By on November 22, 2010

Ever since the auto bailout began, the majority of Americans have opposed the government’s efforts to fund and restructure the auto industry. As recently as July, polls showed that 56 percent opposed the bailout, according to the Detroit News. But now a new Rasmussen poll shows that opposition has fallen to 46 percent with 38 percent in favor and 16 percent unopposed, the first time a poll has found less than 50 percent opposition to the auto bailouts. 70 percent of Americans now believe GM will still be in business a decade from now, and 50 percent believe the government is either “somewhat” or “very” likely to be repaid by GM and Chrysler. Of course, the Treasury still believes that it will lose some $17b on the auto bailout, but then you don’t exactly hear that trumpeted by the White House.

What you do hear about the auto bailout is an increasing tone of triumphalism, an endless repetition of the phrase “the critics were wrong.” And yes, the auto bailout has certainly progressed better than some of its harshest critics here a TTAC might have imagined. But if, over a year after the bailout ended, some 46 percent of America still opposes the government’s intervention in GM and Chrysler, marketers for both of these companies (not to mention the politicians) should sit up and take notice. After all, the “success” purchased with that $80b still depends on the goodwill of the American people, and if the bailout-haters never drop their grudge, GM and Chrysler’s already-overblown “success” won’t last. And for all the “Mission Accomplished” moments since GM and Chrysler emerged from bankruptcy, we still haven’t heard a compelling pitch to the resilient anti-bailout plurality.

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37 Comments on “Majority Of Americans No Longer Oppose Auto Bailouts...”


  • avatar
    FleetofWheel

    The part that seems contradictory is when bailout boosters tout recent GM car sales and the IPO as vindication of the govt intervention but still say they want to avoid further govt involvement (not counting the way out there Ralph Nader Peoples Factory wing).
     
    So if this GM rehab went so well, why not do it for the chain of Midwestern coffee shops that is failing,  the wooden toy mfg who has seen better times, the shoe mfgs, and so on?

    • 0 avatar
      SVX pearlie

      Those coffee shops and toy stores don’t have huge numbers of Union employees on the rolls.

    • 0 avatar
      carguy

      The Coffee shop probably doesn’t have 1 million+ jobs associated with it.

    • 0 avatar
      FleetofWheel

      So those coffee shops don’t have suppliers?
      You don’t care about the families (maybe SEIU workers) of all involved?
      You don’t see the large numbers of jobs that exist in the aggregate of all failing businesses?

    • 0 avatar
      Telegraph Road

      Auto manufacturing has an extremely high employment multiplier, which is why nations and states compete aggressively for it.   Restauranting, like all forms of retailing including auto retailing, has an extremely low employment multiplier.  One restaurant’s loss is another’s gain, all in the same local market.

  • avatar
    gslippy

    Well, observers on both sides of the aisle are shocked that both Bill Clinton and George W Bush were each elected twice.  Neither side can believe the American public is that stupid.

    So I don’t know what 46% means. The data likely reflects the way the question was phrased.

  • avatar
    SVX pearlie

    GM is turning real profit, with competitive cars in the real world, and real innovation (Volt), and they’re repaying some of the money in real dollars. That’s probably what the poll is reflecting

    If GM were just as dire as Chrysler (continuing losses, lousy cars, mere reskins of old cars, no hope of repayment), people would be rightly justified in getting out the torches & pitchforks.

  • avatar
    caljn

    Why should the anti-bailout “no longer” plurality be pitched to? Because their feelings were hurt? No one asked me if I consented to two far more expensive, unnecessary, fund diverting, life destroying, nations soul crushing wars.
    Do we really believe the economy would have been better served by letting the industry die and then to be in far deeper then we are now? Why? To serve some right wing ideology?

    And somehow, yes, I can argue saving GM versus saving some small midwestern coffee shops, and the only thing “shocking” about comparing the two Clinton terms with the two GWB terms is that one was wildly successful.

    • 0 avatar
      geeber

      Last time I checked, GM and Chrysler did not constitute the entire domestic industry in 2008. Ford, Honda, Hyundai, Nissan and Toyota all designed, engineered and built vehicles here at that time. It might be a good idea to check the calendar – it’s not 1965 anymore.

    • 0 avatar
      geozinger

      @geeber: I can remember when Toyota ran commercials in my part of the upper midwest boasting about their 10 manufacturing plants in North America. Big fat hairy deal. Even after the BK, GM still has 56 plants in the US alone.
       
      Does GM and Chrysler constitute the whole industry? No, but they’re a big part of it. You can piss and moan about the UAW getting an inside deal, and maybe in a perfect world it wouldn’t have worked out this way. Wish in one hand, and spit in the other. See which fills up first.
       
      However, our economy likely could not have sustained massive increases to the unemployment rolls during 2008-09. We were facing enough job losses as it was, and to add that amount of people would have been fuel to the flame. A heaping bowl of not good.

    • 0 avatar
      geeber

      It doesn’t matter how many plants GM has if not enough people want to buy the vehicles that come out of them to keep the company profitable.

      GM is supposed to be a private company that builds vehicles people want and sells them at a profit. It is not a social welfare agency designed to ensure that no UAW member or white-collar employee ever loses his or her job.

  • avatar
    tparkit

    First, count me among the “Hell NO!” against. If I buy a car built by the government, or by their proxy the UAW, I’m just an enabler. I’ll never give an inch on that position, not now and not 20 years from now.

    Second, GM is currently benefiting from displaced former Chrysler buyers (Chrysler sales volumes have been far below the levels of just a few years ago, and those buyers had to go somewhere… I think they went disproportionately to GM, the closest market segment alternative.) That is over, and can’t contribute to future growth.

    Third, sovereign wealth funds – many controlled by dangerous enemies such as China – will take an increasing share of GM stock as they try to get their dollar holdings into something that might hold value better than paper money. I have no interest in helping these people out, whether by buying stock or vehicles. (The foreign ownership angle was played down for political purposes at IPO time, but will start creeping back. Purchases will be made through fronts like European banks.)

  • avatar
    ash78

    I think some of these people might be confusing a principled “opposition” with an admission of “Well, damn, I guess that did turn out a little better than expected.” There’s a huge, important difference between those two lines of thought.

  • avatar
    Advance_92

    Nothing wrong with reminding people, considering how strident and offensive much of the anti-bailout rhetoric was.  Particularly tied in with all the socialism/big brother blather that’s still de rigueur in some circles.

  • avatar
    Sugarbrie

    If the real rightful creditors had taken over GM, does anyone honestly think that they would have just let it die, losing all their investment as a result?  The only way the real creditors would get their money back would be to restructure  the company and sell it.  The exact same thing the government did.
     
    The only thing different is the unions would have taken a big haircut in a traditional restructuring.  All we have really witnessed is the government stealing the creditors equity and giving it to the unions.
     
    The part about the taxpayer getting repaid is also a shame.  The old GM corporation still exist.  This is a totally new corporation.  But somehow the $45 billion in tax credits and net operating losses have been given to the new GM.  There really is no legal way to do this. Those tax benefits belong to old GM and those claimants.
     
    So new GM is just paying back the taxpayer with other taxpayer money shoved through the back door as tax credits.  There really is no repayment.

    • 0 avatar
      psarhjinian

      The real rightful creditors would have been whom, exactly?
       
      Under normal bankruptcy law, that would have been the largest secured creditors, which would have been….  Oh, wait, it would have been the American and Canadian governments, as well as the UAW, wouldn’t it?  After all, that’s who GM owed the most money to.
       
      Let’s do this one more time:  Bondholders are not front-of-the-queue in bankruptcy, holders of secured debt are.  Who was GM’s biggest secured creditor?  The government, thanks to the bailout that GM went cap-in-hand for.

    • 0 avatar
      geeber

      How, exactly, was the UAW a secured creditor of GM? Had it loaned money to GM? Pensions do not constitute a secured interest in a company.

    • 0 avatar
      hubcap

      I just wonder how many of the bondholders who got shorted had secured bonds. IMO, no matter which why you look at it the union got benefits/preference that they didn’t deserve.
      So now you have a UAW who owns part of GM and Chrysler (both get favorable treatment from the UAW) while Ford goes it alone (can you say conflict of interest).
      And it must be nice to have two totally different corporations. New GM and Old GM. Yet old GM gets to keep all of the liabilities and new GM gets to bring forward the losses from old GM (I thought they were two separate companies).
      But all of this is but a pimple on a gnat’s a@@ compared to the Wall Street bailouts.
       
       
       

    • 0 avatar
      psarhjinian

      One, GM’s VEBA obligations constituted secured debt, I believe.  Recall the VEBA was a way for GM to avoid paying those obligations, and one that came back to bite them.
       
      Two, it doesn’t matter if GM’s bondholders were secured.  They generally weren’t, and even if they were they’re still behind debtholders.  GM had no cash, lots of debt, and no buyers lined up to buy what assets they did have, or at least buy them at a price that would allow the bondholders to see a penny, considering they filed right at the start of a credit crunch.
       
      The Union got preferential treatment, but it’s not like the government was awash in offers for GM’s debt at the time.  People forget that, just as they forget that bondholders aren’t entitled to anything, and that the bondholders actually did very well at the taxpayer expense—better than they would have had the government just said “Aww shucks, let’s just walk away from the loans to GM and Chrysler!”

    • 0 avatar
      Robert Schwartz

      psarhjinian: pension obligations are not secured credit. A secured creditor is one who has recorded a mortgage or filed a financing statement identifying the collateral in the proper public office. Secured creditors are almost always banks and bondholders.

    • 0 avatar
      psarhjinian

      The VEBA arrangement was different from standard pension obligations, though.  If I recall correctly, GM (and Ford, IIRC) was fool enough to fund it with equity.

      And bondholders can be secured, yes, but they’re rarely ahead of secured creditors. That’s why the refrain of the bondholders getting screwed, combined with the “no cash, no buyers” thing, doesn’t really lend credence to bankruptcy being broken.

    • 0 avatar
      Sugarbrie

      psarhjinian…  I was referring to no bailout.  There would be no government debt.
       
      Those government loans is how they stole it.   The government loaned just enough money to make the rest of the debts worthless, after they claimed their debt to be superior to all other debt.

      This is what people do not understand. The moment creditors take over, the company has no debt. The creditors as a group don’t owe themselves. They then clean things up and sell it to get their money back (sound familiar). GM is suddenly profitable because they have smaller debt payments. This would have happened in a normal bankruptcy-reorganization.
       
      This is how they took control of (stole) Fannie and Freddie as well.  With people paying interest and principal every month on $5 Trillion of mortgages, how could they run out of money, even with the defaults?   Remember they seized them in 2008 before the defaults started.

    • 0 avatar
      geeber

      But treating the stocks and any bonds held by the VEBA differently from the stocks and bonds held by “regular” individuals and organizations is not standard procedure in bankruptcy cases.

      The simple fact is that the UAW was NOT a secured creditor. It was, at best, a shareholder, if we are using the shares promised to the VEBA as a guide. Therefore, like other shareholders, it should have received basically nothing. But it received preferential treatment solely out of political considerations. The simple fact is that standard bankruptcy procedure was not followed in this case.

  • avatar
    Sammy Hagar

    But this is the way feigned anger is supposed to work!

    Last Month —> “Government Motors Bailout Gives Nation Case of Red Ass!”

    This Month —> “Hands off my junk!”

    Next Month —> “Feline-related pandemic scares everybody into watching more cable news.”

    Let’s be honest: We have short attention spans & can’t be bothered to maintain a grudge from news-cycle to news-cycle. I’m sure that right now, more people are concerned with the judging on “Dancing w/the Stars” than things like auto-bailouts, North Korean nuclear proliferation, the PIGS economic fiasco, etc. Why? Because we’re turning into a nation of gnats…

  • avatar
    Telegraph Road

    After all, the “success” purchased with that $80b still depends on the goodwill of the American people, and if the bailout-haters never drop their grudge, GM and Chrysler’s already-overblown “success” won’t last.
     
    If GM can be successful in the present environment–and I think a $2B Q3 profit can be described as a success rather than a “success”–with all the bashing it gets from market fundamentalists who want it to fail to prove out their ideology, it will last.

  • avatar
    John Horner

    The American public is nothing if not fickle, and their mood changes in part based on what the opinion leaders on TV are saying.
    90% of people (at least) are habitual followers. This is how you get such nonsensical swings in polls and voting patterns. It all depends upon which talking head they are following today. Individual critical thinking about the topic at hand is rare.
     
     

    • 0 avatar
      vww12

      I’ll be laughing when there is 20% annual inflation, and the government does not have money to pay its debts anymore, and GM finally keels over.
      I’ll be reminding people their inflation and their bankrupt government comes in part from their 2008 bailout.

    • 0 avatar
      mikey

      20% inflation, and a bankrupt government ?….I’m struggling to find the humor there,  but whatever floats your boat.

    • 0 avatar
      Robert Schwartz

      The government is already printing money to pay its current obligations.

    • 0 avatar
      psarhjinian

      Inflation is highly unlikely.  The reverse?  Not so much.

    • 0 avatar
      geeber

      There is inflation…check food and fuel prices. The only reason food prices haven’t gone up all that much is because many manufacturers and super markets are “eating” some of the cost increases. Manufacturers are also charging the same prices for smaller quantities.

      The official inflation rate is also held in check by the way housing prices are calculated. It’s worth noting that things such as cars and electronics are not increasing.

      You don’t have to buy a new house, car or flat-screen TV every month, but you do have to purchase food and fuel.

  • avatar

    I remain opposed. GM’s chronic mismanagement and continued failure to produce a small car that Americans will buy  should never have been rewarded with a bail-out.
    And yes, before you ask, we’re cousins.
     

  • avatar
    grzydj

    Americans as a whole are becoming used to the whole idea of corporate welfare, considering we’ve been at it for 60 plus years now.

  • avatar
    Disaster

    The majority of Americans will change their mind when GM sinks for the 2nd time.


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