President Obama swooped into Detroit on Friday to promote his administration’s auto bailout a year after the carmaker bankruptcies, and boy did he declare victory. Speaking at a Chrysler plant, he criticized the Republicans’ opposition to propping up the beleaguered industry. “If some folks had their way, none of this would be happening,” he said. “Just want to point that out. Right? This plant and your jobs might not exist.”
Looking back, it seems like the auto-bailout was actually the right thing to do, regardless of public perception.
A year later, the auto bailout is an unqualified success. The government used its leverage to force the companies to make the painful changes they should have made years before, and then backed off and let the companies run themselves without any noticeable interference… For the first time since 2004, GM and Chrysler, along with Ford, all reported operating profits in their U.S. businesses last quarter. The domestic auto industry added 55,000 jobs last year, ending a decade-long string of declines. Auto sector exports are up 57 percent so far this year and, thanks largely to new government regulations, the industry is moving quickly to introduce more fuel-efficient vehicles. Most surprising of all, GM and Chrysler have already repaid more than $8 billion in government loans, while GM is preparing for an initial stock offering later this year that would allow the government to recoup most, if not all, of its investment”
And, for my I-told-you-so moment of the day, here is me, in November 2008:
Yes at the end of the day we must bail the auto industry out. Millions of employees are working in this industry and they can not be duped because of their boss’ incompetence. It is not fair to all the workers in Ohio, Indiana and Michigan, who would be put into unemployment by this, further damaging the economy. Letting the car companies go bankrupt would be no help to the workers, and there is a strong possibility that they wouldn’t be able to recover. The auto industry is to big to let fail, and our economy would suffer eternally and would be begin a massive chain effect that we cannot let happen.
….
We need them, and our broken economic system stops us from teaching them a lesson. Regulation is the answer, but for now the big three must be bailed out.
Called it.
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