By on July 30, 2009

Words are cheap. Detroit bailouts are expensive; the feds have spent more than $100 billion on the Motown meltdown. But don’t worry. Be happy. According to Reuters, “President Barack Obama said on Wednesday that General Motors and Chrysler Group were companies worth saving, but he expects both to repay their government loans.” But? The Prez made his prediction to celebrate the latest stats from the car buyers’ bailout (a.k.a. Cash-for-Clunkers or C.A.R.S. program). Even Reuters isn’t buying that one—much. Apparently, it’s all about the mix. “The impact on GM, Chrysler and Ford Motor was not immediately clear with passenger car sales outpacing those of pickups and sport utilities.” Translation: the Big Three need pickup and SUV sales to survive. Fair dinkum, albeit on a very, very small scale in this case. It gets better/worse . . .

“If GM and Chrysler were willing to do what was necessary to make themselves competitive and if taxpayers were repaid every dime they put on the line, it was a process worth supporting,” Obama said in Raleigh, North Carolina.

“We saved hundreds of thousands of jobs as a result and expect to get our money back.”

Funny, I thought the bailout helped Chrysler and GM cut jobs. Oh wait; I remember: the federal money allowed them to cut jobs with big buyout packages, paid for by the U.S. taxpayer. No, that’s not it. I mean it is, but ALL those jobs would have disappeared completely without the bailout. Right? Total economic catastrophe. That kind of thing.

As much as I like the word “if” (it’s so much more realistic than “Yes we can!”), three questions. First, who decided “what was necessary”? Second, how much faith do we have in them? And third, what are the odds the automakers will repay every dime “invested” Chrysler and GM?

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15 Comments on “Bailout Watch 574: President Obama on Chrysler, GM Bailouts: “We’ll Get Our Money Back”...”


  • avatar
    Lokkii

    Well, I suspect that the government is going to have to take payment in kind rather than cash.

    I predict that Government employees are going to be driving Aveos and Calibers (taken as payment at full retail) for decades to come. Watch for your Postman in one soon~!

  • avatar
    Geo. Levecque

    I suspect that all Governments that gave money to the Detroit two will be like a drop in the Ocean,I also think that the Money loaned will never be paid back, have you seen the large amounts of Cash and Vehicles that New members of the new General Motors Board are getting? Its quite a bit in my humble opinion!

  • avatar
    Samuel L. Bronkowitz

    They’ll get their money back?

    BWAAAHH-HA-HA-HA-HA!

    That’s funny. That’s a good one. That’s rich…

    I guess under a government-run economy with a state-run media if you say you’re going to get your money back then it must be true.

    Thank goodness for TTAC and other such sites…

  • avatar
    Lug Nuts

    In other breaking news, porci are reportedly sprouting feathered appendages throughout central MI and, for the first time ever, a bovine has successfully completed one lunar orbit.

  • avatar
    highrpm

    “I’ll pay you back.” Good one. A few other recent GM quotes:
    “it’s the perception gap”
    “it’s the recession”
    “rich people buy Tahoes and don’t care about gas prices”
    “we have no plans to file for bankruptcy”
    “this car will save our company”

    Would you buy a car from someone that’s spewing out lines like these?

  • avatar
    Billy Bobb 2

    Reminds me of the broke guy at the horse track.

    “Just lend me another $100 and I’ll put you at the top of my IOU list”.

  • avatar
    Bigsby

    I suspect that there is an as yet unannounced part two to the saving of the US car companies: a de facto restriction on imports, however cleverly it is worded and pitched.

    Sometime within the next year, the Obama administration will come out with a law whose principal effect will be to force people to buy domestic, at least in such numbers that the US car companies are guaranteed survival and prosperity.

    Consider this to be the “level playing field” that the UAW/CAW have been pushing for many years now. The US is the only nation in the world where national car companies are not in some way guaranteed through government restrictions on foreign based competitors.

  • avatar
    psarhjinian

    I suspect Chrysler and GM will pay off the debts about the same time that we actually finally find WMDs in Iraq and the dictionary definition of “sexual relations” is rewritten to exclude fellatio and penetration by cigar.

  • avatar
    wsn

    I will post here since no one noticed:

    Honda has returned to be profitable in the last quarter.

  • avatar
    fincar1

    This is what we get for electing a president who has NO knowledge of economics. Has he ever said one word or made one decision to make you think otherwise?

  • avatar
    jkross22

    All you Obama haters are wrong. Just watch a speech and drink some of the Kool-Aid. Here, it’s really good. Mmmmm.

  • avatar
    wsn

    fincar1 :
    July 30th, 2009 at 11:50 am

    This is what we get for electing a president who has NO knowledge of economics. Has he ever said one word or made one decision to make you think otherwise?

    —————————————

    The point of a democracy is not to find a genius to run the country. Instead, the point is to limit the power of the ruler, so that he doesn’t do too much damage to the country in his term. Hitler was a genius in many areas, but Germany didn’t fare better…

    The problem with the current government is not about Obama not knowing economics. It’s about his party controls both the Congress and the Senate as well. Plus, the executive branch frequently intervene with the judicial branch.

    It’s practically a dictatorship. Currently, Chairman Hu Jintao is less of a dictator in China than Obama is one in the US. Hu faces more resistance from his own party than Obama faces from both parties.

  • avatar
    Bunter1

    “We saved hundreds of thousands of jobs as a result and expect to get our money back.”

    I want to nominate President Goodwrench for a “Lutzie”.

    I hope to change the winner of that award.

  • avatar
    PeteMoran

    With “The Rat” Rattner standing in that pic and what I thought was a scuba tank to the right, I assumed all those people were REALLY short….

  • avatar
    agenthex

    This is what we get for electing a president who has NO knowledge of economics. Has he ever said one word or made one decision to make you think otherwise?

    That’s particularly cute coming from people who’ve demonstrably NEVER taken an econ class (or even read the entry on wikipedia for that matte).

    If there’s to be serious criticism of the pres, and not cheap pot shots, it’s going to be how our political process is systematically beholden to the interests of the wealthy over the interests of the little people.

    Notice how when a worker who actually produces something worthwhile gets tens of thousands of dollars, it’s political pandemonium, and when goldman pays out hundreds of thousands to the paper pushers who creates the mess, nobody questions the people who bring about the kind of fake wealth that leeches off everyone else.

    Currently, Chairman Hu Jintao is less of a dictator in China than Obama is one in the US.

    That’s funny. Really, no one else plays in the big leagues of massive corruption like the chinese communist party.

    Do you think ANYONE in that cabal stands a chance, however minute, of getting elected?

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