The 31-Year-Old in Charge of Dismantling G.M.

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June 1, 2009 The 31-Year-Old in Charge of Dismantling G.M. By DAVID E. SANGER WASHINGTON — It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism. But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry. Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended. “There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.” But now, according to those who joined him in the middle of his crash course about the automakers’ downward spiral, he has emerged as one of the most influential voices in what may become President Obama’s biggest experiment yet in federal economic intervention. While far more prominent members of the administration are making the big decisions about Detroit, it is Mr. Deese who is often narrowing their options. A month ago, when the administration was divided over whether to support Fiat’s bid to take over much of Chrysler, it was Mr. Deese who spoke out strongly against simply letting the company go into liquidation, according to several people who were present for the debate. “Brian grasps both the economics and the politics about as quickly as I’ve seen anyone do this,” said Lawrence H. Summers, the head of the National Economic Council who is not known for being patient whenever he believes an analysis is sub-par — or disagrees with his own. “And there he was in the Roosevelt Room, speaking up vigorously to make the point that the costs we were going to incur giving Fiat a chance were no greater than some of the hidden costs of liquidation.” Mr. Deese was not the only one favoring the Fiat deal, but his lengthy memorandum on how liquidation would increase Medicaid costs, unemployment insurance and municipal bankruptcies ended the debate. The administration supported the deal, and it seems likely to become a reality on Monday, if a federal judge handling the high-speed bankruptcy proceeding approves the sale of Chrysler’s best assets to the Italian carmaker. Mr. Deese’s role is unusual for someone who is neither a formally trained economist nor a business school graduate, and who never spent much time flipping through the endless studies about the future of the American and Japanese auto industries. He lives a dual life these days. He starts the day at a desk wedged just outside of Mr. Summers’s office, where he can hear what young members of the economic team have come to know as “the Summers bellow.” From there, he can make it quickly to the press office to help devise explanations for why taxpayers are spending more than $50 billion on what polls show is a very unpopular bailout of the auto industry. Several times a day he speed-walks to Treasury, taking a shortcut through the tunnel under the colonnade, near the kitchens. The other day he talked about how sharply perceptions of the industry’s future changed after Mr. Obama’s election. “At the first meeting with Rick Wagoner,” he said, referring to G.M.’s recently deposed chief executive, “they were in a very different place. He said publicly that bankruptcy was not a viable option. It’s been a long process getting everyone to look at the options differently.” In fact, from before Inauguration Day, few in Mr. Obama’s circle saw any other choice. Every time Mr. Deese ran the numbers on G.M. and Chrysler, he came back with the now-obvious conclusion that neither was a viable business, and that their plans to revive themselves did not address the erosion of their revenues. But it took the support of Mr. Rattner and Ron Bloom, senior advisers to the task force charged with restructuring the automobile industry, to help turn Mr. Deese’s positions into policy. “The president’s instruction to us was that we had to come up with a solution that would work on a commercial basis, that didn’t involve indefinite federal financing,” Mr. Deese said. “But we didn’t want liquidation, which would have even worse effects. So the question was how do you design a very substantial restructuring, and do it fast.” Mr. Deese’s route to the auto table at the White House was anything but a straight line. He is the son of a political science professor at Boston College (his father) and an engineer who works in renewable energy (his mother). He grew up in the Boston suburb of Belmont and attended Middlebury College in Vermont. He went to Washington to work on aid issues and was quickly hired by Nancy Birdsall, a widely respected authority on the effectiveness of international aid and the founder of the Center for Global Development. But he wanted to learn domestic issues as well, and soon ended up working as an assistant for Gene Sperling, who 17 years ago in the Clinton White House played a similar role as economic policy prodigy. Eventually, Mr. Deese headed to Yale for his law degree. But his e-mail box was constantly filled with messages from friends in Washington who were signing up to work for the Obama or Hillary Rodham Clinton campaigns. Mr. Deese chose Senator Clinton’s. “He was pretty quickly functioning as the top economic policy staffer through her campaign,” Mr. Sperling said. “He could blend the policy needs and the political needs pretty seamlessly.” On the day that the Clinton campaign ended, Mr. Deese left her concession speech and received a message on his BlackBerry from a friend in the Obama campaign urging him to sign on immediately to Mr. Obama’s team. He resumed his policy work there, and found himself stuck in Chicago — unable to fly to Washington with his dog — as the economic crisis deepened. Finally, one night, he decided to get into his car with his dog and just started driving back to Washington. Tired, he pulled over to catch some sleep in the car. “I slept in the parking lot of the G. M. plant in Lordstown, Ohio,” he recalled. The giant plant, opened during G.M.’s heyday in the mid-1960s, is where the Pontiac G5 is produced. Under the plan Mr. Deese worked on when he arrived in Washington, Pontiac will disappear. “I guess that was prophetic,” he said, shaking his head. Correction: An earlier version of this article misidentified the Center for Global Development as the Center for International Development. http://www.nytimes.com/2009/06/01/business/01deese.html?emc=eta1
 

Throckmorton

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This ridiculous quote got my attention:
 Quote:
"He resumed his policy work there, and found himself stuck in Chicago — unable to fly to Washington with his dog — as the economic crisis deepened. Finally, one night, he decided to get into his car with his dog and just started driving back to Washington. Tired, he pulled over to catch some sleep in the car. “I slept in the parking lot of the G. M. plant in Lordstown, Ohio,” he recalled. "
I know someone who drives by the Lordstown plant regularly. It is a huge plant amidst trailer homes. It is closed to the public. It is ringed by a high fence and the entrances that are visible from the highway are guarded and gated. You don't just pull in to their parking lot and stroll about, let alone spend the night there! If he was at Lordstown then he must have had permission to be there.
 
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Sigh. I feel so much better knowing all this! I wonder if this "wizkid" even knows how to check his own oil? Since admittedly he knows little or nothing about the auto industry. At least he doesn't have an MBA like many another corporate destructor seems to have had. MHO.
 
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They're a perfect example of the exponential curves turning upward. The time span from "hey, you really ought to do something about that" and "too late" is very short.
 
At least this kid knew enough that GM and Chrysler couldn't survive in the business model they were in. The rest of the automakers' story is about politics not business. Bankruptcy should have allowed a cancelling of all current union contracts. When that didn't happen, it became business as usual with the creditors getting the short end.
 
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 Originally Posted By: GROUCHO MARX
At least this kid knew enough that GM and Chrysler couldn't survive in the business model they were in. The rest of the automakers' story is about politics not business. Bankruptcy should have allowed a cancelling of all current union contracts. When that didn't happen, it became business as usual with the creditors getting the short end.
Groucho- I need to ask you why burning humans that bargained in good faith and secured agreements are expendable ..while for profit enterprises are sacred? If those agreements were too expensive, then dividends and bonuses surely were not valid or "true profits" and it was nothing more than tap dancing thievery. Now making good partially good on those long standing agreements is somehow a crime since they're humans ..while red ink is some golden calf to be mourned. Is that about it?
 
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Last night on the Colbert(sp?) report the host was joking about how we gave them 50 Billion and they still declared Bankruptcy! Why give them 50 Billion when they could have declared bankruptcy for free? I laughed my a** off. Was hilarious! He's right though...
 
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 Originally Posted By: Gary Allan
 Originally Posted By: GROUCHO MARX
At least this kid knew enough that GM and Chrysler couldn't survive in the business model they were in. The rest of the automakers' story is about politics not business. Bankruptcy should have allowed a cancelling of all current union contracts. When that didn't happen, it became business as usual with the creditors getting the short end.
Groucho- I need to ask you why burning humans that bargained in good faith and secured agreements are expendable ..while for profit enterprises are sacred? If those agreements were too expensive, then dividends and bonuses surely were not valid or "true profits" and it was nothing more than tap dancing thievery. Now making good partially good on those long standing agreements is somehow a crime since they're humans ..while red ink is some golden calf to be mourned. Is that about it?
Yeah, existing bankruptcy law should be totally ignored to effect a political outcome. That always ends well... The creditors that are currently getting screwed also had long standing agreements, negotiated in good faith.
 
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 Originally Posted By: Tempest
 Originally Posted By: Gary Allan
 Originally Posted By: GROUCHO MARX
At least this kid knew enough that GM and Chrysler couldn't survive in the business model they were in. The rest of the automakers' story is about politics not business. Bankruptcy should have allowed a cancelling of all current union contracts. When that didn't happen, it became business as usual with the creditors getting the short end.
Groucho- I need to ask you why burning humans that bargained in good faith and secured agreements are expendable ..while for profit enterprises are sacred? If those agreements were too expensive, then dividends and bonuses surely were not valid or "true profits" and it was nothing more than tap dancing thievery. Now making good partially good on those long standing agreements is somehow a crime since they're humans ..while red ink is some golden calf to be mourned. Is that about it?
Yeah, existing bankruptcy law should be totally ignored to effect a political outcome. That always ends well... The creditors that are currently getting screwed also had long standing agreements, negotiated in good faith.
Tell me why I should choose one over the other? Just give me one good reason to regard failure to be born by one over the other. Don't just hang upon your assumption and assertion that some rule of (your assumption) "rule of law" takes precedence over whom it impacts and how much. Sell me on why you delight on screwing UAW workers and feel the need to foster the poor weak and helpless creditors. Just what makes you spread your protective wings to shield these needy and helpless entities ..and flush the greedy and evil UAW members so that you can erase them from existence for the vile vermin that they are??? Just what is it with you and "people"?? Just what is it with you and "business"? I can only hope that, in the passage of time, you're helpless in the face of someone just like yourself. Only then will the folly of your blind allegiance to Wall St. & Co. give you your just desserts.
 
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 Quote:
Tell me why I should choose one over the other? Just give me one good reason to regard failure to be born by one over the other.
Then why is the Union getting a MUCH better deal?
 
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39,806
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Pottstown, PA
 Originally Posted By: Tempest
 Quote:
Tell me why I should choose one over the other? Just give me one good reason to regard failure to be born by one over the other.
Then why is the Union getting a MUCH better deal?
Compared to what they had under contractual agreement? The creditors get screwed for one evolution. The UAW members who are left out ..get screwed for a lifetime.
 
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