Steven Rattner on the UAW Strike and the Challenges of Bidenomics

Joe Weisenthal (0:00)

Our new spinoff show Lots More will be back next Friday, but for now, enjoy this bonus episode with Steven Rattner.

Tracy Alloway (0:16)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:21)

And I'm Joe Weisenthal.

Tracy Alloway (0:22)

Joe, it is the first week of the United Auto Workers strike. I feel confident predicting that by the time this episode comes out, it'll probably still be ongoing.

Joe Weisenthal (0:32)

Right, so we are recording this September 20th. I think you're listening to this Friday, September 22nd.

Even in the off chance that they get a deal between now and then, there is a lot going on with autos right now. There's a lot going out with labor that even if by some miracle there's a deal in the next 48 hours, it's worth having a deeper understanding of what's going on right now.

Tracy Alloway (0:53)

Absolutely. And we've obviously recorded an episode on this previously. We spoke to one of the UAW leaders, Dan Vicente, talked about some of the concerns. But I think this whole saga is interesting from a sort of thematic perspective because it gets at all these big picture conversations that we've been having, you know, questions over the division of labor in the US economy, over productivity, over the future of the US car industry and how it's responding to environmental pressures and concerns, industrial policy even. It sort of wraps all of these things up in one complicated package. Let's put it that way.

Joe Weisenthal (1:35)

Yeah, you nailed it. I mean, there's the question of labor costs and the tight labor markets and whether this is an opportunity for labor to get a greater share of the pie, so to speak.

There is the transition, which was already happening, is already underway, and that poses very unique opportunities and threats to the legacy industry. And then this idea of like, well, we're in an era of sort of industrial policy, and part of this is by design, the Bidenomics and so forth. And so, how all of these things play together, it really, as you said, it comes together in this one story in a unique way in The Strike.

Tracy Alloway (2:12)

Right, so we obviously need to talk more about it. I am very happy to say that we do indeed have the perfect guest. We're gonna be speaking with Steven Rattner, very prominent American financier, as they say, and someone who was very much involved, in fact, spearheaded the big auto bailout, the auto task force.

Joe Weisenthal (2:31)

The Karzar.

Tracy Alloway (2:31)

The Karzar, that's exactly it, under the Obama administration in circa 2008, 2009 Someone who can talk very authoritatively over some of the concerns from the car makers and the broader sort of financial state of those companies.

So Steven is currently the chairman and chief executive officer of Willett Advisors. That's the investment arm for the personal and philanthropic assets of Michael Bloomberg, who is of course the majority owner of Bloomberg LP. Steve, welcome to the show.

Steven Rattner (3:03)

Thanks so much for having me.

Tracy Alloway (3:05)

We're excited to have you here. I wanted to start out with something that the UAW representative that I mentioned in the intro told us. And it's the idea that the unions accepted a lot of concessions in the aftermath of 2009 in order to get their respective employers, the car companies, back up and running.

Is that right? And was there an expectation that at some point those concessions would reverse?

Steven Rattner (3:35)

No question that the unions made concessions as part of what we like to call not the bailout, but the rescue of the auto companies.

It was an important part of committing what ultimately became $82 billion of taxpayer money to this industry, that there'd be shared sacrifice, that all the different constituents around the industry, whether it be labor, whether it be shareholders, whether it be suppliers, whether it be management, all participated in making shared sacrifice. So yes, that definitely was the case, but as I'm sure we'll get into as you ask me some more questions, the concessions that the auto workers made back in 2009 were relatively small compared to what they're asking for today. And what they're asking for today would not just restore whatever it is, whatever they gave up back in 2009, but add a bunch of other stuff on top of that.

Joe Weisenthal (4:29)

What did they give up in 2009? The main thing that came up in our previous conversation on the strike was just this idea of tiered labor.

A tiering system, certain employees sort of grandfathered into one pay scale, and then an acceptance that new employees would not be on that scale. But what do you give your comparison of, or your characterization of what the UAW gave up or was willing to concede to in 2009 versus what we know about what the UAW is asking for now?