Bailout Watch 574: President Obama on Chrysler, GM Bailouts: "We'll Get Our Money Back"

Robert Farago
by Robert Farago

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?

Robert Farago
Robert Farago

More by Robert Farago

Comments
Join the conversation
2 of 15 comments
  • PeteMoran PeteMoran on Jul 30, 2009

    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....

  • U mad scientist U mad scientist on Jul 31, 2009
    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?
  • TCowner We've had a 64.5 Mustang in the family for the past 40 years. It is all original, Rangoon Red coupe with 289 (one of the first instead of the 260), Rally Pac, 4-speed, factory air, every option. Always gets smiles and thumbs ups.
  • ToolGuy This might be a good option for my spouse when it becomes available -- thought about reserving one but the $500 deposit is a little too serious. Oh sorry, that was the Volvo EX30, not the Mustang. Is Volvo part of Ford? Is the Mustang an EV? I'm so confused.
  • Mikey My late wife loved Mustangs ..We alway rented one while travelling . GM blood vetoed me purchasing one . 3 years after retirement bought an 08 rag top, followed by a 15 EB Hard top, In 18 i bought a low low mileage 05 GT rag with a stick.. The car had not been properly stored. That led to rodent issues !! Electrical nightmare. Lots of bucks !! The stick wasn't kind to my aging knees.. The 05 went to a long term dedicated Mustang guy. He loves it .. Today my garage tenant is a sweet 19 Camaro RS rag 6yl Auto. I just might take it out of hibernation this weekend. The Mustang will always hold a place in my heart.. Kudos to Ford for keeping it alive . I refuse to refer to the fake one by that storied name .
  • Ajla On the Mach-E, I still don't like it but my understanding is that it helps allow Ford to continue offering a V8 in the Mustang and F-150. Considering Dodge and Ram jumped off a cliff into 6-cylinder land there's probably some credibility to that story.
  • Ajla If I was Ford I would just troll Stellantis at all times.
Next