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

Robert Farago
by Robert Farago
bailout watch 574 president obama on chrysler gm bailouts we ll get our money

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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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?
  • Dusterdude The "fire them all" is looking a little less unreasonable the longer the union sticks to the totally ridiculous demands ( or maybe the members should fire theit leadership ! )
  • Thehyundaigarage Yes, Canadian market vehicles have had immobilizers mandated by transport Canada since around 2001.In the US market, some key start Toyotas and Nissans still don’t have immobilizers. The US doesn’t mandate immobilizers or daytime running lights, but they mandate TPMS, yet canada mandates both, but couldn’t care less about TPMS. You’d think we’d have universal standards in North America.
  • Alan I think this vehicle is aimed more at the dedicated offroad traveller. It costs around the same a 300 Series, so its quite an investment. It would be a waste to own as a daily driver, unless you want to be seen in a 'wank' vehicle like many Wrangler and Can Hardly Davidson types.The diesel would be the choice for off roading as its quite torquey down low and would return far superior mileage than a petrol vehicle.I would think this is more reliable than the Land Rovers, BMW make good engines.
  • Lorenzo I'll go with Stellantis. Last into the folly, first to bail out. Their European business won't fly with the German market being squeezed on electricity. Anybody can see the loss of Russian natural gas and closing their nuclear plants means high cost electricity. They're now buying electrons from French nuclear plants, as are the British after shutting down their coal industry. As for the American market, the American grid isn't in great shape either, but the US has shale oil and natural gas. Stellantis has profits from ICE Ram trucks and Jeeps, and they won't give that up.
  • Inside Looking Out Chinese will take over EV market and Tesla will become the richest and largest car company in the world. Forget about Japanese.