Rattner Defends Bailout With Old Talking Points

Bertel Schmitt
by Bertel Schmitt

Ford did not receive a government bailout. Not directly. It would have gone down the tubes along GM and Chrysler, if they would have been allowed to die, Steve Rattner, the head of the auto task force, told Bloomberg.

Said Rattner:

“Ford would have closed because it wouldn’t have been able to get parts, because the parts industry in this country was in arguably worse shape than the assemblers.”

Rattner repeated another favorite talking point of bailout supporters, namely that the U.S. government was the only entity that could save the domestic automakers because no one, including banks that were dealing with their own financial crises, was willing to put private capital into GM and Chrysler at the beginning of 2009.

But then, as the head of the taskforce, what should he say?

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • David Dennis David Dennis on Oct 09, 2012

    I don't think anyone seriously believes that nothing should have been done about the grim fates of GM and Chrysler. It would have been politically impossible to let them fail totally, and for proof of this, just note that President Bush approved of a bailout plan just strong enough to give Obama the reins. Obama's plan seems to have been designed to keep GM out of bankruptcy court, but GM wound up declaring bankruptcy anyway. So it seems like the bail out money itself was pretty much wasted. So how about this? GM should have declared bankruptcy on its own, the government should have offered debtor in possession financing if no private bank would have done it, and the normal bankruptcy procedure should have been followed. At least that is my impression. Is there anything wrong with my plan? That probably would have given bondholders a lot more money and unions less. But there would have been many fewer accusations of cronyism and it's possible a lot of the bailout stigma could have been avoided, or at least reduced. D

    • Pch101 Pch101 on Oct 09, 2012

      "Obama’s plan seems to have been designed to keep GM out of bankruptcy court" I have no idea where you're getting that. "GM should have declared bankruptcy on its own" GM did file bankruptcy (and you just managed to contradict yourself.) "the government should have offered debtor in possession financing if no private bank would have done it" The government did just that, for the reasons that you just stated. "the normal bankruptcy procedure should have been followed" It was. "Is there anything wrong with my plan?" Everything that you claimed to want was done. It seems that you don't really understand what happened with the bankruptcy, and your complaints are based upon your lack of understanding, instead of what actually happened.

  • Jimboy Jimboy on Oct 09, 2012

    Arguing about the auto bailout is a moot point. Once the feds decided to bail out the very first financial institution, they were pretty much forced into bailing everything out, including Ford, BTW, since they were the only Detroit automaker that received the $6.9 billion DOE 'loan' to develop fuel efficient vehicles.

    • Bd2 Bd2 on Oct 10, 2012

      Don't forget that Ford Credit received more in bailout $$ than GMAC.

  • Jellodyne Jellodyne on Oct 10, 2012

    Original article: "Watch me generate 100+ comments regurgitating last year's counter-talking points" I agree completely

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