The 31-Year-Old in Charge of Dismantling
G.M.
by David E. Sanger
Monday, June 1, 2009
It is not every 31-year-old who, in a first government job, finds
himself dismantling General Motors and rewriting the rules of
American capitalism.
But that, in short, is the job description for Brian Deese, a
not-quite graduate of Yale Law School who had never set foot in an
automotive assembly plant until he took on his nearly unseen role
in remaking the American automotive industry.
Nor, for that matter, had he given much thought to what ailed an
industry that had been in decline ever since he was born. A bit
laconic and looking every bit the just-out-of-graduate-school
student adjusting to life in the West Wing —
“he’s got this beard that appears and
disappears,” says Steven Rattner, one of the leaders of
President Obama’s automotive task force — Mr. Deese was
thrown into the auto industry’s maelstrom as soon the
election-night parties ended.
“There was a time between Nov. 4 and mid-February when I was
the only full-time member of the auto task force,” Mr. Deese,
a special assistant to the president for economic policy,
acknowledged recently as he hurried between his desk at the White
House and the Treasury building next door. “It was a little
scary.”
But now, according to those who joined him in the middle of his
crash course about the automakers’ downward spiral, he has
emerged as one of the most influential voices in what may become
President Obama’s biggest experiment yet in federal economic
intervention.
While far more prominent members of the administration are making
the big decisions about Detroit, it is Mr. Deese who is often
narrowing their options.
A month ago, when the administration was divided over whether to
support Fiat’s bid to take over much of Chrysler, it was Mr.
Deese who spoke out strongly against simply letting the company go
into liquidation, according to several people who were present for
the debate.
“Brian grasps both the economics and the politics about as
quickly as I’ve seen anyone do this,” said Lawrence H.
Summers, the head of the National Economic Council who is not known
for being patient whenever he believes an analysis is sub-par
— or disagrees with his own. “And there he was in the
Roosevelt Room, speaking up vigorously to make the point that the
costs we were going to incur giving Fiat a chance were no greater
than some of the hidden costs of liquidation.”
Mr. Deese was not the only one favoring the Fiat deal, but his
lengthy memorandum on how liquidation would increase Medicaid
costs, unemployment insurance and municipal bankruptcies ended the
debate. The administration supported the deal, and it seems likely
to become a reality on Monday, if a federal judge handling the
high-speed bankruptcy proceeding approves the sale of
Chrysler’s best assets to the Italian carmaker.
Mr. Deese’s role is unusual for someone who is neither a
formally trained economist nor a business school graduate, and who
never spent much time flipping through the endless studies about
the future of the American and Japanese auto industries.
He lives a dual life these days. He starts the day at a desk wedged
just outside of Mr. Summers’s office, where he can hear what
young members of the economic team have come to know as “the
Summers bellow.” From there, he can make it quickly to the
press office to help devise explanations for why taxpayers are
spending more than $50 billion on what polls show is a very
unpopular bailout of the auto industry.
Several times a day he speed-walks to Treasury, taking a shortcut
through the tunnel under the colonnade, near the kitchens. The
other day he talked about how sharply perceptions of the
industry’s future changed after Mr. Obama’s
election.
“At the first meeting with Rick Wagoner,” he said,
referring to G.M.’s recently deposed chief executive,
“they were in a very different place. He said publicly that
bankruptcy was not a viable option. It’s been a long process
getting everyone to look at the options differently.”
In fact, from before Inauguration Day, few in Mr. Obama’s
circle saw any other choice. Every time Mr. Deese ran the numbers
on G.M. and Chrysler, he came back with the now-obvious conclusion
that neither was a viable business, and that their plans to revive
themselves did not address the erosion of their revenues. But it
took the support of Mr. Rattner and Ron Bloom, senior advisers to
the task force charged with restructuring the automobile industry,
to help turn Mr. Deese’s positions into policy.
“The president’s instruction to us was that we had to
come up with a solution that would work on a commercial basis, that
didn’t involve indefinite federal financing,” Mr. Deese
said. “But we didn’t want liquidation, which would have
even worse effects. So the question was how do you design a very
substantial restructuring, and do it fast.”
Mr. Deese’s route to the auto table at the White House was
anything but a straight line. He is the son of a political science
professor at Boston College (his father) and an engineer who works
in renewable energy (his mother). He grew up in the Boston suburb
of Belmont and attended Middlebury College in Vermont. He went to
Washington to work on aid issues and was quickly hired by Nancy
Birdsall, a widely respected authority on the effectiveness of
international aid and the founder of the Center for Global
Development.
But he wanted to learn domestic issues as well, and soon ended up
working as an assistant for Gene Sperling, who 17 years ago in the
Clinton White House played a similar role as economic policy
prodigy. Eventually, Mr. Deese headed to Yale for his law degree.
But his e-mail box was constantly filled with messages from friends
in Washington who were signing up to work for the Obama or Hillary
Rodham Clinton campaigns. Mr. Deese chose Senator
Clinton’s.
“He was pretty quickly functioning as the top economic policy
staffer through her campaign,” Mr. Sperling said. “He
could blend the policy needs and the political needs pretty
seamlessly.” On the day that the Clinton campaign ended, Mr.
Deese left her concession speech and received a message on his
BlackBerry from a friend in the Obama campaign urging him to sign
on immediately to Mr. Obama’s team.
He resumed his policy work there, and found himself stuck in
Chicago — unable to fly to Washington with his dog — as
the economic crisis deepened. Finally, one night, he decided to get
into his car with his dog and just started driving back to
Washington. Tired, he pulled over to catch some sleep in the
car.
“I slept in the parking lot of the G. M. plant in Lordstown,
Ohio,” he recalled. The giant plant, opened during
G.M.’s heyday in the mid-1960s, is where the Pontiac G5 is
produced. Under the plan Mr. Deese worked on when he arrived in
Washington, Pontiac will disappear.
“I guess that was prophetic,” he said, shaking his
head.