Obama Cites Auto Bailout as Model for Reviving American Manufacturing
(CNSNews.com) – President Barack Obama said in two separate speeches in Colorado Thursday that what he did with the auto industry – a taxpayer bailout followed by bankruptcy and restructuring -- “we can do it in manufacturing across America.”
This comes just a month after president called the auto bailout his theory of betting on American business.
Obama on Thursday did not mention a taxpayer bailout for other sectors of the manufacturing industry, but that is what the federal government did for General Motors and Chrysler when the two auto firms hit a financial crisis in 2008.
The Bush administration agreed in late 2008 to a $13.4-billion bailout of Chrysler and General Motors. The money came out of the $700-billion TARP fund created to bail out the banks. In exchange for the bailout, the government required automakers to produce a long-term business plan by March 31, 2009.
Shortly after Obama became president, on Feb. 17, 2009, the Obama administration provided another $4 billion in taxpayer money to GM.
Obama rejected the automakers' restructuring plans and announced a bankruptcy plan for Chrysler on April 30, 2009.
Then, on June 1, 2009, he announced GM’s bankruptcy – never using that word. He called it a “restructuring.” He also announced that the government would make "a significant additional investment of about $30 billion in GM," giving American taxpayers ownership of about 60 percent of the company, to keep it running while it reorganized.
Obama has used the auto industry bailout as a model in the past. As CNSNews.com previously reported, Obama – in a speech in Poland, Ohio, last month – said, “Now Chrysler is back. And GM is the number one company in the world. And Ford is on the move. That’s my theory, betting on the American worker and American businesses.”
Speaking Thursday in Pueblo, Colo., Obama accused his Republican opponent Mitt Romney of giving up on the auto industry.
But Romney says he would have applied a quicker and less expensive fix to the auto industry.
During a campaign stop in Michigan in June, Romney told a local TV station he believed the best way to help the auto industry "thrive and grow" was through a "managed bankruptcy," not a taxpayer bailout.
"It took the president a little longer to come around to that way of thinking," Romney told WOOD TV8. "He ultimately took the auto industry through bankruptcy. They went through that process. And now, with support they have received from government and the American people, they have come back strong. That's a good thing. I would have done it faster than he did and saved us about $20 billion."
Obama told Coloradans on Thursday, “We’ve got a bunch of examples of the differences, the choice in this election,” Obama said. “When the American auto industry was on the brink of collapse, more than 1 million jobs at stake, Governor Romney said, ‘Let Detroit go bankrupt,’” Obama told the Pueblo audience. “I said I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back and GM is number one again.
“So now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry,” Obama continued. “I don’t want those jobs taking root in places like China. I want them taking root in places like Pueblo.”
About three hours later, Obama delivered a similar speech in Colorado Springs, Colo.
“This difference in vision, it shows up on all sorts of issues. When the American auto industry was on the brink of collapse, 1 million jobs at stake, Mr. Romney said, ‘Let Detroit go bankrupt,’” Obama said. “I said, let’s bet on America’s workers. And we got management and workers to come together, making better cars than ever, and now GM is number one again and the American auto industry has come roaring back.
“So now I want to say, what we did with the auto industry we can do it in manufacturing across America,” Obama said. “Let’s make sure advanced, high-tech manufacturing jobs take root here, not in China. Let’s have them here in Colorado. And that means supporting investment here.”
Romney also has promised a resurgence in American manufacturing, to be accomplished by taking "an entirely new and different direction in energy, in trade, and in labor policies." He has not offered specifics.