Yesterday, President Obama announced that he is appointing Ron Bloom, the leader of the Auto Task Force that moved General Motors and Chrysler through bankruptcy in record-breaking time over the last year, Senior Counselor for Manufacturing Policy. Bloom, a former investment banker and union adviser, will work with Larry Summer's National Economic Council to "provide leadership on policy development and strategic planning for the President’s agenda to revitalize the manufacturing sector. He will work with departments and agencies across the administration – including the Departments of Commerce, Treasury, Energy, and Labor – to integrate existing programs and develop new initiatives affecting the manufacturing sector." He will continue to work on the Auto Task Force as well, which is now more focused on monitoring the new corporate boards rather than the more active role the task force took during bankruptcy negotiations.
In TAP's most recent issue, I have a profile of Bloom and his mentors that focuses on, you guessed it, his efforts to revitalize manufacturing for the benefit of workers and management alike.
Bloom joined [Eugene] Keilin at Lazard in the 1980s, after working as a researcher at the Service Employees International Union and getting an MBA at Harvard. Keilin, who was by then a veteran dealmaker, recalls that Bloom "came to Lazard with a union and a business background, wanting to combine the two. That was always his plan." Bloom understood a serious shortcoming of the labor movement: "Companies would come and ask unions to modify agreements in one way or another," Bloom says. "If the union was strong, it would say 'no,' and if it was weak it would say 'yes,' but it would never engage in a problem-solving dialogue looking for solutions where both parties could get better off."
Facilitating that dialogue became Keilin and Bloom's specialty when they formed their own boutique firm in 1990. They rescued manufacturing companies whose owners threatened to sell out and move, which would cut out jobs, pensions, and benefits. Often, their solution was an employee buyout of the firm, tough negotiations with suppliers, cost-cutting, and new union agreements. In 1994, after major successes such as advising unions at United Airlines in an employee buyout and restructuring steel giant LTV, the partners went their separate ways.
... Bloom went to work for the United Steelworkers (USW). "It was important that we have someone with the kind of sophisticated international understanding of financial markets and how they work," says Leo Gerard, the USW president who recruited Bloom. "He could dismantle a bullshit business plan as quick as you could bat an eye."
The policy implications of this new position are still nebulous. My understanding is that Bloom has been agitating to create this position and was able to convince both Summers and the President, but the Administration hasn't worked out what exactly Bloom will do yet; the position was announced early to make a union-pleasing appointment on Labor Day. One possible outlet, though, will be some kind of limited industrial policy, where the government uses various policy tools to advantage certain business sectors. I wanted to link to Noam Scheiber's post on the issue, but couldn't find it, so here's the Economist talking about it instead. Another, more prosaic outcome is that Bloom will simply be cleaning house and aligning different government manufacturing initiatives to increase their efficiency. Bloom and the Auto Task Force have a solid track record of accomplishment thus far, so this new position will be worth watching.
-- Tim Fernholz