Dec. 18, 2025 | Steven Rattner on 2009 auto bailout: "Everybody had to take pain"
Automotive News Daily Drive
Dec. 18, 2025 | Steven Rattner on 2009 auto bailout: "Everybody had to take pain"
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Term
hybrids
Hybrids are cars that have both a gasoline engine and an electric motor, so they can run on either or both.
Concept
electrification
Electrification means making cars run on electricity instead of gasoline or diesel.
Term
charging infrastructure
Charging infrastructure is the places where you can plug an electric car to charge it, like at home or on the road.
Brand
Renault
Renault is a car company from France that makes cars and has worked with Ford on some models.
Car
Bronco Sport
The Bronco Sport is a small SUV made by Ford. It’s newer than the Escape and has been selling well.
Term
warranty
A warranty is a promise that the car maker will fix or replace parts if they break soon after you buy it, so you don’t have to pay a lot for repairs.
Concept
residual value
Residual value is how much a car is expected to be worth later on, after you’ve driven it for a while. It matters when buying or leasing because it affects how much you pay each month.
Brand
Chrysler
Chrysler makes cars, trucks, and SUVs. It’s a big American company that has made many popular vehicles over the years.
Brand
General Motors
General Motors is a huge American company that makes many different kinds of cars and trucks, including Chevrolet and Cadillac.
Concept
auto industry
It’s the whole market for cars, trucks, and other vehicles—everything from factories to dealerships.
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This podcast is brought to you by Reynolds and Reynolds, the industry leader and automotive technology. Learn how Spark AI Reynolds Unified AI Data Layer can help you unlock your full potential by visiting rayray.com-spark-AI. Welcome to Daily Drive for Thursday, December 18th, 2025. I'm Kellan Walker in Las Vegas.
Today on the show, experts say the EU may go fully electric despite this week's emissions pullback. Try-color executives are charged with fraud, and as the escape goes away, Ford dealers fret over shrinking affordable options. Plus, an interview with Stephen Ratner, who led President Obama's auto rescue team in 2009, about the results of those actions 16 years later, and whether he'd do anything differently knowing what he knew.
Let's run through all the news you need to know to keep up in the auto industry. Despite the EU's plan to abandon its 2035 combustion engine ban, many analysts say Europe's electric future is still on track. The policy reversal gives automakers flexibility to keep selling hybrids and conventional engines, but experts believe it's just buying time, not changing direction.
They say the shift could actually help by allowing markets to build out charging infrastructure, which has been a major roadblock. EV sales are already climbing, up 26% year over year. And the slower pace might encourage more partnerships on affordable EVs like Ford and Renault announced last week. Still, it's a tough pill for automakers who poured billions into electrification based on rules that only became official in 2023.
Federal prosecutors are dropping the hammer on tricolor holdings. The subprime auto lenders founder, Daniel Chu, is charged with fraud. Prosecutors say Chu and his team double pledge the same auto loans to multiple lenders. They say by September they pledged $2.2 billion in collateral, but only had $1.4 billion that was real. Two executives have already pleaded guilty and are cooperating.
Chu and the former COO face at least 10 years if convicted. And here's the kicker. Three weeks before bankruptcy, Chu allegedly paid himself over $6 million buying property in Beverly Hills.
And Ford is discontinuing the escape after nearly 25 years with the last vehicle rolling off the line Wednesday at Louisville Assembly. Dealers are frustrated, the affordable crossover has been a volume driver and gateway for new buyers into the brand. Ford is retooling the plant for a new EV platform that will debut with a $30,000 pickup in 2027.
The automaker hopes to transition customers to the Bronco sport and Maverick, which have both outsold the escape this year. But dealers worry, many budget focused buyers will simply defect to competitors like Hyundai, Kia and Chevrolet, potentially costing Ford a generation of customers.
And those are today's headlines. You can find more details on all those stories at autonews.com.
Automakers operating in the US are freezing investment decisions as they process the Trump administration's push to reverse electrification targets and force more localization by increasing tariffs.
That's according to Francisco Rebaris, the executive chairman of Spanish metal parts supplier, Gustam. Rebaris sat down with automotive news Europe's Nick Gibbs is a piece of their conversation.
There's been a people that can obviously the moment with the tariffs and the change in strategy from the US government on electrification and how you find life there in the US plants and Mexico as well.
It's difficult. Our industry as you know, it takes time. We need to invest a lot of money. We have a lot of people involved in this kind of changes in the mind of the US administration.
It's difficult to manage. I think a first clear message is that nobody really now is rushing for electrification.
So some of the problems that were basically starting to be developed by motor by Ford now are slow down.
They have no not the pressure to really go into launching new eb's on so this is clearly right now a clear fact that most of the eb programs now are slow down and there's no pressure.
As you know, all the incentives to buy this stop by September. So I still have seen a preliminary sales for October. It seems that the sales of eb's are really moving down.
In the US from September and the rate of penetration of the eb's and black and hybrid in the US right now as the latest information I have is that there's less than 10%.
For the new vehicles that in the market for the new sales is less than 10% of penetration or eb's.
And they were programs that you were voting. I had problems that happened in council and we have reached agreements with the customer and in parallel.
They are now recently under the new administration.
And now they are trying to launch new versions of black and hybrid or even I see.
No, they were not investing so much in launching new combustion engine vehicles.
And now we see that they are really moving that direction because it is the only vehicle that they are selling.
I guess that doesn't matter too much. You write some new programs, the council that then are the programs for yeah.
So for the when we need to refers to our kind of a general capacities and for me to stop this one or this one is the same.
But then to have some specific investment which are linked to one program. In this case, we need to find a specific agreement with a company that has decided to stop the launch of our programs.
And then to have a discussion. Right. And they go, well, he's discussions. Yeah.
No, we're doing well because again, it's a common sense. I mean, they know that they need the suppliers.
They know that it's not the mistake of our suppliers. So they are we are finding solutions. But it's difficult.
So it's a lot of it's been a lot of noise and a lot of difficulties in to take any decision with this level of uncertainty.
Also, it was a lot of noise around Mexico, but you cannot change your mind and to start one investment from one day to another base in something which could change in six months from now.
So we are basically living with the uncertainty and working very close to all our customers.
And in terms of the and the tariffs and how they're working from Mexico going into the US and you you in a position where you are making parts in Mexico, you send to the US.
No, no, no, no, our business model is a little bit different. Right.
We usually we use supply locally because our range of part we usually we supply local to Mexico to be called a sample in Mexico.
And then some of them, maybe in depending of the customer, they are sending 80% to US. So we have an indirect problem.
Because if we are stepping into this problem, this problem is going to be is going to be sold in US. And then from one day another is not competitive anymore because of the tariffs.
They will have a problem in Mexico, but it's not because we are sending the parts. We are not sending the parts to US.
And in parallel, we have the same issue in U.F. because we have also a we have our footprint in Mexico and our footprint in US.
So for us, it's not such a big problem, but the level of uncertainty for our customers is very high.
You can hear more of this interview between automotive news, Europe's, Nick Gibbs and Gostamp executive chairman Francisco Ribeiros on our upcoming bonus episode of Daily Drive that will be available Sunday morning.
Coming up, Steven Ratner led President Obama's auto industry rescue in 2009. He joins the show next to talk about the legacy of those decisions and his column for automotive news's 100 year anniversary.
That's next on Daily Drive.
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Welcome back to Daily Drive. I'm Kellan Walker.
The Obama administration's 2009 auto rescue remains one of the most consequential government interventions in industry history.
Stephen Ratner led that effort as counselor to the Treasury Secretary.
Guiding GM and Chrysler through bankruptcy despite knowing almost nothing about cars when he took the job.
Ratner writes about the experience in a guest column for automotive news's 100 year anniversary.
He spoke with automotive news director of tech and innovation, Hannah Lutz, about how the bailout unfolded and why it worked.
Steve Ratner is joining me today. He is CEO of Willa Advisers, the investment arm for former New York mayor Michael Bloomberg's personal and philanthropic assets.
Most people in the auto world probably remember Steve from a previous assignment that shaped the course of the auto industry.
He served as counselor to the Secretary of the Treasury and led the Obama administration's successful effort to restructure the auto industry.
He wrote about it in his book called Overhaul, an insider's account of the Obama administration's emergency rescue of the auto industry.
He also wrote about it in an essay in our automotive news centennial book, which we'll talk about today.
Welcome Steve. Thanks for having me.
So take me back to 2009. You were tasked by President Barack Obama to help rescue the auto industry.
And at that point, how much did you know about the industry and why were you and the presidential administration compelled to help save it?
I knew practically nothing about the auto industry. I lived in Manhattan. I did own a car, but in Broadway often.
My banking career, which is really what my career had been before this, was principally involving services companies, media and telecoms and things like that.
I don't think I'd even been to Detroit in 20-some odd years. So I was starting from scratch, so to speak.
And what compelled you? I mean, besides just getting the job, getting the assignment, what compelled you and the administration to take a closer look at auto?
Well, as you recall, it was a very unfortunate timing situation. The auto industry collapsed in the fall of 2008, along with the rest of the economy and financial markets and so forth.
And of course, we had an election in November of 2008, and so we were in the middle of a transition.
The car companies, when I said car companies, I'm talking about GM and Chrysler Ford was in better shape as I'm sure you know, had gone to the George W. Bush administration in the fall of 2008 and asked for money.
They were given a bridge loan to get them across to the new administration, so the timing was really terrible.
And look, autos are an iconic American industry. We are a car society, a car culture. Many American families own at least one car, some two, some three.
And the idea of just letting this industry disappear without at least taking a very hard look at trying to save it was not acceptable either to the Bush administration or to the Obama administration.
So then you might ask, and I don't mean to do your job for you, but then you might ask, well, why did they pick me since I really didn't know anything about cars?
Really, because this was not a job to figure out how to run the car companies and figure out what kind of cars they were supposed to make.
We had companies to do that. It was a job to figure out how to restructure the companies if they could be restructured in a way that they would be solving.
And that was something I had spent a fair amount of time doing. And it was frankly a job that required someone who had the financial experience but also had a sensibility about Washington and public policy and how the government can and should get involved in these kinds of things.
And I had spent a fair amount of time in the political world as a volunteer, as an amateur, as a whatever you want to call me.
And so the powers that be felt that while I didn't know cars per se, I could find people who knew cars and that I had these other ingredients that they felt would be important to have on the team.
So besides the obvious financial crisis that affected most businesses, many businesses during 2009, what led to what you called in the essay, the poor financial structures at GM and Chrysler, how did we get to that result?
And was there another systemic problem that needed to be solved for the companies?
Well, the companies had a whole variety of challenges. They gas prices had spiked a lot right before the downturn. They had perennial issues with the unions and the workforce.
They were over leveraged. There was competition from Japan and from Mexico and from other places where foreign cars were made.
And so they had a whole series of challenges and they all really came together in this perfect storm when consumers essentially stopped buying cars as the financial crisis hit.
And you landed on two different solutions for GM and Chrysler, what were they?
Yeah, they were modest. They were different, but there were some similarities. The big decision we had to make and the big conclusion we quickly came to is that we needed to put these companies through a bankruptcy process in order to get rid of this enormous overhang of liabilities that they had amassed over decades of bad financial management.
And that was a scary prospect because a car company is a consumer-facing company. It's not like some company making building materials or steel or whatever where they're dealing with other business customers.
These were dealing with individual consumers and we were afraid particularly because of the warranty and the residual value, the value of a used car that people would just stop buying cars from a bankrupt company.
But we felt we had to do that. And that was the similarity between the two. As for the differences, we concluded that Chrysler was too small, had too weak a product line, it had been owned by private equity for a good while, and it had been kind of hollowed out.
We just didn't feel as a standalone company. It was likely to be able to make it even with government money.
And so we looked for a merger partner or a joint venture partner or whatever you want to call it.
General Motors of course is the iconic American car company and we felt that General Motors was at all possible, really had to survive as a standalone company.
But oddly enough GM was in some ways in worse shape than Chrysler. The product was better, but the financial mismanagement was worse.
And we ended up having to put a really unbelievable amount of money into General Motors to get it back on its feet.
And bankruptcy can be sort of a black eye on a company. But you noted in the essay that customers remained very loyal to GM and to Chrysler, they continued buying cars. What did you make of that at the time?
We did a lot of what my boss, Tim, one of my bosses, Tim Gaitner, the secretary of the Treasury called putting foam on the runway.
When a plane is going to crash, they think it's going to crash, they put foam on the runway to cushion the blow.
And so we had some ideas for how to do the same thing. For example, guaranteeing that consumers would get warranty coverage even if the car company disappeared, things like that.
So we put a lot of foam on the runway. And fortunately, the consumers did not move down to our worst fears. They actually stepped up.
And it took a while for car sales to come back, but they did come back.
I spoke with the former publisher of automotive news recently about an editorial that he wrote around this same time and he was urging Washington to save General Motors.
What sort of lobbying did you see from the automaker, suppliers, dealers, and others in the industry? And did that make a difference?
We saw a ferocious amount of lobbying not surprisingly. There was really almost nobody who said, let's just let the car companies disappear.
I guess there were some some hard-nosed, you know, really tough free enterprise capitalist types who said capitalism includes failure.
And if they're going to fail, you should let them fail. But remember, the economy was losing a massive number of jobs at this point in time.
The Midwest was suffering particularly badly. And we just looked at each other and said, we would be irresponsible to not try to save these companies if we could.
But everybody wanted something, the dealers wanted something, the news wanted something, the shareholders wanted something, the bondholders wanted something.
And so it was a constant process. I would say that I shouldn't probably say pleasantly surprised, but I was pleasantly surprised that the really steadfast support that we got from the White House from the president on down to do the right thing.
And not to worry about all these special interest pleadings that we were getting from every corner of the industry.
And so we really did, I think, a very thoughtful and very much like what we would have done in the private sector except we had access to Treasury money.
And I was proud that we did. We put $82 billion into the companies including into their finance subsidiaries of finance car purchases.
And we got back all but I think about $11 or $12 billion for the Treasury. And I would argue that to save an industry, to save million jobs who knows.
For a relatively small amount of money at a time when a lot more money was being spent with less effect seemed like pretty good trade for the taxpayers.
Where do you think the auto industry would be without the government assistance?
I think that Chrysler would have almost certainly shut down. They had one brand Jeep which ironically is struggling a bit at the moment.
But it was really their strongest brand. They had many vans. They had trucks. They didn't really have any cars that people wanted to buy.
And so we didn't think there was much, as I said earlier, left of Chrysler.
The problem was in a normal environment, these companies could have gone through their own bankruptcy process.
They could have gotten what's called debtor and possession financing and kind of temporary financing to help companies go through bankruptcy.
The problem was that markets were just totally frozen at this point in time. I'm talking about very early in 2009.
And so what literally would have probably would not have been debtor and possession financing literally what would have happened is they would have closed their doors, turned off the lights and laid off all their workers.
And I'm a capitalist. I'm a free market capitalist. But I do believe capitalism is hardly perfect.
And there are times when markets fail. And government is here to deal with those things.
Not in a way that rewards people for bad behavior. And I don't think anybody got rewards for bad behavior here.
But in a way that meets out the pain, but allows the industry to live to fight another day.
So that was the thesis behind everything we did around the rescue of the car companies.
Looking back, is there anything that you regret, anything you wish you could have done differently because you're missing the resources or just made a different decision?
No, I think we got it pretty right. I think it was shared sacrifice. Everybody had to take a fair amount of pain.
You could have made an argument that from the standpoint of US Treasury, it would have been better to let Chrysler go out of business because the cars and trucks that they sold would have been more likely to be sold by US manufacturers than by imports.
There were a lot of lineups of Chrysler, more similar to Ford and GM than they were to Toyota or Hyundai or whomever.
And so as a pure economic matter, it might have saved the taxpayers some money. But it would have cost a fair amount of jobs.
And we just, we felt that that was a trade that we should make. And I, indeed, I think that when we were thinking about the odds of Chrysler succeeding even with the alliance with Fiat and the government help,
we, we were not 100% sure Chrysler would make it. And the fact that it has kind of tells me we made the right decision.
So the last question I'll ask you, what are you most proud of from this experience?
I've been in the working world now for 51 years, I think, to be specific. And I am proud of everything I did. I enjoyed all my different careers and jobs and whatever.
But there's no feeling of satisfaction that one gets from being a banker or being a private equity guy or being a journalist, which I wasn't in my career,
that quite frankly matches up with saving and helping to save an iconic industry at a time when it was needed.
I remember when they asked me if I wanted to do this and I agonized about it and my kids at home and a job and your partners and all this stuff.
And then I finally said to myself, if not now when, is there ever going to be a moment where the skills I have would be more useful than they would be in the middle of a financial crisis and happen to be the auto industry but whatever piece of it they asked me to help with.
So it was a relatively short but by far the most satisfying piece of my 51 year career.
Well, I really made a mark. Thank you so much Steve for joining us. It was great to meet you.
Thank you for having me.
You can read Stephen Ratner's guest column as part of Automotive News' 100 Year anniversary online at autonews.com.
That's daily drive for today. I'm Kellen Walker.
Thanks to Automotive News executive producer Jake Near as well as our own Michael Martinez for his reporting for today's podcast.
We also had reporting from Nick Gibbs of our sibling publication Automotive News Europe.
You can get the latest news on federal auto policies, Europe's emissions reversal and everything happening in the auto industry at autonews.com.
We'd love to hear from you. Let us know what you think of the show when the topics we covered today.
Send us an email at dailydriveatautonews.com or leave us a voicemail at 313-444-2774.
And if you enjoyed the podcast remember to like, leave a review and subscribe so you never miss an episode.
About this episode
Stephen Ratner, who led the 2009 auto bailout under President Obama, reflects on the significant government intervention that saved GM and Chrysler from collapse. He discusses the challenges faced by the auto industry during the financial crisis, the restructuring strategies employed, and the importance of maintaining consumer confidence. Ratner shares insights from his experiences, including the necessity of shared sacrifice among stakeholders and the lessons learned over the years. His perspective sheds light on the lasting impact of those decisions on the automotive landscape today.
Original notes
Steven Rattner, who led the Obama administration’s auto rescue, reflects 16 years later on General Motors and Chrysler’s bankruptcies and addresses whether he’d do anything differently today. Plus, why Europe’s EV future remains intact despite this week’s combustion ban reversal— and what Ford dealers fear as the Escape goes away.
Automotive News Daily Drive
Automotive News
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