"Our auto industry is the foundation for economies all across the Midwest, and ultimately, for the country as a whole."
President Obama defended Federal help for the auto industry in an interview with C-SPAN aired on Saturday morning.
The aid has been under attack in various forms since it was establish by President Bush late last year when the U.S. financial system collapsed from its wild speculative practices, bringing the economy down with it.
As a result, current vehicle sales haven’t been at such low levels for more than four decades, and show no signs of improving this year.
In response to a question from C-SPAN political editor Steve Scully about “Government Motors” the President said, “Well, you know – look we are trying to help an auto industry that is going through a combination of bad decision making over many years and an unprecedented crisis — or at least a crisis we haven’t seen since the 1930′s. And you know the economy is going to bounce back and we want to get out of the business of helping auto companies as quickly as we can. I have got more than enough to do without that…”
General Motors Corporation confirmed late Friday borrowed an additional $4 billion from taxpayers to maintain adequate liquidity as the company undergoes what it calls an “aggressive restructuring.” Total U.S. Treasury funding received by GM to date is now $19.4 billion. The amount is paltry compared to the ongoing bailouts of financial institutions, but all told the bailout is now shaping up to cost taxpayers about $45 billion, and rising.
The President went on to say that both banking and autos are strategic industries that require strategic decisions and intervention from the government because of the ongoing economic crisis.
“Our auto industry is the foundation for economies all across the Midwest, and ultimately, for the country as a whole and had we allowed GM or Chrysler simply to liquidate that would have been a huge anti-stimulus on the economy as a whole, and could have dragged us even deeper into recession or even depression,” President Obama said.
“Ultimately, I think that GM is going to be a strong company and we are going to be pulling out as soon as the economy recovers and they’ve completed their restructuring,” Obama said.
As TDB reported Friday, nearly 40 Senators, including both Republicans and Democrats, lent their names to an amendment to an appropriations bill, sponsored by Kay Bailey Hutchison, a Republican from Texas, that would have blocked federal aid for the two makers if steps weren’t taken to ease the pain facing close to 2,000 dealers GM and Chrysler intend to fire as part of their restructuring plans. The Republican Party claims to help smaller businesses, and dealers are big political contributors. (more…)