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New car czar is a union man
By: J.P. Freire and David Freddoso
Washington Examiner
07/13/09 6:54 PM EDT
After just five months on the job, President Obama's "Car Czar," Steven Rattner, is quitting. An administration official gives Politico this terse explanation: “He determined that this was the right decision for him and his family at this time." His replacement, a six-figure official with the Steelworkers' Union named Ron Bloom, is already waiting in the wings. It sounds like a firing, but if the GM and Chrysler deals turn out poorly, Rattner will probably be happy he's already gone.
Bloom's relevant experience appears to be negotiating for unions with troubled companies, and so it would be useful to know his approach. Thanks to an old Time magazine collection of quotes, here it is: "Let me give you some advice. First, we are big believers in dentist chair bargaining. For those of you not familiar with this approach, it is inspired by the story of the man who walks into his dentist's office, grabs the dentist by the balls and says, 'now, let's not hurt each other.' We do have a lot to lose and we and everybody else knows it. But what you need to understand is that we are willing to lose it." — Prepared remarks for a speech to an International Association of Restructuring, Insolvency & Bankruptcy Professionals conference in Scottsdale, Ariz., May 21, 2006
The president of the United Steelworkers, Leo W. Gerard, said of Bloom in a New York Times piece: "He’s going to Washington to help the administration sort out problems, and that’s his gift,” said Leo W. Gerard, president of United Steelworkers. “Ron has been a problem solver. He has worked on 50 bankruptcies over the last 20 years. He has a lot of experience and knowledge. There’s a big problem — we want to save the auto industry in America — and that’s what Ron is going to help them do."
But will he be saving the industry, or helping the unions perpetuate its woes? So far, the Obama administration's "bankruptcy negotiation" technique has amounted to strong-arming and ruining the reputations of senior creditors who resist being written out in favor of unions. With the choice of Bloom, it is more obvious that the unions now sit on both sides of the negotiating table. Unless, that is, you believe an administration that fires CEOs is not really running the auto industry in which it owns a huge stake.
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