>> that's what we are led to believe, yes. >> so if we don't use what was ultimately used and we let -- i'm sorry, my time if it had been a normal bankruptcy, what was the recovery time? >> the gentleman can answer the question. then we'll move forward. >> if it had gone through normal bankruptcy, it would have taken somewhat longer. but it would have been a lot more transparent. we would have had -- we could have real 363 sale. we could have not shredded the rule of law in term of priorities and those sorts of things. it may have taken a little bit longer. there is no reason why we had to do all the things we did in order to -- all this other stuff in order to fix the auto companies. >> i thank the gentleman for his testimony. we recognize miss maloney of new york for five minutes. >> i want to thank the gentleman. i want to thank all of the panelists for being here. actually, i want to thank

president obama for saving the auto industry in america. i, for one, can't imagine an america that doesn't build our own cars. and granted it's not where it was, but we saved at least a million jobs and we're now exporting cars and we seem to be doing a good job. when president obama took office, the industry was shedding jobs way hundreds of thousands and gm and chrysler faced the possibility of being totally liquidated. which would then have a huge ramification, even in new york we had suppliers in new york that were supplying the auto industry. they went out of business and many new yorkers lost their jobs. we weren't building the cars. we were building some of the parts. so it had ramifications across our great nation.

and yet when the american auto industry was on the brink of collapse and we were going to lose by all estimates from all economists at least a million jobs on the line, that would have been at least one in eight jobs in ohio and in jobs across our country. and it wasn't just the people in the auto plants. we got to remember this. this industry affected everyone. it affected the suppliers, hundreds of thousands of miles away and up and down the chain. it affected the restaurants near the plants. every store, every school, everyone in the community, the families that depended on the worker at that plant. i remember some people said let detroit go bankrupt. let i got down the drain? even a guy running for president said that. but our president said, no, we're going to save the auto industry. and quite frankly, i'm proud of the auto industry.

i'm proud of their come back. and i think it's an american success story that america bet on the kmeamerican worker and b on american industry. and gm is back. now it's the number one company in the world. ford is on the move, was handled extremely well during that whole crisis. they did extremely well. chrysler is back. and i think that supporting with policies the american worker and american busy think it's a success story. so i want to applaud everyone on the panel or everyone who played any role whatsoever in saving an american industry which is now exporting cars. now i'd like to point out and put in the record the gao highlights first page.

and i want to quote from it. there's some confusion about treasury's role. i'd like to say -- i'm going to quote exactly from their report. "although acknowledging the significant role treasury played in gm's restructuring, gm and treasury officials stated that treasury's role was advisory concerning gm's decisions and not to take on additional delphi pension liabilities but to honor the top-up agreements with some unions. also pbgc officials stated that pbgc independently made the decision to terminate the plans." so i would like to put that in the record. i -- it clarified -- >> without objection. >> -- the independent voice of gao. and i know that we have a representative here and we have

some questions for her. i first want to ask mr. bloom, mr. feldman and mr. wilson and twint tha i want to thank them for testifying. they're out there, aren't they? yep. i don't have my glasses. i can't see. i regret i was at a hearing in financial services. i didn't hear all of it. i read your testimony. i want to know what was your overall mission as members of the auto task force? delphi was just one piece of the situation that you were facing and delphi was a major parts supplier to gm that had been experiencing its own financial troubles for some time. if you save gm but delphi failed, all of your efforts would have been for nothing, is that correct? can you -- your answer?

>> i think i would echo what mr. wilson said earlier. our mission was not to save general motors. our mission was to see if there were a way to facilitate the restructuring of the companies so that the american automobile industry in its entirety could continue to function at the least possible cost to taxpayer. it was general motors' decision -- judgment which we did not disagree with that if delphi had liquidated, general motors ability to reorganize would have been put seriously at risk. >> well, my time is up. i think that says it all. i think your judge am was right. we are employing over a million jobs. we're exporting. i would call that an american success story. congratulations for any role you did. >> the gentle lady's time expired. the vice chair is recognized for five minutes. >> thank you, mr. chairman. i want to make a statement and a comment. i want to yield some additional time to mr. kelly.

what i'm hearing from this testimony is that had this action not taken place, america would be forever changed. that the federal government had no choice but to act. there's a lot of people in this country that disagree with that assessment. a lot of people in this country that disagree with that assessment. there are a lot of people in this country who believe in america that a federal government should be limited and effective and efficient. i happen to be one of those americans. i find it somewhat offensive that people on this committee, on this panel feel that only the federal government could act to save the private sector. now we talk about the size and scope of general motors. fannie mae is actually larger

than general motors. so under the auspice of the federal government had to act to save this industry, parentally you're also suggest and admitting that we're going to have to act to save fannie mae. i'm not sure that people in this country believe in that either. there's one question i have for mr. wilson. do unions get special treatment in this bailout? yes or no? >> no. >> in your opinion sth. >> no. >> okay. in your opinion, did unions get special treatment in this bailout? >> yes, absolutely. >> okay. why do you think that? >> because we document in our paper, first, they were treated better with respect to their vbuz in the general motors cases than other unsecured creditors were treated. second, they were treated much better than employees typically are treated in bankruptcy cases. and they were allowed to retain wages that are frankly above market wages, above any other competitor's wages.

and were there by preventing from having to do what tip ukly happens. and, third, there was really no justification for giving a billion dollars to the retirees of another company. ch which is what they did with respect to delphi. >> is he telling the truth or is he lying? >> i don't think he's lying. i think he's mistaken and woefully so. i think he has the facts wrong. >> explain to me in 15 seconds how he's wrong. >> there's no way to explain $26 billion of mischaracterization in 15 seconds. >> $26 billion? >> that was his claim. >> okay. >> and so, again, i'm happy to get into that. cut me off at any time you want to. if you look at each of the three pieces, we negotiated the best possible deal with each of the deficiencies with the uaw and with bond holders. the bond holders overwhelmingly approved the bankruptcy deal,

overwhelmingly. if they felt they were at disadvantage, there were people who held $28 billion in claims and could have voted with their feet and chose not to because they felt the deal was a fair deal. so that's why the first point is completely wrong. his second point is also completely wrong. we were governed in all our actions by the corporate notes. senator corker, honorable, wonderful senator, put ford a bunch of stipulations in the early t.a.r.p. work that said that gm's wage rates had to equal and chryslers, i focus on general motors, the wage rates had to equal toyotas. that's was an aspect of long negotiations. >> the yes was, was there special treatment or preferential treatment given to union members? sounds like you're doing a lot of explaining and telling me why that that's not the case. >> right. >> i think it's very clear that there was special preferential treatment given to one group

over another. now you're free to disagree with me. >> i disagree. >> it's pretty clear that's exactly what happened. let me ask you about you. have you gotten any preferential treatment since your work with unions on this from unions? >> of course not. >> of course not? you have not done any work since this with any union? >> yes, i v but thathave but th prf preferential treatment. do you have any evidence to suggest that, sir? >> i asked the question. >> i disagree with you. >> what work are you doing with unions now? >> the teamsters approached me. i had enormous success in restructuring broken businesses in many walks of life. they asked for my help in the largest employer which we successfully restruck uctured of court. because of that success, i am asked to work on other situations. i worked on my own. i've been on the other side of

the table from unions both before and since. it's just -- i am a ininvestor and restructuring expert. i work in situations to restructure companies before they go away. >> okay. thank you very much for your testimony. i will yield back the balance of my time to the chair. >> i thank my colleague for yielding back. we'll now recognize mr. johnson of ohio for five minutes. >> thank you, mr. chairman. and to the rest of the subcommittee members for granting unanimous consent to allow me to participate in today's important hearing. as you may know, i represent ohio's sixth congressional district which is northeastern ohio and youngstown. a large number of delphi retirees both salaried and unsalaried live in the district that i represent. since i was elected to congress in 2010, i've been looking closely at the reason why one class of workers, the union retirees were given preferential treatment over the nonunion

salaried retirees. it's now been almost 20 months and i still have not heard a compelling reason as to why this was done and today i hoped that this hearing would produce answers to those questions that many of us have been asking. mr. bloom, last year when you were still employed about it obama administration, i asked you whether or not that all parties involved were treated fairly and received neither more nor less than they would have simply because the government was involved. do you still believe today that all parties were treated fairly? >> yes. >> did the newly restructured general motors have any contract obligations to top up the pensions? >> the newly restructured general motors? >> yes? did the newly restructured general motors have obligations to top up the retiree pensions? >> i believe the general motors

as part of their bankruptcy settlement with the uaw reaffirmed their commitment to top up the pensions of the delphi retirees. >> was it a contract obligation? >> i believe it is part of the contract with the uaw, yes. >> okay. how can you say that all parties were treated fairly when the union retirees kept their full pensions while you and others raised the pension funding status 100% and the union retirees kept one of the best health care plans in the u.s.? on the other hand, the salary retirees lost up to 70% of their pension plans and their health care? you know, i mean -- i learned this principle in kindergarten. fair is fair. how can you take, give one group 100% and take 70% from another group and call that fair? >> first thing i'd say that the union retirees at general motors

did not retain the health care program they had before. they received a viba which is responsible for providing the health care. it does not have sufficient funds to provide the benefits they used to have. number one. number two, when i use the word fair, i did not use the word equal. any bankruptcy, all constituents and mr. feldman made this point earlier, all constituents try to use whatever leverage they have to try to get the best arrangement they can. it was general motors' business judgment that the overall deal they made with the uaw was fair and the cheapest deal they could make. >> mr. bloom, i hate to cut you off. i appreciate. >> i'm answering the question. >> reclaiming my time, mr. bloom. i appreciate your explanation. i'm running out of time. it's an interesting nuance that now we changed the definition. there's a difference between fair treatment and equal treatment under the law.

that i don't understand. it's clear to me and many of my colleagues and the public that the obama administration's auto bailout staff used taxpayer dollars to pick winners and losers. and now it seems in an effort to not embarrass the president &an contentious election campaign, they agreed to speak today, but up until now it hasn't happened. tens of thousands of salary retirees saw their retirement funds greatly reduced by up to 70% while the union retirees were made whole and were even topped up. do you think it was fair? >> equal and fair sound pretty much the same to me, congressman. i would also say that to the earlier question, he was asked if they were given preferential treatment. he said he justified preferential treatment that he

thought was reasonable. i don't think is any question the union didn't get preferential treatment. >> thank you for your answer. i'd like to yield my last 20 seconds to my colleague from ohio mr. turner for a followup question. >> you were saying there was a obligation with the contract with respect to the top-ups. those don't sur five in bankruptcy, right? they were free to affirm or not affirm them. you can't say it was a contract obligation therefore they must. they were in bankruptcy, correct? >> what i think i said was in the general motors bankruptcy, general motors made a contract with the uaw. that contract included affirming the prior agreement. >> i think you were leaving the impression with the committee that there was some obligation within bankruptcy and they had no obligation in bankruptcy. it's one they affirm, correct? >> that's what i said. >> i yield back, mr. chairman. >> i thank my colleague for yielding back. and with that, we'll -- i will

begin a second round of questions for the panel. now mr. wilson, i just want to make sure that this is for the record. my colleague from pennsylvania mr. kelly, submitted for the record a newspaper article called "city and state" -- i'm sorry. pardon me? mr. ge in. mr. ginta submitted that. this is not to impugn your character in any way. i understand you took great offense to that. but simply saying a quote from this in regards to -- this is a quote from mr. goal, the teamster's director of strategic research and campaigns. "we're not at lib torte discuss any details butway proecbut we approached mr. harry after

following the work of mr. obama's auto task force. given the similarities that gm faces and yrcw faces we believe he would be a tremendous help in fixing this challenging situation." now, that's the quote from this. the implication is that you're pretty agreeable to the unions and based on their experience, it's not about impugning your character in any way, shape or form. when you testify you have the republican decrcredentials. he's not talking about your character. he's just simply saying that your actions in public life are agreeable to unions. i just want to make sure that is corrected for the record and that's established. in no way is it a character assassination. that is the context of his questions and comments. i want to move on. there is a -- i want to ask the

three auto bailout task force folks mr. bloom, mr. feldman and mr. wilson about this. i want to get your comments on the record. stephen ratner, the obama administration's former car czar and one of the former colleagues and boss admitted to the detroit economic club this past december, quote, we should have asked the uaw to do a bit more. you can see the quote on the screen here. we did not ask any uaw member to take a cut in their pay, end quote. do you agree with mr. rattner that in retrospect you should have asked the uaw to make more concessions. mr. bloom? >> i haven't seen mr. ratter? 's speech and i don't know the broader context and i don't know what he means by a bit. >> my friend was -- >> you asked me if i agree with

him. i don't know whether i agree with him, do i think we should have asked the uaw to do more, my answer is no. >> no. >> i think what we did was reasonable. >> so no pay cut, fine and dandy. >> the aggregate deal that the general motors extracted from the uaw was reasonable. >>. >> okay. mr. feldman? >> again, i don't know what the context of the quote is, but i would say about the uaw is you have to remember chrysler went first. chrysler's negotiation with the uaw was led by fiat, so the deal that they established which became part of the pattern of bargaining was done by two-third parties and did not have task force intervention and no thumbs on the scale and so in hindsight, i'm perfectly content with how everything came out. so no, the answer is no. >> the answer is no. >> okay. mr. wilson. i've said publicly that i

believe that the only remaining legacy issue with general motors is pension and refunding which is an issue for the company and that i wish that the restructuring had addressed that in some way. it was the judgment of general motors management that they would keep the pension intact and we didn't intervene in that because that was with the mandate, but i believe that's an issue that could have been better addressed in bankruptcy. >> so the answer is yes? >> i think more could have been done. >> more could have been done. okay. okay. well, thank you for answering the question. i wanted to give you the opportunity to respond, this was in mr. ze wicky's testimony. mr. feldman, if you will put up slide 2. you see an e-mail that you sent on june 30, between t2009. i recognize that you're not going have instant recollection

of this. in your e-mail you ask gm to bring the uaw into the loop about negotiations over the termination delphi pension plans, stating that it could get, quote, could get messy. the obama administration con tobaccoed that it would not get in the day to day affairs of gm. it was in your place to advise gm to talk with the uaw and was this advice based on prudent bankruptcy proceedings or was it about expediency. >> i don't think it was about bankruptcy or political expediency. i think if you go back to that point in time the it made a determination that it was going to terminate both the hourly plan and the salary plan and it made the decision on the salary plan and i was reminding general motors that given their relationships with the uaw that they needed to get out in front of the communications and not

substantive advice to general motors. >> this was prior to the pbgc terminating the plan. >> correct. but if i recall, and i don't have perfect recall, but i think if you recall, the pbgc at that point had started the process of thinking of a tomorrow nation of the delphi hourly and salary plans. >> all right. thank you for putting that on the ridiculoecord. with that for the second round we'll go to mr. cummings and as i went -- what was my total time -- >> i recognize the ranking member for six minutes. >> thank you very much. >> sorry, he had to leave. i'm sure he had another engagement, but he said something that was very interesting. he said to some folks that only the federal government can bail out folks and whatever and make corporations -- i don't want to take the words out of his mouth, but that's what he implied and that's not something only the

federal government can do what the federal government was able to. in other words, when the federal government has to step in and i am glad that the federal government did step in and this situation because we were able to save millions of jobs, and i know that there are people who are working right now who would say thank you very, very much for saving my job. they are people who when their child got that notice about college, they don't have to do what the guy did in the commercial and drop his head and be able to say, i can afford that college. we can do this. there are others that are able to provide food on the tables and with their families and there are others that are able to live the life that they want to live as opposed to being on the sidelines of life doing an employment check. so i'm glad that president obama and this team did what they did.

in november 18, 2008, the new york times let detroit go bankrupt. mitt romney wrote, and i quote, a man's bankruptcy may be the only path to the fundamental restructuring the industry needs. the federal government should provide guarantees for post-bankruptcy financing and assure car buyers that their warranties are not at risk. mr. romney predicted that as a result of direct government assistance to the industries and i quote its demise will be virtually guaranteed, end of quote. mr. wilson, has mr. romney gotten it right, nearly four years since mr. romney wrote those words is gm showing signs that it is guaranteed to fail. >> i'm going to try not to interject myself in a

presidential debate. >> that's the other thing, i was very impressed and a let of people don't realize, you are an honor graduate of harvard college and the business school at harvard. so i don't want anybody to think that you are some lightweight. that's why i'm asking you. i'm serious. i heard what they were saying about you and i'll ask you questions about your background later, but you can answer the question. >> sure. i think the results for congressman cummings speak for themselves. gm had its most profitable year ever in 2011 even though auto sales have not recovered back to the normalized level and it has a cost structure and capital structure that have made it the largest and most profitable carmaker in the world. so as long as they keep on the same path and maintain the same discipline that they now have i believe the company has a bright future. >> steve rattner, the former head of the auto task force wrote in february 24, 2012, "new

york times" op-ed said it sounds like a wonderful approach although it's utter fantasy. mr. rattner wrote, and i quote, any scrap of private capital had fled to the side line, end of quote and without government financing initiated by president george w. bush in december 2008 the companies would not have been able to preserve chapter 11 reorganization. mr. wilson, mr. bloom, mr. feldman, is mr. rattner's assessment correct? do you agree that there simply were no other options available aside from complete liquidation on the path that was taken? we'll start with you, mr. bloom? >> it was our judgment, and i have no reason to question it, and it was based on extensive talking in the market and bliss our collective experience that if the government had not

provided the debtor and that general motors would not have been able and would have had to liquidate. mr. feldman? >> i completely agree. we were in touch with the largest financial institutions in the world. they were simply not going to provide capital. we spoke to the largest private equity funds in the world and they were talking about needing nine months to do diligence to make a determination as to whether they'll make an investment. it was simply, the u.s. government unfortunately was a lender of last resort, but it was the only lender in my view. >> mr. wilson. >> that's correct, sir. i talk in my written testimony, and the failure of the companies at the time, and it was those two things that made this so unusual and in normal times and even in bad, economic normal times we can find private capital and there was no one willing to step forward in any reasonable terms or any terms at all to fund even a few billion dollars much less the $80