AutoGuide News Blog
The AutoGuide News Blog is your source for breaking stories from the auto industry. Delivering news immediately, the AutoGuide Blog is constantly updated with the latest information, photos and video from manufacturers, auto shows, the aftermarket and professional racing.
As we head towards another presidential election, it seems the Republican nominees can’t seem to get enough of criticizing the way in which the Obama administration handled the financial bailout for Chrysler and General Motors.
According to a recent Gallup poll around 51 percent of Americans still view the bailout in a negative light. Nonetheless the Obama administration is fighting back, one avenue being a patriotic TV commercial that’s set to air tonight. Called “Made in America,” the commercial declares, “for generations of Michigan autoworkers it’s more than a slogan; it’s a way of life,” yet it typical political rhetoric it also says, “but when a million jobs were on the line, every Republican candidate turned their back.”
In perhaps a canny political move, the commercial will only be seen in Michigan, which is, amusingly enough the next location for the Republican primaries, where the likes of Mitt Romney, Rick Santorum and Newt Gingrich will battle it out in an effort to increase their chances in becoming the next Republican nominee.
The ad also points the finger at Romney, citing his 2008 New York Times article which declared “Let Detroit go bankrupt,” yet conveniently avoided the fact that the bailout was initially put together while a Republican was in the White House; namely George W. Bush, whose administration allocated the original $25 billion in federal loans. Some things never change. Click below to view the ad.
During the closing speech at this year’s National Automobile Dealers’ Association convention in Las Vegas on February 6, former president George W. Bush said he’d bail out US automakers again in a heartbeat if he had to.
Speaking in front of some 22,000 dealers from the US and around the world, the former president (shown above visiting the GM plant in Fairfax, KS while still in office), said that although he was a firm believer in the free market economy and corporations having to pay for consequences resulting from bad decision making; he also believed stepping in to save Chrysler and General Motors was the right thing to do.
“Sometimes circumstances get in the way of philosophy,” he said, yet if it came down to saving the US auto industry, “I would make the same decision again.”
While still in office, Bush pushed through a rescue package of some $25 billion in emergency aid; $4 billion set aside for Chrysler, while some $13.4 was allocated to GM. This was followed by an additional $60 billion from the Obama administration in 2009.
Chrysler paid back its loans last May, six years ahead of schedule and posted a net profit of $183 million for 2011, it’s first time in the black since 2005. GM, so far has paid back about $23 million of the money it borrowed, though some 26 percent of the company is still owned by the US Treasury.
Bush’s speech at the NADA convention was littered with humor, including remarks that he missed some of the perks of being C-in-C. “I had to stop at some of the stoplights coming from the airport,” he said, jokingly.
[Source: Detroit Free Press]
Never far from controversy, former Vice-President Dick Cheney has stirred the pot again, this time, declaring that he was against government handouts to automakers Chrysler and General Motors.
In his new memoir ‘In My Time,’ Cheney states “Although I understood the reasoning, I would have preferred that the government not get involved and was disappointed — but not surprised — when the Obama administration significantly increased the government intervention in the automobile industry shortly after taking office.”
That said, Cheney was in favor of saving the nation’s banks, even though many economists believe it was their recklessness that caused financial turmoil in the first place. In reference to America’s financial institutions he remarked that “providing sufficient support to avoid the collapse of our banking system was something only the federal government could do. But, all things considered, companies in the private sector should be judged in the marketplace. Having the government intervene was not, in my opinion, a good idea.”
Nevertheless despite the views of his V-P and some members of Congress, then President George W. Bush approved a partial rescue package for Chrysler and GM, with some $17.4 billion set aside for both automakers, plus an additional $7.5 billion for their financial arms, GMAC and Chrysler Financial Services.
In reference to the bailout, Bush stated that, ”the immediate bankruptcy of the Big Three could cost more than a million jobs, decrease tax revenues by $150 billion and set back America’s GDP by hundreds of billions of dollars,” though he did say,”it was frustrating to have the automakers’ rescue be my last major economic decision.”
As it stands today; Chrysler has paid back its portion of the loan provided under the Obama Adminstration, not the Bush loan, which has been written off. General Motors has paid off all the loan money it received, but unless it’s second Public Offering of shares sees a sizeable jump in the stock price, it is unlikely GM will be able to recoup all of the money invested in it by the US Treasury.
Getting back to Cheney, the auto bailout isn’t the only thing in his memoir likely to raise hairs, he also makes comments declaring that the invasion of Iraq hasn’t hurt America’s reputation overseas. Cheney’s memoir has been on sale at bookstores since last Thursday.
[Source: The Detroit Bureau]