George W. Bush – Republican – started the program that we now call the “auto bailout.” The program is called TARP. It requires the auto companies to repay the loans.
Now this is news to many. Those who are involved in right wing politics LOVE to make this some sort of “socialist” plot by the current President, Obama. When one obtains all one’s news from a channel owned by Rupert Murdoch, it’s obvious one will not be well informed.
You see it was George Bush who started the so-called bailout. It was a good move on his part. The bail out was actually a loan. And while the far right doesn’t want you to believe this, the loans have either been paid back or are well on their way to being paid back. These same people don’t want you to believe that President Obama is an American citizen so if you’re on that side of this argument – please stop reading and go away. I can’t deal with that kind of crazy here.
The loans saved an industry and millions of jobs. That is just a fact. Some people – like Presidential candidate Mitt Romney said we should have let these companies and this industry fail. I disagree and history has proven those of us that do to be right.
Fast forward to today. The program which George Bush created and which President Obama made stronger saved more millions of jobs and an industry. And while the haters will regularly cite the fact that Ford didn’t take any “bailout” money, it’s not true that they didn’t want it or try. It’s also true that had GM and Chrysler gone down, so would have Ford. More on that in a minute.
When people, particularly republicans, talk about Ford, they puff out their chest and proudly proclaim that Ford didn’t take any bailout money. Did you know they tried?
In December 2008, GM, Chrysler AND Ford asked the government for a $34 billion bailout to avoid bankruptcy. Sorry Ford fans but get ready – here comes some fact…
Ford requested a $9 billion line-of-credit from the government, and a $5 billion loan from the Energy Department. Ford pledged to accelerate development of both hybrid and battery-powered vehicles, retool plants to increase production of smaller cars, close dealerships, and sell Volvo.
In the end, Ford didn’t like the terms and the government thought Ford was simply angling for position and between the two positions Ford ended up not taking any money. But they still benefitted greatly from the TARP program.
The supply chain that serves GM and Chrysler also serves Ford. Thousands of businesses employing hundreds of thousands of people would have gone OUT of business over night. Ford had no second source on many of the goods and services these down-chain suppliers offer and it would have been bankrupt in months if not weeks had the TARP money not been delivered.
From the Wall Street Journal:
“Still the company needed the Bush Administration to rescue GM and Chrysler because of fears that a failure of one or both of those companies could imperil their shared base of auto-part suppliers.”
From Ford chief executive Alan Mulally:
“The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy.”
Everyone is entitled to their own opinion – but not their own facts. The facts show that TARP was a republican idea. President Obama expanded on it. Millions of jobs were saved, the loans have been paid back or are being paid back. The government doesn’t “run” the auto business as some people would have you believe. We have manufacturing capacity in this country that is growing. The Big Three are investing in new plants. Car quality is up and GM – on the brink of bankruptcy just three years ago, is now the number one selling car maker in the world.
The rest as they say is history.