Steven Rattner, former head of President Barack Obama’s auto task force, acknowledged in a declaration he instructed General Motors not to commit money to a pension fund for some former employees.
The instruction was issued during the automaker’s 2009 bankruptcy and now republican lawmakers have criticized the decision as an example of overly deep meddling by the Obama administration in private business.
“The administration picked winners and losers,” Congressman Michael Turner, a Republican from Ohio, said during the hearing on the matter.
“We concluded it was not commercially reasonable,” Steven Rattner, who directed the bailout of the auto sector during the height of the nation’s financial crisis, told the U.S. House of Representatives hearing.
“It is not easy to make these kinds of decisions under any circumstances; it was particularly challenging in the crisis atmosphere GM was facing at the time,” Rattner told lawmakers.
Rattner and other members of the task force defended their decisions, telling lawmakers their job was to make sure GM emerged from bankruptcy as a viable company. Had the automaker disappeared, many other companies in the auto industry would also have gone under, they said. That would have worsened what was already a deep recession.
Under the bailout, which involved the company going bankrupt and the U.S. government paying some $50 billion to take ownership of it, the automaker agreed to fully fund pension obligations of former employees who were members of the United Auto Workers union and had worked at GM’s Delphi unit before it was spun off in 1999.
) - Thursday, September 12th, 2013 - filed under General Motors
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