According to the team from the Treasury Department that was responsible for General Motors’ reorganization, the Federal government had no indication there was a defective ignition switch issue that would pop up years later.
We didn’t know about anything like this,” said CEO of restructuring adviser Maeva Group LLC, Harry Wilson, speaking at a Brookings Institution panel on the 2009 bailout. “It seems to have been stuck in the mid-level engineering department. These are folks we never even met.”
However, Wilson added,” Given how hard it was to get information out of the company at the time, even if we had asked a point-blank question, I doubt we would have gotten a straight answer.”
Steven Rattner, financier and leader of the reorganization team, also was at the engagement. He said, “As best we know, the senior people at GM didn’t know about it. They can’t tell you about something they didn’t know. We were not forensic accountants. We were not FBI investigators. We had about 40 days to do all this due diligence. We’re not going to find out about something like that.”
Fiat SpA CEO Sergio Marchionne, who was involved with Chrysler’s reorganization, added that Chrysler filed for bankruptcy a month before General Motors and that “… the state of disrepair of the house was such that the manufacturing environment had been neglected for years,” requiring $8 billion to be invested in Chrysler’s infrastructure. “The other guy got guaranteed survival. He could not fail. The urgency to change came with the loans. We had to prove our right to exist. That urgency did not exist on the other side. When you’re broke you change your ways a lot faster.”
Marchionne added that if he could do one thing differently, he would have given Chrysler and General Motors the same post-bankruptcy structure, according to an article in Businessweek.
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