The Obama administration’s autos task force leader has stepped down following General Motors and Chrysler emerging from bankruptcy protection under government-backed initiatives, officials said.
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Task force leader Steven Rattner, co-founder of a private equity group, will be replaced by task force member Ron Bloom, a one-time investment banker who joined the steelworkers labor union and helped restructure the US steel industry, AFP reported.
“With the emergence of both General Motors and Chrysler from bankruptcy, we enter a new phase of the government’s unprecedented and temporary involvement in the automotive industry,” treasury secretary Timothy Geithner said in a statement.
“We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalise GMAC, and support the American auto industry.
“Ron Bloom will assume leadership of the task force’s activities as the government transitions its role away from day-to-day restructuring to monitoring this vital industry and protecting the substantial investment the American taxpayers have made in GM, Chrysler, and GMAC.”
Geithner said that with the help of the task force, “GM and Chrysler have achieved a quick restructuring, and the economy avoided the devastation that would have accompanied their liquidation.”
“Steve’s expertise was a key contributor toward a new GM emerging in record time,” said GM president and CEO Fritz Henderson.
“His leadership of the Auto Task Force helped support our making the difficult commercial decisions that are necessary to re-invent GM.
“We also have an excellent working relationship with Ron Bloom and look forward to the opportunity to continue working with him and other members of the Auto Task Force to make GM a viable and globally competitive company.”
Reuters said Rattner had left at a time when a probe into how the private equity firm he co-founded gained New York pension business had intensified.
Geithner said the investor would be returning to private life and his family in New York while a news agency source close to Rattner said he did not plan to rejoin his former firm, Quadrangle.
Rattner, a former journalist, made his name as a media banker and co-founder of media-focused private equity fund Quadrangle, and surprised Wall Street when he took the government auto role in February.
Quadrangle and Rattner have in recent months been linked to a corruption probe by New York’s attorney general, Andrew Cuomo, into the pensions industry.
A source familiar with the matter told Reuters Cuomo’s investigation of Rattner had “intensified” in recent weeks.
“The attorney general’s office has been seeking additional documents from Quadrangle concerning the New York pension fund investments,” the source said.
Rattner and Quadrangle have not been accused of wrongdoing.
The pensions scandal involved allegations that high powered political lobbyists were paid by private equity firms to pull in pension fund business from New York and other state pension funds.
The investigation has already led to the indictment of several of those involved, including Henry Morris, who was the former state comptroller’s top fund-raiser.
When the controversy broke in April, US President Barack Obama stood by Rattner, saying he had not been accused of wrongdoing.
There was no indication from administration officials that the state pension probe was connected with Rattner’s departure from the task force, Reuters noted.
Rattner is the person identified only as a “senior executive” of Quadrangle Group in an SEC complaint against two former New York political officials and others, a source previously told Reuters.
Treasury spokeswoman Meg Reilly told the news agency: “Steve’s decision to leave is the first step in a planned scaledown of the task force and there will of course be more departures in the future. It was always part of the plan to downsize once Chrysler and GM emerged from bankruptcy.”
An administration official added that Rattner’s departure represented the start of a long-planned wind-down of the autos panel, which was formed in February to restructure GM and Chrysler.
Last week, Rattner likened the post-bankruptcy operating strategy of the task force to that of an institutional investor that holds a large stake in a public company. It aims to look after the taxpayers’ investment without meddling in operations, exercising voting power to approve board members, but not other company decisions.
