Ron Bloom testified today in the city’s bankruptcy trial as the financial consultant for the Official Committee of Retirees.
The city’s Chapter 9 is not the first time Bloom has been involved in “Detroit” restructuring — except that the last time it was the “Detroit” defined as the auto industry and Big Three automakers instead of the municipal entity. He was part of the White House task force that worked on the General Motors and Chrysler bail outs, bankruptcy and restructuring.
Bloom’s experiences in that process didn’t come up while he was on the witness stand today, but we found a few perhaps telling accounts of his work in the book of a local author. Bill Vlasic, formerly of The Detroit News and currently the Detroit bureau chief for the New York Times, wrote about the auto industry crisis in his 2011 book, “Once Upon a Car: The Fall and Resurrection of America’s Big Three Automakers – GM, Ford and Chrysler.”
Here are a few passages from Vlasic about Bloom:
An easygoing Harvard Business School grad with a hangdog look and a crew cut, Bloom had been through some bruising restructuring battles in the steel industry. His experience would serve him well as the point man with the UAW. “You should know that my first goal is to preserve as many jobs as possible,” Bloom told Rattner.
March 26, 2009, was the day the president of the United States set aside time in the Oval Office to discuss what should be done with General Motors and Chrysler. The task force had been building its efforts methodically, and somewhat frantically, toward this moment. There was little debate among Rattner, Bloom, and the other six members about GM. Allowing GM to fail was not a serious option. But its plan had to be torn up and redone. And unless management could miraculously cut its debt and renegotiate its UAW contract, a controlled Section 363 bankruptcy was the best possible option.
The banks howled in protest at what they branded favoritism toward the UAW. As secured lenders, they had expected to get top priority in these high-stakes settlement talks. But as Ron Bloom so succinctly put it, Chrysler needed workers to build cars, not banks.