Rattner's Memoir Opens Curtain on Auto Bailouts

WASHINGTON - The Obama administration vetoed attempts by General Motors to abandon its Detroit headquarters, a new book by a former top auto adviser reveals.

The revelation comes in a 320-page memoir by Steven Rattner, who was President Barack Obama's auto adviser for six months last year, and helped shepherd the $85 billion government bailout and bankruptcies of GM and Chrysler, The Detroit News reported.

"Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry" also discloses Rattner secretly forced out GM Chairman Kent Kresa in June 2009, and offered GM's top job to Renault-Nissan CEO Carlos Ghosn.

The book paints a critical portrait of Chrysler Group LLC CEO Sergio Marchionne, other top executives and many in the government.

A draft manuscript was made available to The Detroit News by publisher Houghton Mifflin ahead of its Oct. 14 publication date.

Written with the help of a veteran auto journalist, Jeffrey McCracken, and Sadiq Malik, a former auto task force staffer, Rattner's memoir offers new evidence that the Obama administration's influence on the Detroit automakers was larger than previously revealed.

In addition to the government's role in personnel matters, and in keeping GM in Detroit, the book discloses the White House initially planned for a $100 billion bailout, but the aid package GM, Chrysler and their affiliated finance companies eventually came in at $85 billion.

The administration also considered a $10 billion fund to help auto suppliers -- but cut it to $5 billion -- and weighed but discarded a plan to provide funding to help suppliers go through bankruptcies.

Before his ouster as GM's CEO, Fritz Henderson proposed moving GM headquarters from Detroit's Renaissance Center to the automaker's Tech Center in Warren, arguing it would save money, and symbolize a commitment by the company's leadership to be more hands-on managers.

Rattner praised the idea. But a White House aide, Brian Deese, who has been heavily involved in auto policy, denounced it.

"Are you out of your mind?" Rattner quoted Deese as saying. "Think what it would do to Detroit."

Henderson proposed donating the iconic headquarters on the Detroit River to the city. Detroit received $20 million in tax revenue from GM.

The White House even commissioned an outside analysis of the impact a move would have on Detroit property values, Rattner wrote. The answer: an estimated "double-digit hit on already deflated real estate prices."

Leaving the RenCen "made a lot of strategic sense," Rattner wrote. But Michigan native Gene Sperling, a U.S. Treasury Department official, was one of many who fought the idea.

"It's over for Detroit if you do this," Sperling yelled in a meeting, Rattner recalled. "Don't do this to (Detroit Mayor) Dave Bing... He's a good man trying to do a good thing."

The request was passed up the chain to White House Chief of Staff Rahm Emanuel, "and word came down that the move would be a bridge too far," Rattner wrote.

"Fortunately, this unique intervention into a specific GM matter was never leaked to the press, saving us from having to explain how it comported with our policy of letting GM and Chrysler manage their own affairs."

In a Detroit News interview earlier this year, Henderson confirmed his interest in moving GM headquarters, but White House involvement has never been publicly reported.

Neither the White House nor GM would comment on Rattner's account.

"The book is history," said GM spokesman Greg Martin. "We're a new company and we have too much work to do and no time for book reviews."