Administration 'Shocked' By GM & Chrysler's Condition Last Spring

At an Oval Office meeting with President Obama on March 26, officials on opposing sides made their cases. Austan Goolsbee, a member of the Council of Economic Advisers, led the case against Chrysler. Gene Sperling, a Treasury official and Michigan native, defended the case for government help. The president's political advisers, Rattner said, were equally torn.

After the meeting had gone on for an hour, the president stated, "I've decided. I'm prepared to support Chrysler if we can get the Fiat alliance done on terms that make sense to us."

"I want you to be tough," the president told the task force, "and I want you to be commercial."

Rattner found the president's actions "consistent with his 'No drama Obama' image.

"He was cordial without being effusive and decisive when his advisers were divided."

Ultimately, the administration pushed the automakers into speedy bankruptcies with billions of dollars in government aid. But without the $700 billion financial bailout that provided government funds for immediate disposal, at least one of the automakers would have faced certain liquidation, Rattner said.

"If we hadn't had TARP money available and had had to seek congressional approval, I am convinced that one or both of our two automakers would have been forced to liquidate," Rattner said.

Rattner stepped down as head of the task force in July, "satisfied that we had given these companies the best possible chance to succeed."

However, Rattner warned, "like any patient that undergoes major surgery, a successful recovery is far from assured."

But now Rattner can rest up. The exhausting six-month stretch had clearly taken its toll on the task force. At one of the president's final speeches on the automakers' predicament, one of Rattner's colleagues fainted from lack of sleep. In the White House infirmary, the staffer ran into the president himself, in search of some Tylenol.

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