Did Obama Save Detroit?

Assessing the auto bailout one year later

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President Obama swooped into Detroit on Friday to promote his administration's auto bailout a year after the carmaker bankruptcies. 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." In retrospect, did Obama's policies help the Detroit automakers?

  • The Auto Bailout Saved the Industry, writes Steven Pearlstein in The Washington Post: "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"
  • The Jury's Out on Obama's Auto Policies, writes the Detroit News editorial board: "The people here instinctively understand that the vehicles Washington is forcing Detroit to invest its resources in -- teeny, electric-powered sedans -- will not wow the market or produce big profits for Detroit. They get that if Washington maintains its heavy hand in auto manufacturing, the automakers will be on their backs again before long. And they also know how sensitive auto sales are to the bounces of the economy. If Obama's spending addiction, radical environmental intentions and expansion of government's control of the private marketplace lead the country back to economic ruin, the heroic bailouts of General Motors and Chrysler will mean nothing."
  • The President Prevailed, writes Steve Benen in the Washington Monthly: "After Obama intervened to rescue auto manufacturers a year ago, the right insisted it was an example of his purported desire to be a communist dictator. A year later, his efforts look pretty smart, and his detractors' apoplexy looks pretty foolish."
  • Don't Get Cocky, Obama, writes Manny Lopez at the Detroit News: "President Obama did what had to be done to ensure that America's economy didn't spiral into oblivion. But it is neither proof that government intervion works or is worthy. It only proves that he was smart enough to know that GM and Chrysler failing on his watch would be disastrous for hundreds of thousands of families and his future. He ought to temper his self-promotional spin today."
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