The Anonymous Coward Returns

The White House was okay with Robert Gibbs attacking the Professional Left and their Catfood Commission Co-Chair attacking, well, everyone.

But they wouldn’t let Steven Rattner’s claim that Rahm Emanuel had attacked the UAW go unanswered.

Rattner depicts White House Chief of Staff Rahm Emanuel as a force to be reckoned with who disparaged unions — once quipping “Fuck the UAW” — and who effectively supervised Treasury Secretary Tim Geithner during his first rocky months on the job by dictating his public appearances and staff picks.

However, unlike Rattner, who put his name to his version of Rahm’s attack on the UAW, the White House push-back was done under the cover of cowardly anonymity.

A senior White House aide emails: “Throughout the entire process that saved the auto industry, Rahm tirelessly defended and advocated on behalf of the auto workers. Any suggestion to the contrary is simply ridiculous.”

Uh-huh. So ridiculous that it couldn’t be said on-the-record.

About that “Fuck the UAW” Tax

In honor of Steve Rattner’s revelation that Rahm Emanuel wandered around during the auto bailout saying “fuck the UAW,” I’ve renamed the “Cadillac tax” the “Fuck the UAW” tax.

Which is appropriate timing given that the Kaiser Family Foundation is out with a study today they should have done during the health care debate, showing that employers have been shifting health care costs onto employees.

The premiums that employees pay for employer-sponsored family coverage rose an average of 13.7 percent this year, while the amount that employers contribute fell by 0.9 percent, the survey found.

For family coverage, workers are paying an average of $3,997, up $482 from last year, while employers are paying an average of $9,773, down $87, according to the survey by the Kaiser Family Foundation and the Health Research & Educational Trust.

The best part of the WaPo coverage, though, are the quotes from KFF President Drew Altman playing dumb.

“Many employers looked into their recession survival kit and seem to have concluded that one way to make it through the recession and hang on to as many employees as possible was to pass on their health premium increases to their employees this year,” Kaiser Family Foundation President Drew Altman said by e-mail.

How much, if at all, the federal health-care overhaul enacted in March will restrain cost increases over the long run remains to be seen. While experts debate its likely impact, the legislation is “the only thing we have coming on line as a country to control costs other than what now seems like the primary default strategy in the private sector – shifting costs to people,” Altman said.

You see, the trend of employers shifting costs onto employees was readily apparent last year, when Jonathan Gruber and the Administration and health care reform boosters were using MagicMath to claim that not only would the “Fuck the UAW” tax save money, but that workers would end up with higher wages.

In fact, this behavior has been going on for decades, and it is precisely what the Fuck the UAW tax is designed to incent: boosters—some funded by the KFF–routinely argued that if employers passed more costs onto employees, they would become more sensitive to cost, and use less care (the entire debate sidestepped the question of whether incenting less care was useful, particularly for those with chronic conditions), thereby lowering health care costs overall. And this hocus pocus logic is–aside from laudable changes to Medicare delivery–the biggest cost “savings” in the health care reform bill. But the KFF poll appears to undercut the assumptions that went into the bill (notably, that employees would benefit from this scam).

And KFF President Drew Altman has the audacity to say that the health insurance reform bill is “the only thing we have coming on line as a country to control costs other than what now seems like the primary default strategy in the private sector – shifting costs to people,” without admitting that one of the biggest cost control strategies in the health insurance reform bill is to shift costs to people!

Ah well. An Administration whose Chief of Staff wanders around saying “Fuck the UAW” probably doesn’t consider union members real people anyway.

Bob Lutz Hangs Up On Ed Whitacre’s GM

The inevitable has been announced; Bob Lutz is leaving Ed Whitacre’s new General Motors. From the New York Times:

Vice Chairman Bob Lutz will retire from the automaker effective May 1, people briefed on the plans said on Wednesday.

Lutz, 78, had been serving as a senior adviser to GM Chairman and Chief Executive Ed Whitacre after shelving retirement plans to take charge of the automaker’s marketing after it emerged from bankruptcy in July 2009.
The announcement comes a day after GM shook up its sales and marketing operations in its home market for the third time in five months.

Lutz was charged with overhauling GM’s marketing efforts under former CEO Fritz Henderson, but he appeared to have been sidelined by Whitacre, a former AT&T executive brought in by the Obama administration.

In late February, Whitacre named Stephen Girsky, a former investment banker, as special adviser and vice chairman in charge of corporate strategy, a move that raised questions about the tenure and role of Lutz.

And it really was inevitable. Last December when Fritz Henderson was unceremoniously dumped in a midnight putsch by Ed Whitacre, the former corporate phone boy from AT&T, we had some things to say here. Marcy, noting Whitacre’s professed desire to ram products to market quicker – to do everything quicker – observed:

Now maybe it would be possible to bring out new products more quickly. Maybe there is merit to disrupting the very complex model year and product cycle schedules that every car company relies on to manage new product introductions.

But I worry that this push to introduce products more quickly will come at a price–the price of doing it right, both from an engineering perspective (you don’t want the Cruze to come out with all sorts of recalls, after all) and from a marketing perspective (if you introduce a product but don’t have the marketing budget to support it, it’s not going to do much good).

And I commented that the Whitacre putsch had other consequences too:

There is one other consideration. With Fritz gone, the only marketable face GM has left to the actual auto people is Bob Lutz, and he will bolt in a heartbeat if he thinks the wrong car decisions are being made. Lutz is very comfortable with the big money wheeler dealers, but he is, first and foremost, a car guy all the way. And he does not need the money or grief. If they were to lose Lutz in any short order in addition to Henderson, they will have a potential real mess.

Well it turns out the thoughts may have been prescient. And make no mistake, Lutz is in fine health and as active and ornery as ever; he is leaving because Read more

Car Recovery Czar Ed Montgomery Comes to Michigan

In a little noticed detail from Monday’s verdict on the auto industry, Obama named Ed Montgomery Director of Recovery for Auto Communities.

Today, the President appointed Ed Montgomery, former Deputy Secretary of the Labor Department and current Dean at the University of Maryland, to become Director of Recovery for Auto Communities and Workers. Dr. Montgomery has more than 25 years experience working on issues related to worker training and local economic development and has worked first hand with State and local government agencies and nonprofits in Michigan and Ohio on strategies to revitalizing areas hit by job loss.

In his new role, Dr. Montgomery will bring all parties – workers, firms, unions, other private sector employers, community-based organizations, state and local governments, and foundations – to the table to maximize communication and cooperation and to develop innovative strategies for relief and recovery. He will ensure that communities and workers can take full advantage of all available resources and to ensure that the funds are distributed quickly, efficiently and equitably He will work with the Administration, relevant Governors and Congressional leaders to launch new executive and legislative initiatives to support these distressed communities and help them retool and revitalize their economies. He will identify and pursue all possible opportunities, including for example,
initiatives to:

  • Maximize the effectiveness of Recovery Act funds for new and more diverse economic development for new jobs, business and industry through various means including local infrastructure, housing, education and new industry.
  • Deploy rapid response unit to communities facing plant closings to both meet immediate needs and to develop strategies for new job growth.
  • Extend Trade-Adjustment-Assistance (TAA) to the auto industry, including retraining, healthcare extensions, income support and wage insurance.
  • Attract major defense, research, green industry and other project to the region. Channel Workforce Investment Act (WIA) and other emergency grant funds to the region.
  • Work with stakeholders to develop new legislative efforts to direct emergency support to affected communities and regions, and bring new jobs and economic opportunities to these areas. 

Today, Montgomery met with Governor Granholm (and, after this presser, with Detroit Mayor Ken Cockrel) to talk about the needs of Michigan’s blighted auto communities.

Montgomery strikes me as a good choice. Unlike Steven Rattner, Montgomery has the background to understand Michigan’s issues (and once taught at MSU), and the bureaucratic chops to actually do some good.

As he explained in the video above, his wife’s family is an auto family. Read more

Where’s the Guy Who Doesn’t Know $hit about Wall Street?

Steven Rattner doesn’t know shit about cars.

Or at least he didn’t a month and a half ago. And then, President Obama decided he was the single best person in the country to lead the auto task force–to assess the state of the auto industry, figure out whether letting one or both of the failing companies go under, and if not, how to bring them out of their doldrums.

Frankly, I’m unconvinced Rattner was the guy to assess and guide the auto restructuring–mostly though because he seems to have gotten picked because he’s a schmoozy insider with a great talent for self-promotion. But I do appreciate this qualification of Rattner’s:

"What I bring to this is the advantage of no preconceived notions. I don’t come with an embedded view," Rattner said in an interview, calling the job "the most complex challenge I’ve ever had to deal with."

And here’s another "qualification," pitched by his buddy Steven Weisman:

"He may not have had a particular history of interest in the auto industry, but he would bring the ability to ask basic questions and try to get basic answers and drive toward the agreement on a solution."

Sean McAlinden, who does know the auto industry, reports that at least Rattner has been learning quickly.

Now like I said, I’m not convinced having someone who is totally ignorant about an industry is the best person to come in and try to rescue it. But at the very least, having someone as ignorant as Rattner go through the process of learning about the auto industry may help Obama to rethink his significant preconceived notions about why the auto industry is in trouble and what to do about it. 

I realized today–as I was doing a radio interview about AIG bonuses with Nancy Skinner, also in MI–how dramtically different Obama’s approach to assessing and resolving the finance industry (the folks who, after all, caused many of the more urgent woes of the car companies). 

Obama’s first instinct in assessing the auto industry was to bring in someone who was completely ignorant of the industry, to ask questions. Read more

Steven Rattner?!?!?!

I’m with Josh. I’m not sure an expert in complex financial instruments is really what Detroit needs in an auto czar.

Democrats tell ABC News successful private equity investor Steve Rattner of the investment firm Quadrangle Group has emerged as President-elect Barack Obama’s leading candidate to be "car czar."

Known for brokering investment media deals, Rattner began his career as a reporter with the New York Times before leaving for the greener pastures of Wall Street. There, he rose quickly at places like Lehman Brothers, Morgan Stanley, and Lazard Frères. Mr. Rattner is highly regarded for his financial acumen — so highly that a year ago, New York Mayor Michael Bloomberg put his fortune — estimated to be worth as much as $13 billion — in Rattner’s hands.

Here’s the best part–someone who will fit in the Mid-Western culture of Detroit perfectly.

In Autumn of the Moguls author Michael Wolff described Rattner as "very smooth" with a mien of formality, reserve, efficiency, and soft-spokenness. "He is a kind of perfect museum-board member," Wolff wrote.

I remember the first time I got taken to a girlie bar in Thailand to watch Formula One with colleagues; I felt like I had finally lost my auto industry virginity (and, since you asked, I was the only Anglo woman in the bar and the only one not working). I wonder how Mr. Museum-Board Member likes titty bars?

I wonder if Mr. Museum-Board Member even drives his own car? 

Though in the end, I suppose I shouldn’t complain. Usually when people give the kind of huge money that Rattner has, they get to be Ambassador to Paris. Rattner? He’s contemplating the privilege of serving as Ambassador to the Rust Belt.