Rattner praises Chrysler exit

The Obama administration's top auto adviser says Chrysler LLC's quick exit from bankruptcy offers optimism that General Motors Corp. can follow suit.

In a wide-ranging interview Monday, Steve Rattner said Chrysler's emergence from bankruptcy in just 42 days had gone almost exactly to form.

"We found that the game plan that we had designed back in the March time period actually worked," Rattner told The Detroit News. "It's like you build a new car and you take it out and you test drive it and it actually works. It made us feel pretty good going into GM -- even though we know GM is bigger and more complicated -- that we should be able to accomplish a similar result albeit over a slightly longer period of time."

GM filed for bankruptcy on June 1 and hopes to exit in two to three months. GM faces a key June 30 hearing on its plans to emerge from court protection. The administration has vowed to help GM with another $30.1 billion in restructuring aid.

Rattner praised the management of Chrysler Group under Fiat SpA Sergio Marchionne, who took over as CEO last week. Marchionne unveiled a management shakeup and met with senior managers in Auburn Hills over the weekend about the company's future. The auto task force did not participate.

"The energy that Sergio has brought in going after this and his own personal commitment and time he's spending in Auburn Hills is very heartening," Rattner said.

Rattner reiterated comments he made last week that GM's culture needs to change.

"We get it when people tell us that the culture of GM needs to change," Rattner said. "We agree. The management change that the president announced back on March 30 was the first step of that. Fritz is doing a great job of embracing the need for change, but now it has to happen."

GM CEO Fritz Henderson replaced former chief Rick Wagoner, who was ousted by President Barack Obama. Henderson acknowledged last week, after a meeting with the task force, the need for culture change at GM and that he expected to remain CEO after the company emerged from bankruptcy.

Rattner said that Henderson's status is no different than any other CEO. "He has thrown himself into the job with a great deal of energy and open-mindedness and that's all very promising," he said.

A senior administration official, speaking on condition of anonymity, said it was clear Chrysler needed new leadership and that the jury was still out on whether Henderson was the right man to change GM.

"(Former Chrysler CEO) Bob Nardelli was a very dynamic and driven leader and did a very good job playing a tough hand of cards, but I think with the new team we're getting a whole fresh approach and the kind of change that I think we feel the company needed," the official said.

The auto task force met twice last week with trade associations for suppliers, who have sought another $10 billion in emergency aid. Rattner said they were studying the issue "extremely closely," but did not commit to additional funds.

The administration created a $5 billion program in March to guarantee the receivables of auto suppliers; the program is managed by GM and Chrysler.

Rattner said the government would support any bidder for Delphi Corp.'s assets. GM's former parts unit has struggled to emerge from bankruptcy since it filed in October 2005. Last week, a federal bankruptcy judge ruled that Delphi must have an auction of its assets -- set for July 23 -- rather than immediately proceed with a $3.6 billion deal to sell them to an affiliate of Platinum Equity.

"We really are completely agnostic as to how Delphi's problems are solved," Rattner said. "We are only focused on the importance of getting them solved because of GM and the critical interrelationship of certain parts of Delphi with GM."

He rejected criticism that the administration had used bankruptcy law to force unfair concessions on secured creditors. "This idea that we broke bankruptcy law or made new law is ridiculous," Rattner said.

The administration opposes proposed legislation that attempts to force the reopening of Chrysler dealers and prevent GM from closing dealers.

"Our view is that both companies have announced very thoughtful, measured, fair restructuring plans with shared sacrifice," Rattner said. "Now they should be left alone to implement them."

That's not the only measure on Capitol Hill dealing with the Obama administration's handling of the auto industry. Sen. John Thune, R-S.D., joined by two Republican colleagues, held a press conference last week introducing a bill that would require the Treasury to sell its stakes in GM and Chrysler by July 2010.

Rattner said the government would look to sell its auto stakes as soon as possible.

The Treasury is swapping about $42 billion in debt for a 60.8 percent equity stake in GM.

Rattner said the administration agreed with the call for "transparency" in overseeing GM from Ford Motor Co. Executive Chairman Bill Ford Jr., who addressed the National Summit on the economy in Detroit on Monday.