Steve Rattner, the managing partner of a $6 billion New York hedge fund, will lead the Treasury Department’s auto efforts, an official said Monday.
Rattner will join the Treasury Department as counselor to Treasury Secretary Timothy Geithner, “where he will serve as an adviser on a variety of economic and financial matters, and will lead the Treasury’s efforts with regard to the automobile sector,” an administration official said today.
Geithner and White House National Economic Council director Larry Summers will co-chair the Presidential Task Force on the Auto Industry. Geithner is the president’s designee for purposes of enforcing the $17.4 billion in loan agreements with General Motors Corp. and Chrysler LLC.
Rattner, a former New York Times reporter, had been widely viewed as a candidate for car czar in recent months. Rattner was managing principal of Quadrangle Group LLC, which has investments in at least 20 media and communications companies as part of its private equity business. His name and biography have already been removed from Quadrangle’s Web site. He stepped down from the firm today.
Rather than a car czar, President Barack Obama opted to appoint a 10-person cabinet level task force and named 10 key staff members to assist the task force.
GM says it needs $2 billion in March and $2.6 billion in additional loans in April to survive, while Chrysler says it needs $5 billion by March 31. The auto task force must also decide whether to loan billions to struggling auto suppliers.
Rattner’s Quadrangle Group was involved in a poorly faring transaction with Chrysler’s parent, Cerberus Capital Management LP. Cerberus owns much of $125 million debt Quadrangle raised in its 2007 purchase of Alpha Media Group, which publishes Maxim magazine. Quadrangle has written down the value of its investment and may turn over Alpha to its creditors.
Rattner was previously deputy chairman and deputy CEO of Lazard Frères & Co. LLC. Rattner was previously a managing director at Morgan Stanley, where he also founded the Communications Group.
He will work with Ron Bloom, a special assistant to the United Steelworkers president, who is now working as a special adviser to the Treasury on auto issues
Still unclear is whether the Treasury Department will also add Steve Girsky to its auto team. Reached by e-mail Monday, Girsky referred questions to the Treasury Department.
Girsky, a longtime auto-industry analyst who heads the private-equity firm Centerbridge Industrial Partners, is a former GM consultant who has recently advised the United Auto Workers on issues including automaker efforts to obtain federal loans.
Several other Treasury Department consultants are involved in auto efforts as well, including Alan Krueger, a Princeton University economist, who is expected to be nominated as an assistant secretary. Lee Sachs, who has been reported to be nominated undersecretary for domestic finance, is working on auto finance company issues, people familiar with the matter said.