From the book “A Governor’s Story” by Jennifer M. Granholm and Dan Mulhern. Reprinted by arrangement with PublicAffairs, a member of the Perseus Books Group. Copyright © 2011.
Despite my best efforts, within a few weeks I found myself waiting for the phone call I’d hoped never to receive.
March 29, 2009, was a cold Sunday evening. I was seated in my usual spot amid piles of paper at the desk in my bedroom in the governor’s residence, in front of the computer, reading stories online. I had written down a list of things to say, placing it carefully in view. After an agonizing, anxious wait, the phone finally rang, and Kathy, the security officer, said, “Governor, I’m transferring the White House.”
“Hello? Mr. President?” I asked nervously. Getting a call from the president of the United States always makes your heart pound—even if you know what he’s going to say. And especially if you suspect he’s about to rock your world.
“No, please hold while I get the president,” a woman said. I hastily typed an e-mail message to my executive team: “Can we get a conf call # for our team ready? I’m on hold w WH now.”
Then the familiar voice: “Jennifer, this is Barack Obama.”
“Hello, Mr. President,” I said. “I’ve been reading the stories. I’m guessing you have some news for me.”
“I do.” The president was somber. He told me that the business plans he’d received from Chrysler and GM were “unacceptable.” The next day, he’d be announcing that he was giving Chrysler thirty days and GM sixty days to revise them. Otherwise, the administration would put them into bankruptcy. And he added that Rick Wagoner, GM’s CEO, was “stepping down.”
I stared at the paper with my scrawled list of talking points. My mouth was suddenly dry. But I managed to get the words out in a desperate rush.
“Please, Mr. President. I hear what you are saying, but I hope you will keep these companies out of bankruptcy. Consumers won’t buy cars from a bankrupt company,” I asserted, repeating my now-familiar argument. I knew I couldn’t change the president’s mind about leveling the threat of bankruptcy, so I was praying I could keep him open-minded on the ultimate conclusion.
I continued: “And the words you use in your speech tomorrow are important. . . .” I paused, hoping I could adequately express the anguish my state was feeling, wanting to push the pain through the phone into his heart. “This is all very deep. It goes to the core of our identity in this state.” I knew I was explaining things that he undoubtedly already knew, but they were things I had to say.
“People here take enormous pride in manufacturing the American automobile, and when they perceive an attack on the industry, they feel it’s an attack on them.
“I know that you’ll show that you understand how the workers feel and that you’re not giving up on the American auto industry. And that you understand that this auto crisis is our own version of a hurricane and that we need a response from the federal government more robust and more sensitive than the response to Hurricane Katrina.”
The president was compassionate and understanding. “I will communicate that my administration is supporting the auto industry,” he told me. “Believe me, I get it. I understand that this is very difficult.” He said he would appoint someone as the head of auto community recovery who shared his supportive attitude and would dedicate himself to making the transition work. But—and here was the tough love—the president made it clear that if the shared sacrifices necessary for a fix were not achieved, a “quick-rinse” bankruptcy would be the only other option. (This is a bankruptcy process rendered faster than normal through prior negotiations among government representatives, creditors, and other stakeholders. Because of its speed and the supporting role of government, there was hope that a quick-rinse bankruptcy wouldn’t scare away potential auto buyers as a traditional bankruptcy might.)
“Thank you for the personal call, sir,” I said, and hung up. I took a deep breath.
Chrysler had thirty days. GM had sixty. They had to fix themselves or face bankruptcy.
It was 8:20 PM. I sent an e-mail to my team: “Please call in now, everyone.”
It was going to be a rough sixty days.
The morning following his call to me, President Obama made his auto speech. True to his word, he stood up for American auto manufacturing: “We cannot, we must not, and we will not let our auto industry simply vanish,” he said. But the president’s message was no-nonsense. He named Dr. Ed Montgomery, an economist and former Clinton administration official, as the director of recovery for auto communities.
Within days, the pundits, the auto execs, and the auto beat reporters were all speaking as though bankruptcy for Chrysler were now a given. The only way that suitor Fiat would agree to a management deal would be if Chrysler weren’t a liability, which meant significant concessions and a fresh start. The focus over the next month was on getting the hedge funds to agree to concessions that would speed Chrysler through a quick-rinse bankruptcy.
As the clock ticked down toward the Chrysler deadline, rumors circulated about Fiat’s willingness to partner with Chrysler and whether bankruptcy or liquidation would ensue. Tension was everywhere.