Reuters - "Obama auto plan stopped global auto collapse: exec"

[TomCADem]

I know Republicans were arguing that President Obama should have simply let GM and Chrystler get liquidated to satisfy bond holders, rather than being reorganized, but here is a different perspective.

BTW How bad would have unemployment been if the Obama administration let GM and Chrystler get liquidated?

http://www.reuters.com/article/Restructuring09/idUSTRE5906LM20091001

###

NEW YORK (Reuters) - The global auto industry would have collapsed if the U.S. government had not provided taxpayer-backed financing for automakers General Motors and Chrysler, according to the chief executive officer of Motors Liquidation Co (MTLQQ.PK: Quote, Profile, Research, Stock Buzz).

"If GM had gone down, the world's supply base would have gone down," said Al Koch, speaking at the Reuters Restructuring Summit in New York. Koch was GM's chief restructuring officer during the bankruptcy and now heads the GM unit that is being liquidated.

"There wouldn't have been a manufacturer that could have completed a car, because somewhere on the car there would be a part that needs to come from a supplier that had failed," he said.

* * *

The companies emerged from bankruptcy through a sale process that transferred their best assets to new operating companies funded by the U.S. government while leaving liabilities, excess equipment and some shuttered industrial sites in companies set up as liquidators.

"I do believe that if President Obama hadn't done what he did for GM and Chrysler, that the world's auto industry would have collapsed and I believe we would have been in the middle of a worldwide depression," Koch said.

###

[bluestateguy]

1. Obama saved the American auto industry.

It's really that simple.

[bbinacan]

2. I just bought a 2010 Jeep

Wrangler Unlimited Rubicon. :woohoo:

[TwilightGardener]

16. Oooh, that's a nice one. We are on our third Jeepster (a Patriot--not as much

fun as a Wrangler, but more practical for a family). Have fun!

[Captain Hilts]

3. Yes, I absolutely agree with this. Kudos to him. nt

[Kdillard]

4. Yep I love how Obama gets blamed for saving American companies and

jobs.

[Enthusiast]

17. He gets blamed for "taking them over"

you hear it every day out of the mouth of some knuckle dragger. He commie-fied the auto industry. Of course this claim is nonsense.

[Clio the Leo]

5. yeppers NT

[zonkers]

6. His propping up an industry only delays the depression. He should have manned up and let it fold.

Worldwide depression or not, Detroit's attitude sucks. on edit.... Okay, I may be talking out of my ass as I choose not to grasp the true horrors of a worldwide depression, it just bugs me that they got bailed out.. with all their arrogance and all.

[SemiCharmedQuark]

7. You want a depression?

[zonkers]

8. No. Maybe. I DONT KNOW. I just hate that "gun" being put to our head everytime we write a

there is a crisis and we write another billion dollar check to entities that represent the same old business models. Why should we ever think things will ever change as long as this is the MO?

[SpartanDem]

9. Yeah, because that really would've helped our economy

[krispos42]

10. Under current trade conditions, our manufacturing industry collapse is inevitable

We refuse to make other countries compete in the US on our terms; instead we make us compete on their terms. We don't protect our domestic automotive industry with tariffs while our competitors do it with their domestic industries.

If we want to really save the Big Three we'd repeal GATT and ramp up the tariffs over the next decade.

[pampango]

15. What are the tariffs that our competitors use to protect their domestic industries?

If our competitors belong to the WTO, their tariffs are either zero or extremely low. From every source I can find, in the auto industry Japan and the EU have no tariffs on auto imports from us. If you have different information, I'm always interested in learning something new. :)

[Enthusiast]

19. Our domestic cars are commonly

twice as high priced in the Japanese market than here. Same with motorcycles. I'm not much on doing searches on the internet but you can find the information. I'm not sure about Europe but Asia puts a huge tariff on our manufactured goods. But they might not call it a tariff. Japan, for instance, individually certifies every U.S. car for emissions to boost the price. They have all sorts of non-tariff-tariffs.

[krispos42]

24. I believe they use the value-added tax to get around the WTO.

We don't have that.


At least that's my understanding of how it work as Thom Hartmann explains it.

[TomCADem]

26. Our Oversized Health Care Costs Are A Self-Imposed Tariff

Until real health care reform is passed, domestic manufacturing industries will be at a serious disadvantage.

[HamdenRice]

11. "Okay, I may be talking out of my ass

as I choose not to grasp the true horrors of a worldwide depression"

Yes, you are talking out of your ass.

And management of the automakers is now supervised by a former AFL-CIO union official with investment banking experience in creating employee owned companies.

[Dawgs]

12. "I choose not to grasp the true horrors of a worldwide depression"

WTF!!

Has this place gone nuts?

[Occam Bandage]

13. "I choose not to grasp the true horrors of a worldwide depression"

The President does not have that luxury.

[Enthusiast]

18. Yup, right out your ass.

This is a major industry, it used to be the largest. Much of the perceived arrogance is generated those that have an interest in destroying organized labor. We abandon heavy industry at our peril.

[phleshdef]

20. Wow, wouldn't it be great to see all those working class families get screwed over all at once!

Just think how magnificent it would have been for them all to lose their jobs and their health benefits and their pensions. Their kids would starve, they would lose their homes. That would have been awesome!

[ecstatic]

21. "manned up," eh?

I can tell you put a lot of thought into your argument. :eyes:

[TomCADem]

22. "Limbaugh: GM and Obama Must Fail" - RW Urged Boycott of GM and Chrystler

Well, many folks on the right wing share your anger at efforts to save the domestic auto industry:

http://www.huffingtonpost.com/steve-parker/limbaugh-gm-and-obama-mus_b_213557.html

###

A pair of right-wing radio hosts says there's only one choice for conservatives angry about government involvement in the auto industry: Boycott GM.

"Nobody wants to support an Obama company," Rush Limbaugh told his audience Friday, citing a poll showing that 17 percent of Americans backed a boycott of GM.

"Every dollar spent with GM is a dollar spent against free enterprise," conservative talker Hugh Hewitt wrote online last week.

Conservatives in Congress and elsewhere have criticized the federally sponsored restructuring plan GM will seek to execute in bankruptcy court.

The plan would give the federal government a 60 percent ownership stake in the company; lawmakers such as Sen. Richard Shelby, R-Ala., have labeled that socialism.

The popular, controversial Limbaugh didn't outright call for a boycott, but said he understood why people would want to avoid GM vehicles. "They don't want to patronize Obama. They don't want to do anything to make Obama's policies work."

###

[vaberella]

14. Just realize that Obama just can't win on ANYTHING.

I can tell you now that many on DU felt that Obama did not do enough. He just let the workers get raped by big business. Then you have the faction on here who support the Repub claim to let it fold...but some of them are teabagger supporters too.

[joeycola]

23. and last week he stopped cold a second cold war. The

man indeed can walk on water.



:sarcasm:

[SpartanDem]

30. I guess the truth hurts

[blue_onyx]

25. It wasn't just Republicans

"I know Republicans were arguing that President Obama should have simply let GM and Chrystler get liquidated."

Not only Republicans but many, many people on DU were gleeful over the possibility of GM and Chrysler liquidating.

[drm604]

27. Of course.

This was obvious to anyone who was paying attention and being objective.

[harkadog]

28. I would rather see an analysis by someone who does not work

directly for Obama. There might be a little bias there don't you think?

[boomerbust]

29. Just imagine

The Corvette or Mustang made by a Chinese company. He had no choice.