By Brady Dennis
Washington Post Staff Writer
Thursday, March 12, 2009
A couple of months ago, Steven Rattner knew little about the U.S. auto industry.
But that didn't prevent President Obama from recruiting him to solve one of the most vexing problems of the financial crisis -- how to avert a catastrophic collapse of Chrysler and General Motors.
Rattner's supporters argue that his diverse experiences -- wealthy investment banker, prominent Democratic fundraiser, former New York Times foreign correspondent and fixture in upper-class Manhattan society -- make him an ideal candidate to undertake such a daunting challenge.
"Nobody's a magic worker," said New York Mayor Michael R. Bloomberg (I), who entrusted the management of his multibillion-dollar fortune to Rattner. But "his background is really designed for tackling these kinds of problems. This is a phenomenally competent guy. People respect him."
Rattner, 56, has built a long, lucrative career on his chameleon-like talent to adapt to the situation at hand, to understand complex problems quickly and to display keen, level-headed judgment. His latest assignment, as head of the Treasury Department's auto task force, will test those skills more than ever.
"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."
In coming weeks, the decisions Rattner and his team make will shape the fate of hundreds of thousands of factory workers, as well as parts suppliers and others who make up the American auto industry.
"It's a tough balancing act," he said. "We have lot of people's lives at stake, a lot of companies at stake, a lot of interests to consider."
The group's biggest challenge is deciding whether a comprehensive overhaul of GM and Chrysler is feasible or whether automakers are better off filing for bankruptcy. That decision faces a March 31 deadline, though the date might change.
Those who know Rattner well insist he is equal to the task.
"When he's on something, he's determined and he's willful," said media giant Barry Diller, who has worked with Rattner on numerous deals. "And that's usually the difference between people who get things done and people who just don't."
In another lifetime, Rattner was an activist Democrat at Brown University, a shaggy-haired economics major whose stories for the school newspaper were a thorn in the side of administrators.
He soon landed at the New York Times and began a meteoric rise. By 24, he was covering energy and economic issues in the Carter administration. By 28, he was a London correspondent for the paper. In the early 1980s, Rattner found himself drawn to the world of investment banking. He took to his new career quickly, working for Lehman Brothers and Morgan Stanley and eventually settling at the boutique investment firm Lazard Freres, where he was an integral player in massive media deals, such as the sale of Paramount Communications to Viacom.
"He's fearless," said Paul J. Taubman, a former colleague at Morgan Stanley. "He's not really intimidated or overwhelmed by circumstances."
In 2000, Rattner co-founded a private-equity firm, Quadrangle Group, which manages Bloomberg's personal fortune and advises him on his media empire.
Success has treated him well. Rattner lives in an opulent apartment on Fifth Avenue in Manhattan and pilots his own plane to his summer home on Martha's Vineyard. He's a prominent philanthropist who counts presidents and senators, media moguls and titans of banking among his friends.
Along the way, Rattner has become a central figure in Democratic politics -- he was a leading fundraiser for the presidential campaigns of Al Gore, John F. Kerry and Hillary Rodham Clinton, as well as the campaigns of other politicians -- whose name often appears on lists of potential Cabinet secretaries. Last year, with Clinton out of the picture in the general election, Rattner switched gears and raised hefty sums for Obama.
Still, his swift journey to the heights of finance didn't come without tension. Rattner bred resentment among some colleagues, who saw him as overly ambitious, a ruthless self-promoter who harbored political ambitions.
"Eventually he wants to be Treasury secretary, and he's trying to get it by getting media attention and by social climbing, without doing any public service," his former boss at Lazard, investment banker Felix Rohatyn, said in a 1996 New York magazine article. "He should do public service, but he doesn't care about anything, not music, not art, not politics. He just wants to get ahead."
These days, Rohatyn expresses a different tone now that Rattner has landed a role in government.
"We had some differences at one point, but those things happen," he said this week. "He'll be a great addition to the team in Washington. He's energetic, he's smart, and I think he'll do very well. I wish him every good fortune."
Rattner was on vacation with his family in Spain over the holidays when Treasury secretary-to-be Timothy F. Geithner asked if he would be interested in the autos job. He made the move only after consulting with a handful of confidants, including Bloomberg and Arthur Sulzberger Jr., the publisher of the New York Times and one of Rattner's closest friends for more than 25 years.
"This is going to be a hell of a test for him. It's a huge and complex task he's taking on," Sulzberger said. But he encouraged Rattner to accept. "At the end of the day, my thought was if he didn't do this, he'd regret not having done it. It really does bring the strands of his life together."
So far, it has been a tough slog. "We're trying to do the reflective, careful study we'd do with any investment exercise," Rattner said, and yet, "every day new issues or challenges get thrown at us."
Rattner insists that there must be shared sacrifice among the automakers, union workers, suppliers and others. In deciding who must sacrifice and how much, he said he will lean heavily on the other task force members, many of whom have expertise in dealing with labor, transportation, environmental and economic issues.
When his name surfaced as a possible candidate to lead the administration's auto efforts, Ronald A. Gettelfinger, head of the United Auto Workers union, told the Wall Street Journal that he'd prefer to see the government appoint someone who "knows something about the auto industry."
Sulzberger doesn't buy the inexperience argument.
"I've got to tell you, he's the smartest person I know," Sulzberger said of Rattner. "I have faith that if anyone can work with Detroit to resolve this, it's him."
Staff writer David Cho and staff researcher Julie Tate contributed to this report.