Obama, Workers Agree: GM and Chrysler Bailout Helps Ford—And the Economy

http://www.inthesetimes.com/working/entry/6291/obama_worers_agree_gm_and_chrysler_bail-out_helps_ford--and_the_us_eco/

Thursday August 5 6:38 pm

By David Moberg

CHICAGO—With his crisp white shirt sleeves rolled up, President Obama this morning stepped to the makeshift podium in Ford Motor Company’s venerable Torrence Avenue assembly plant, just a few miles south of his Chicago home. The crowd of roughly 1,500 included a smattering of politicians against a backdrop of workers who now assemble the Taurus–and who will soon be joined–partly thanks to Obama policies–by 1,200 more helping to assemble a new, 30 percent more efficient Explorer SUV.

Greeting him enthusiastically, they rose to their feet, their outstretched arms clutching digital cameras and cell phones to capture the moment. The president in turn delivered a spirited, patriotic, campaign-style tribute to American workers and rebuke to the “just say no crowd” that was ready to abandon American auto companies.

In his upbeat assessment of his own economic policies, he emphasized the auto industry: all three U.S. companies profitable; 55,000 workers hired in a little over a year; new investment, expansion and in-sourcing of out-sourced jobs; and accelerated plans for new energy-efficient vehicles. Tomorrow his argument that the auto industry assistance had worked to save over a million jobs might have been lost in the anticipated bad news on continuing high unemployment.

Ford, as anyone connected with the company will quickly confirm, did not require bailout money. But it did benefit from Obama policies. First, saving GM and Chrysler also prevented the collapse of parts plants on which Ford (and Toyota, Honda, Nissan and other transplants) depend. It prevented a giant stain to the reputation of US made cars generally. As Obama said,

Now, Ford was in better financial shape and was able to weather the storm without federal assistance. That’s a testament to the hard work you all do and the choices this company made. But I don’t have to tell you, and your CEO will -- has said this publicly -- if your competitors had gone down, they would have taken down a whole bunch of the suppliers you depend on. The brand of American autos would have diminished. That would have had severe consequences for Ford.

Other policies also helped. Cash for clunkers stimulated purchases at a key time (and from an environmental standpoint would still make sense). And every extension of unemployment benefits, mortgage renegotiation, job saved or created or other action to sustain demand, made it possible to sell cars.

FULL story at link.

If GM and Chrysler had both gone under, the spiral effect on other manufacturers would have been devastating. The people that were against the auto bailout never could recognize what the ripple of GM & Chrysler going under would have truly meant in the US.

edited to add: And that's why I was a huge proponent for the auto bailouts.

I'm a frequent critic of the president, but this is one he got right. Not perfect, but he protected the unions to a great degree, he extracted some "pain" from the shareholders and upper management, and he then "got out of the way" and told them to sink or swim. GM may still have troubles in the future, but no one is really going to be able to say that Obama screwed it up.

But looking at the whole picture, Obama did wonders.

tiered workforce, changes in workrules - yeah, win-win for everyone.