, said today that Obama’s auto task force is avoiding bankruptcy as an option for GM and Chrysler. The news comes just days after the auto task force hired bankruptcy lawyer Matthew Feldman to advise it on its options.

“Bankruptcy is not our goal,” Rattner said in an interview with Detroit Free Press. “I”ve been in and around bankruptcy for 26 years as part of my private-sector work. It is never a good outcome for any company, and it”s never a first choice.”

Rattner said that even though bankruptcy is “sometimes necessary in order to solve problems,” the auto task force is focused on solving the auto industry problem outside bankruptcy.

He said that the auto task force is moving quickly to meet the March 31 deadline but said that decision on additional government loans for GM and Chrysler could come at a later date. Both automakers are seeking an additional $21.6 billion in aid.

- By: Omar Rana

Source: Detroit Free Press

Chrysler’s CEO Bob Nardelli said that the potential partnership deal with Fiat could save 5,000 North American manufacturing jobs and could be worth up to $10 billion.

“We estimate the cash value of Fiat’s contribution to be between $8 and $10 billion considering the cost to develop these vehicles, platforms and powertrains from scratch,” Nardelli said in a e-mail to Chrysler employees.

The $10 billion value comes from the areas of purchasing, engineering and contribution of technology Nardelli said.

Those familiar with deal already know that Fiat has agreed to take a 35 percent stake in Chrysler without any cash investment. The deal would give Chrysler access to fuel-saving Fiat technologies and the overseas market.

In a separate report, the Obama Administration hasn’t decided to approve the tie-up between the two automakers. According to the top U.S. Treasury Secretary advisor Steven Rattner, the administration is currently reviewing the deal.

“We need to understand better where Fiat is at and whether that is potentially a realistic deal or not before we know where to go next on that one,” Rattner said.

Source: Detroit News

According to a press release by New York law firm Willkie Farr & Gallagher LLP, President Obama’s auto task force has hired bankruptcy lawyer Matthew Feldman to advise it on its options.

The firm said that Feldman will be responsible for advising the U.S. Treasury Secretary Timothy Geithner and the National Economic Council Lawrence Summers on “reorganization efforts by auto manufacturers and suppliers. Willikie said that Feldman will leave the firm by the end of this month to start his position in Washington.

The auto task force faces a March 31 deadline to determine whether or not GM and Chrysler can be financially viable in the long-term and whether or not they deserve additional government aid. The two automakers are looking for another $22 billion in government loans.

The auto task force was in Detroit earlier this week meeting with the two automakers and UAW President, Ron Gettlefinger.

We’re just 17 days away from March 31 and this is beginning to be a nail-biter for us.

- By: Omar Rana

Source: Reuters

While some of you are wondering where our visitor zermatt is (zermatt being a very analytical individual who we feel is a great addition to our community), we’re guessing he’s unwinding after a very tiring visit to Detroit on Monday where President Obama’s auto task force visited General Motors and Chrysler.

Either way, the auto task force has left Detroit and we’re all left wondering – “so what did they think?” Are they going to call back $17.4 billion or are GM and Chrysler going to get additional loans that can total up to $21.6 billion.

According to AutoObserver, the auto task force, none of whom have any auto industry experience and happen to own foreign made vehicles, are not providing any hint about their thoughts on their Detroit visit or what they plan on doing for GM and Chrysler’s financial situation once the March 31 deadline arrives.

All we know is they visited GM executives and test drove a Chevrolet Volt, visited Chrysler’s Nardelli/LaSorda/Press and a Dodge pickup plant, followed by a two-hour meeting with UAW President Ron Gettlefinger.

Obama’s administration told reporters that the trip “was a success and the White House understands the need for urgency and deliberation and the task force will work ‘around the clock’ on industry issues.”

GM’s said that it was “pleased to host the task force so they could experience firsthand the new products and technologies that are an integral part of GM’s near- and long-term competitiveness. We look forward to continuing to support the efforts of the task force as they move quickly to address their critical tasks.”

Guess we’ll all find out the outcome on March 31.

Source: AutoObserver

As we told you last week, President Barack Obama’s auto task force will be headed to Detroit today to meet with executives from General Motors and Chrysler. Advisers Steve Rattner and Ronald Bloom will visit GM’s technical center in Warren and will also pay a visit to Chrysler’s truck assembly plant. They will also hold a meeting with UAW President Ron Gettelfinger.

According to White House officials, the trip will also include a trip to GM’s test lab where the Volt is being developed. GM has also set up a test drive in the Volt prototype hoping to impress the auto task force. We wonder if Chrysler will setup a test drive of their 200C EV.

So far the advisers have spent more than two weeks (allegedly working day and night) holding meetings with industry executives and analysts.

GM and Chrysler are seeking up to $21 billion in additional aid. The two have already received a total of $17 billion in government loans. On March 31, President Barack Obama will decide to approve or reject restructuring plans that the two companies submitted in February.

Source: Detroit News

According to White House spokeswoman, Barack Obama’s administration is working “around the clock” to form a solution to the problems being faced with General Motors, Chrysler and the auto industry.

“The administration is very mindful of the challenges in the auto sector,” the spokeswoman said. “Our team is working around the clock to develop the most thoughtful approach possible to the situation.”

Leaders from Obama’s auto task force will be heading to Detroit next week to meet with auto industry and labor officials. They will discuss the danger of an immediate collapse of GM and Chrysler if loans do not come by the end of this month.

Steven Rattner and Ron Bloom will be heading to Detroit with members of the U.S. Treasury. A spokesman from the White House said that final details of the trip are still being worked out.

Source: Detroit Free Press

During his meeting with Obama’s auto task force, Fiat CEO Sergio Marchionne said that his company will “add value” to Chrysler through an alliance supported with government loans. After his meeting with Steve Rattner and Ron Bloom, advisers to the U.S. Treasury, Marchionne told reporters that he was encouraged by the groups engagement with the auto industry problems.

“We think we are adding significant technology and products to the offerings of Chrysler,” Marchionne said. “With them they get a fair chance” of making it out of their current situation, reports Automotive News.

Marchionne said that in return for a 35 percent of Chrysler Fiat will provide “cash equivalents” consisting of small car platforms and fuel-efficient technologies. He said that Fiat will not inject any cash into Chrysler.

Chrysler so far has received $4 billion in government loans and says it needs another $5 billion by the end of March.

According to a Toyota spokeswoman Martha Voss, a top U.S. Toyota executive will meet with Obama’s auto task force next week. She emphasized that the Japanese automaker is not seeking any loans from the U.S. government and is not trying to influence the U.S. Treasury Department’s decision for the U.S. auto industry

Voss said that Jim Lentz, president of Toyota Motor Sales in the U.S., will meet with the task force in Washington.

“This is really an introductory visit,” Voss told the Detroit News. “It is common practice for us to ‘make the rounds’ when a new administration and a new Congress come into power. We want to introduce ourselves and talk broadly about the state of the industry.”

Source: Detroit News

Following Chrysler’s meeting with Obama’s auto team yesterday, General Motors today wrapped up a 6-hour meeting with members of U.S. Treasury Department and the White House National Economic Council. GM’s CEO Rick Wagoner, COO Fritz Henderson and CFO Ray Young were among the executives that attended the meeting. Among the points discussed were GM’s request for an additional $16.6 billion in aid. Of course, we’re pretty sure that GM’s fourth-quarter results were also discussed.

According to GM spokesman Greg Martin, the meeting “was just the beginning of the hard work ahead for GM and the President’s team.”

“We found a genuine willingness among the Task Force to understand our business, industry challenges, and GM’s restructuring plan,” said Martin. ”We look forward to working closely with the task force as we continue our efforts to transform GM”

Steve Rattner, the head of the auto team and Ron Bloom, a special adviser to the Treasury on autos, attended as well.

We’ll bring you more details as we get them.

Source: Detroit News

Chrysler’s main executives will be meeting with the Obama auto task force today. CEO Bob Nardelli, vice chairman Tom LaSorda and CFO Ron Kolka will all be meeting with the members of the U.S. Treasury Department’s auto team and the White House National Economic Council. No word on whether Jim Press will also attend.

The guys that Chrysler need to watch out for? Attending the meeting will be U.S. Treasury Secretary Timothy Geithner, former Wall Street financier Steven Rattner and Ron Bloom, who is a special adviser to the U.S. Treasury on the auto industry.

Today’s meetings will include going over Chrysler’s long-term viability plan and its request for an additional $2 billion in loans. Chrysler said yesterday that cash could fall to $1.3 billion at the beginning of April, below the $2.5 billion it needs to operate.

General Motor’s executive team will meet with the Obama auto task force tomorrow.

Source: Detroit News