Of course, after much talk of a “car czar” and then much talk about there being no car czar, Obama appointed Steven Rattner to what basically amounts to a “car czar” position anyway. So, for our purposes we’ll count Rattner as a czar, too.

The investigation has been conducted for two years by New York Attorney General Andrew Cuomo and the federal government’s Securities and Exchange Commission. The charges center on millions of dollars in fees paid by a private equity group headed by Rattner to a “middleman” group which provided access to the $122 billion New York state pension fund for Rattner’s group. While the payments themselves are not illegal, guaranteeing access to the pension fund in exchange for payments would be illegal.

Two New York state officials, Alan Havesi and David Loglisci, have been indicted on 123 criminal counts related to the investigation. Insiders claim that Rattner met with Loglisci about the investments with the pension fund.

A Treasury Department spokeswoman announced that Rattner informed the department of the pending investigation during the run-up to his appointment as head of the autos task force. The Treasury is in charge of the task force, charged with bringing GM and Chrysler back to profitability.

Rattner’s Background

Rattner spent years as an investment banker with Lehman Brothers, Morgan Stanley and Lazard Freres & Co. (where he occupied the #2 position at one point), before starting investment fund Quadrangle Group in 2000. Early in 2009, President Barack Obama appointed Rattner as head of the 24-member-strong auto task force to bring the auto industry back to profitability.

Prime Minister Fredrik Reinfeldt announced the plan, which came on the heels of former GM subsidiary Saab’s Friday filing for bankruptcy in its home country of Sweden. GM cut Saab’s strings last week, announcing that it would spin off the ailing Swedish company by the beginning of 2010.

Prime Minister Reinfeldt said that Sweden did not plan to own Saab, but it would help it find another owner after GM’s decision and the bankruptcy filing.

Retirees have hired attorneys, and 75 of them have personally written to the bankruptcy judge in charge of Delphi’s case, Robert Drain, to object to Delphi’s proposal, which would leave them without health insurance. Delphi employees use the company’s health insurance until they are eligible for Medicare at age 65. Many say they have pre-existing conditions and wouldn’t be able to find other health coverage.

Delphi responds to its retirees by saying that without the cuts, it will never emerge from bankruptcy; previous plans for reorganization didn’t account for the woeful auto sales of last year.

“If this cost is such a drag that the company won’t survive unless you eliminate it, it’s pretty serious. It’s not a position that you’re going to see very frequently taken and it puts a judge in a tough spot.” –Douglas Bernstein, managing partner of law firm Plunkett Cooney’s Banking, Bankruptcy and Creditors’ Rights Practice Group

The attorneys of retirees are asking for health care concessions, if granted, to be negotiated between the company and retirees directly as is customarily done when such cuts are made.

Other retirees object to the fact that hourly-paid union workers will retain coverage while the benefits are stripped from those who were non-unionized and had salaries.

“Nothing in life is fair, we all know that fact. But I want you to look me in the eyes and tell me that you feel it fair to take away health care from the salaried group and allow the union members to retain coverage.” — Nancy Shade, 59-year-old retiree

Yet the struggle to preserve and resurrect these companies is as vital as ever to the U.S. economy, and even to our environmental future. The Big 3 are not just another industry segment. They are world-leading organizations that can reassume that role in technology and markets with an appropriate public-private partnership over the coming decade.

If the Big-3 challenge were as depicted in the press, their failure would not only be foreordained, but without much societal loss. They are widely depicted as thickheaded dinosaurs who clung to outmoded and outsized SUVs, caved to absurd union demands, denied climate change – and thereby lost, big time. Every blast has some truth, but this one is more misleading than accurate.

Sachs maintains that the decision to focus on SUVs was a “societal decision” due to a belief that low gas prices would continue indefinitely. Sachs believes that America chose not to create higher gas mileage mandates which led to low gas mileage vehicles: “The high-mileage breakthroughs of Toyota and others emanated from national policies in Japan and Europe that pushed high-mileage vehicles with stiff gasoline taxes for decades. And indeed abroad, GM and Ford sell their own fuel-efficient compact automobiles and do so very competitively. Their downfall was in the home market.”

Sachs also blames the American healthcare system and compares it to publicly financed systems:

The burdens of health care that cripple the Big 3 are similarly societal decisions as much as collective-bargaining outcomes. The idea of saddling our firms with soaring and uncontrolled health-care costs is a policy failure, not a company mistake. Our global competitors have public financing of health care, and get much more care per buck of health care than does the bloated, inefficient, private-insurance system of the United States. One can continue down the list, and include state laws that protect auto dealers and virtually block the elimination of unwanted brands, another example of misguided policies that have contributed to the Big 3 crisis.

Sachs goes on to explain that GM can be as well-placed, in his opinion, as Toyota if it has a “public partner” going forward.

However, a separate CNN commentator disagrees with Sachs’s analysis. The dissenting analyst says that unlike what Sachs argues, electric cars will not sell in huge amounts and will also be unprofitable for both GM and Chrysler. While Sachs argues that legislating higher gas mileage will create a demand for small cars, CNN argues that there is no real demand or profit in small cars; they can, however, function as loss leaders that bring young people into showrooms and gain a customer base for later in life, and they can also improve fuel efficiency of the fleet to meet regulations. CNN further argues that winning back customers who have been burned by unreliable American-made cars is not impossible, but difficult, for GM and Chrysler as well as Ford, which is now ranked on Toyota and Honda’s reliability level according to Consumer Reports.

Another commenter answers:

“Newer cars have a lot more standard features than in the past. Think of all the air bags, electronic stability and traction control, not to mention the electronic gadgets. I remember when seat belts, power windows, power door locks were options. Airbags don’t come free!”

The bill stipulates that if an auto manufacturer chooses to discontinue a line of cars, it must then buy back the entire inventory of that vehicle from its dealerships at sticker price.

“SB1410 doesn’t look that harmful on its face. But dive into the bill, and you will be shocked at what one “Republican” is proposing to do to the free market. Basically, the bill requires that if an auto manufacturer decides to stop producing a line of cars, they are required to buy back all of the unsold inventory that dealers have. This bill eliminates all risk for auto dealers- and puts the entire risk on the manufacturers. Why would anyone want to make any business totally risk free? This makes no sense.

So, why introduce this bill now in 2009? That answer is easy. Car makers just received $25,000,000,000 (BILLION) in cash from the federal government. The point of this cash outlay was to give them time to reorganize without declaring bankruptcy (i.e. possibly eliminate some lines of under-performing brands). So this bill is basically a money transfer from the auto makers to the auto dealers should a line of cars be done away with. If every state did this, the entire federal auto bailout would go to car dealerships instead of the manufacturers!! But worst of all IT IS YOUR MONEY that went to the manufactures to save the industry that Norment is trying to grab!!! Will Congress have to pass a SECOND AUTO BAILOUT because greedy state leaders stole the federal cash they got to the manufacturers?“

The bill’s sponsor in the Virginia Senate is also part-owner of a Dodge dealership, Senate Majority Leader Thomas K. Norment, Jr. The bill is opposed by automakers, including Volkswagen, which has its United States operations based in Fairfax County, Virginia.

Norment asserts there is no conflict of interest in his introducing the legislation, since it affects all his competing dealerships as well. His Yorktown, Virginia Dodge dealership has been struggling during the recession. The state overall has 525 dealerships of new cars, with 25 lost during the past year’s economic downturn.

The bill has led to a legislative lobbying battle between auto manufacturers and dealerships, which has mostly stayed off the radar for Virginia taxpayers. The Alliance of Automobile Manufacturers sent a letter saying the terms of the legislation were “protectionist” and would cost carmakers billions. The Virginia Automobile Dealers Association counters that 22 other states have enacted similar legislation. The VADA gave more than $400,000 to lawmakers during the 2007 election cycle.

“Clearly, I don’t have a conflict of interest from a legal standpoint. Perceptually, someone might raise the question that, ‘As a minority owner of a dealership, isn’t there an incidental benefit to you?’”– Thomas Norment, Jr.

Nissan is Japan’s third-largest automaker, after Toyota and Honda. The net loss of jobs (20,000 out of 235,000) is almost 10% of Nissan’s workforce. Additionally, Nissan announced its intention to move production of its cars from Japan to the United States and seek “government assistance” from both Japan and the US.

Megan McArdle writes that Nissan’s move is highly unorthodox for a company springing out of Japan’s “highly nationalistic” culture.

The only question left is who, exactly, will fill the post.

A leading candidate for the position of “car czar” is said to be Steven Rattner, a partner in the private-equity firm Quadrangle Group in New York City.

Speculation is rife that, if not the car czar, a key member of the car czar’s team will be analyst Stephen Girsky, who leads a private-equity firm. Girsky has consulted for General Motors and recently advised the UAW in its efforts for federal loans. On February 4, Girsky attended meetings on auto issues with House Speaker Nancy Pelosi and other Congressional leaders.