State of GM, Chrysler 'shocked' officials

DETROIT, Oct. 21 (UPI) -- Former U.S. automotive task force chief Steve Rattner said the state of General Motors Co. and Chrysler last spring "shocked" government officials.

"We were shocked, even below our low expectations," Rattner said in an article published by Fortune Magazine, ABC News reported Wednesday.

"Looking just at the condition of GM's finances and Chrysler's new-car pipeline, the case for a bailout was weak," he wrote.

The task force, however, concluded the alternative of letting the companies fail could be disastrous. "We imagined that the collapse of the automakers could devastate the Midwest beyond imagination," Rattner wrote.

Rattner said GM had "perhaps the weakest financial operation any of us had ever seen in a major company."

Both GM and Chrysler underwent bankruptcy proceedings and massive restructuring through the summer. They emerged from their bankruptcies, each with new management and billions of taxpayer dollars to help them rebound.

Rattner said GM's former Chief Executive Officer Rick Wagoner displayed "friendly arrogance." Moreover, "it seemed completely obvious to us that any management team that had burned through $21 billion of cash in a year and another $13 billion in the first quarter of 2009 could not be allowed to continue."