The wildly successful auto industry bailout

Chrysler announced today that it is repaying $7.5 billion to the U.S. government years ahead of schedule. Meanwhile, GM has announced it will hire thousands of new workers in the U.S. after a successful IPO.

The bailout of the U.S. auto industry in 2009 by the Obama administration was very unpopular, but it will go down as one of the shrewdest decisions of President Obama. Letting GM and Chrysler go through a bankruptcy liquidation would have killed thousands of jobs and possibly turned the recession into a depression. Thousands of auto suppliers would have been insolvent immediately, thus creating even more job losses.

Most on the right, including presidential candidates Tim Pawlenty and Mitt Romney, opposed bailing out the auto companies. Mitt Romney even penned an op-ed arguing that we should let Detroit go bankrupt. They look like fools now, and the Democrats just released a preview of how this issue will be highlighted in the 2012 campaign, particularly in the Midwest.

Mitch Ablom blasts Republican Senators for risking US economy

Mitch Ablom lets them have it.

Do you want to watch us drown? Is that it? Do want to see the last gurgle of economic air spit from our lips? If so, senators, know this: You’ll go down with us. America isn’t America without an auto industry. You can argue whether $14 billion would have saved it, but you surely tried to kill it.

We have grease on our hands.

You have blood.

Kill the car, kill the country. History will show that when America was on its knees, a handful of lawmakers tried to cut off its feet. And blame the workers. How suddenly did the workers — a small percentage of a car’s cost — become justification for crushing an industry?

And when did Detroit become the symbol of economic dysfunction? Are you kidding? Have you looked in the mirror lately, Washington?

In a world where banks hemorrhaged trillions in a high-priced gamble called credit derivative swaps that YOU failed to regulate, how on earth do WE need to be punished? In a bailout era where you shoveled billions, with no demands, to banks and financial firms, why do WE need to be schooled on how to run a business?

Who is more dysfunctional in business than YOU? Who blows more money? Who wastes more trillions on favors, payback and pork?

At least in the auto industry, if folks don’t like what you make, they don’t have to buy it. In government, even your worst mistakes, we have to live with.

And now Detroit should die with this?

In bed with the foreign automakers
Kill the car, kill the country. Sen. Richard Shelby, Sen. Bob Corker, Sen. Mitch McConnell, your names will not be forgotten. It’s amazing how you pretend to speak for America when you are only watching out for your political party, which would love to cripple unions, and your states, which house foreign auto plants.

Corker, you’ve got Nissan there and Volkswagen coming. Shelby, you’ve got Hyundai, Honda, Mercedes-Benz and — like McConnell — Toyota. Oh, don’t kid yourself. They didn’t come because you earned their business, a subject on which you enjoy lecturing the Detroit Three. No, they came because you threw billions in state tax breaks to lure them.

This was pure politics. Ironlically, these GOP Senators think they are “rebranding” the party in a pathetic attempt to regain support after two disastrous elections. Yet people are starting to see through their bullshit.

There are times when leaders need to put aside politics and ideology to do what is necessary for the good of the country, even when it’s not popular, and even when a compromise solution is not perfect. These Republican Senators passed on their responsibility, even when all other parties, like Speaker Pelosi and George W. Bush, all compromised to get something done. They chose to demonize workers and unions. Of course the unions have made mistakes and we need further reform, but many others are at fault as well, particularly auto executives AND Republican congressmen who for years fought attempts to raise mileage standards to start weaning us off of foreign oil and gas-guzzling cars.

Blame the workers; blame the poor. With this economic crisis, we’re seeing a pattern here from many Republicans. Is it good politics? I don’t think so. I think they will pay for this for years.

Senate Republicans kill auto compromise

The Republicans hate the UAW, and they’re willing to risk our entire economy unless they see clear worker concessions.

Republicans bail out their banking friends, but they’ve turned their backs on millions of blue collar workers.

Now it’s up to the Bush administration. Does Bush want to see the collapse of the auto industry as the final act of the most pathetic presidency of our lifetimes?

Dodd gets behind bailout for auto industry

Finally! The automakers need wavering Democrats like Dodd to get behind the proposal. Dodd indicated hedidn’t want to play “Russian Roulette with the economy of the United States” by letting these companies fail.

Automakers finalize turnaround plans for bailout money

It looks like the automakers will have plans ready for Congress by Tuesday, and the Big Three should be getting some concessions from the UAW as well.

Bailing out the auto companies

What should we do about the auto companies? It’s infuriating to think that we would have to bail them out, given the mismanagement over the years. On the other hand, the economy is on the brink, and letting GM go under in this environment could take down the entire economy. Also, given the financial bailout, throwing another $25 – $50 billion to save Detroit doesn’t seem like an outrageous idea.

Of course, the devil is in the details. Many, like Tom Friedman, want to throw out management as part of the deal. This doesn’t make sense. Certainly, Rick Wagoner and the rest of the braintrust at GM made tons of mistakes, but in the past year they have made substantial progress on innovative cars like the Chevy Volt and big changes to their cost structure with the UAW. Without the financial crisis they had a credible path to recovery. Ford is in less trouble, and their new CEO should not be blamed for past mistakes.

The real issue is how many strings should be tied to the bailout. Obama wants to see real progress towards building green cars here in the United States. Investing in this area would have significant short-term and long-term benefits. The cars companies are already moving in this direction, so getting agreement on these points may be possible.

The bigger issue raised by Friedman relates to those in Congress who supported the auto industry and their disastrous policies.

The blame for this travesty not only belongs to the auto executives, but must be shared equally with the entire Michigan delegation in the House and Senate, virtually all of whom, year after year, voted however the Detroit automakers and unions instructed them to vote. That shielded General Motors, Ford and Chrysler from environmental concerns, mileage concerns and the full impact of global competition that could have forced Detroit to adapt long ago.

Indeed, if and when they do have to bury Detroit, I hope that all the current and past representatives and senators from Michigan have to serve as pallbearers. And no one has earned the “honor” of chief pallbearer more than the Michigan Representative John Dingell, the chairman of the House Energy and Commerce Committee who is more responsible for protecting Detroit to death than any single legislator.

This has led to a huge battle currently brewing in the Democratic caucus in the House.

In the first big post-election clash on Capitol Hill, two House heavyweights are battling to lead an influential committee that will have jurisdiction over global warming in the new Congress.

The fight pits California Democratic Rep. Henry Waxman, a key ally of environmentalists, against Democratic Rep. John Dingell of Michigan, who has ties to the auto industry. Waxman is trying to oust Dingell as chairman of the House Energy and Commerce Committee.

While Waxman supporters say they think they’ve got enough votes to prevail, Dingell is fighting hard to keep the position.

In an interview with WJR radio, he called Waxman an “anti-manufacturing left-wing Democrat” and said it would be a mistake to have him in charge, particularly with the auto industry struggling.

If Waxman is successful in his attempted coup, it means that two Californians would take leading roles in the contentious debate over global warming. Democratic Sen. Barbara Boxer is the head of the Senate’s environmental committee, which has jurisdiction over the issue.

The 82-year-old Dingell, the most senior member of the House, has long resisted higher fuel standards and tighter limits on greenhouse gases.

Dingell needs to go. He’s a slave to the auto lobbyists, and nothing will get done if he’s blocking the move towards alternative fuels in the House. Hopefully, Waxman will prevail.

Related Posts