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Obama Assertive on Auto Industry



Chrysler's merger with Fiat keeps one of the Big Three afloat. Photo by Jason Reed of Reuters

President Obama's decision to personally announce the news that Chrysler and Fiat have formed a partnership that will save an American automaker is a recognition of just how much stake -- both financially and politically -- he has in the success and survival of the Big Three.

Referring to Chrysler as a company with a "particular claim on our American life," Obama made clear that the company's merger with Fiat would set it on a path to eventual viability -- a good step, he argued, in the comeback of the American auto industry.

Even as he touted the centrality of Chrysler to the American ethos, however, Obama made clear that he opposes the idea of keeping any company in business with taxpayer funds alone. "For too long Chrysler moved too slowly to adapt to the future. We simply cannot keep this company or any company afloat on an endless supply of tax dollars," asserted Obama.

Those twin statements -- the praise for the crucial role Chrysler plays in the domestic economy and the warning to companies who fail to change and adapt -- are indicative of the tight rope Obama must walk in his efforts to revivify the American auto industry.

Bailouts -- of any sort -- are not particularly popular among voters at the moment, shrouded under the dark cloud of the bonuses paid out to AIG executives after that company received billions in government funds.

In the most recent Washington Post/ABC poll, the ONLY area in which more people disapproved of the way Obama was handling a particular issue was the auto industry, where 41 percent approved and 53 percent disapproved.

Asked in that same survey whether they were confident that the government would put in "adequate controls" to limit waste and fraud in the spending of economic stimulus money, 46 percent expressed confidence while 52 percent said they were not confident in that prospect.

Those poll numbers suggest a deep division among the American public about the future of the auto industry.

On one hand, most people in America have a fond image cruising in their first car (usually an American-made one) up and down the main streets (or street in the case of the Fix) of Anytown, U.S.A.

On the other, the idea of throwing more and more government money after companies that refused to heed repeated warnings that they needed to adapt or die isn't exactly the American way.

One other complicating (political) factor: the states most deeply affected by a total collapse of the American auto industry all sit in the Rust Belt, a critical battleground area in each of the last three elections.

Obama's front and center role in this morning's announcement makes clear the political importance that getting right the re-making of the American auto industry holds for the president.

Getting it wrong would likely set off a broader discussion of the right government role (if any) in the private sector -- a debate that could end badly for Obama.

By Chris Cillizza  |  April 30, 2009; 2:31 PM ET
Categories:  White House  
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Comments

thaimex:

It's certainly the easy way out to constantly criticize and blame the 'greed of Wall St" for all our financial problems....and conveniently ignore the greed of people who gleefully signed on the dotted line for $400k homes when they were only making $50k/yr (I know, I know.... they were ALL 'tricked' by greedy lenders....from Wall St). But liberals are quite familiar with taking the paths of least resistance.

Several liberals on this board seem obsessed with talking about the 1930's....yet don't seem to have even a simple grasp of the order of the history of events. Presumably they have been so trained to believe that capitalism led to failure and FDR's New Deal fixed everything, they can't bear to be shown facts that prove otherwise.

So believe what you will, and turn a blind eye to the true record of history, but answer this question: last time a President and his followers piled on Wall St and 'corporate America' for financial failures, and engaged in a daily blame game for where the fault of the crisis lied....where did that get us?

1930-1932

Posted by: dbw1 | May 1, 2009 9:16 AM | Report abuse

Much of the commentary here seems to be repeats of themes that the individual commenters have put forth for oh, the past 18 months. I dread to think that we face repeats of these tirades for four or even eight years.

This is a critical event, perhaps even more for economic than for political reasons. For the past twenty years, the US has dominated world trade on the strength of "services" -- one of the most significant being finance. And the captains of industry who refused to make a deal in the Chrysler matter were stars in that US dominance, people like Perella.

It remains to be seen how this will play out for them, but it appears that one of their own, the Obama car czar, has called their bluff. It would certainly be best for Chrysler, the federal taxpayer, the US economy, and of course Obama, if the holdouts get their comuppance.

But if the holdouts do lose out in the long run, what does that do to American finance? Their insistence that they must be paid is oddly resonant of Paulson's pride in flushing Lehman down the drain.

Posted by: thaimex | May 1, 2009 12:09 AM | Report abuse

Why is JakeD so embarrassed about his party affiliation that he must consistently misrepresent it? Oh, that's right. The American Independent Party ran Alan Keyes for president. Guess I'd want people to think I was "Independent" too.

Then again, it might be that he just enjoys misrepresenting things. A review of his posts would support that hypothesis as well.

Whatever. Let's all just pray that his OCD meds kick in soon.

Posted by: nodebris | April 30, 2009 10:09 PM | Report abuse

So basically another situation where Obama staked his reputation on finding a compromise and utterly failed.

I am beginning to see a pattern here.

Posted by: king_of_zouk | April 30, 2009 9:44 PM | Report abuse

looking forward to the Fiat Jeep. Lets hope someone continues with the Rubicon because it is world class.

Posted by: angriestdogintheworld | April 30, 2009 8:06 PM | Report abuse

"By the way, using liberal math to calculate "jobs created or saved", George Bush still leads with about 160 million jobs "created or saved" to Obama's what, 150,000, give or take?"

Actually, Obama created about 620 million jobs in his first 100 days. Bush lost about 3 billion.

Posted by: DDAWD | April 30, 2009 7:52 PM | Report abuse

"I know real history is boring to liberals, who tend to think they are smarter"

Well, people like you can't help but cause a little swelling in the ego. At the very least, I can say with certainty that I'm not the dumbest person on the planet.

Why lie about those historical "facts"? They can be looked up so easily. Go look at any chart of unemployment in the 1930s. The New Deal started taking huge chunks out of unemployment.

Posted by: DDAWD | April 30, 2009 7:34 PM | Report abuse

By the way, using liberal math to calculate "jobs created or saved", George Bush still leads with about 160 million jobs "created or saved" to Obama's what, 150,000, give or take?

Posted by: dbw1 | April 30, 2009 7:32 PM | Report abuse

mibrooks27:

There’s little I enjoy more than helping a liberal learn history. It’s not your fault, you’ve just been taught out of these revisionist textbooks that conveniently spin facts to suit the purpose of the liberal writers.

The Smoot-Hawley Act went into effect in 1930, when unemployment was around 8%-9%. Over the next few years, unemployment skyrocketed to over 25%....AFTER the tariffs were implemented, exports tanked, and thousands of American businesses were forced to layoff workers.

Oh, and the stock market? The market was only down about 35% compared to the peak before the ‘crash’ of 1929 when Hoover (although Republican, could hardly be accused of looking anything like a conservative) begrudgingly gave in to the thousands of new Smoot-Hawley tariffs intended to ‘preserve’ American businesses. The market would go on to drop another -72% (total 90% off of 1929 peak) in the 2-3 year period following the implementation of all those ‘business preserving’ policies.

I know real history is boring to liberals, who tend to think they are smarter now and could never repeat the lessons of the past. But as to your own advice, I would encourage you to follow it....if you want to read a history book about the Depression, pull one off the shelf that was printed before 1980.

Posted by: dbw1 | April 30, 2009 7:23 PM | Report abuse

dbw1 _ if you spend any tome reading this forum you will find that I am even harder on Democrats than I m on Republicans. Poverty exists because of a complex set of social ills. Among them are racism and the lack of access to basic services by all people. If we had universal medical care, a universal retirement system, and work *requirements* like Sweden, along with laws that punish companies that outsource jobs, we could easily provide a decent standard of living for everyone in this country. People with new ideas or some special talent could still get filthy rich, but the poor wouldn't be starving, no one would be living in homeless camps and no company would be permitted to defraud people without the offices of that company ending up in prison PDQ. Sweden went through the same economic and social disasters we are currently undergoing and learned from it.

Posted by: mibrooks27 | April 30, 2009 7:04 PM | Report abuse

PoliticalCommentator:
"Nobody can honestly claim that Bush was anything but a brain-damaged alcoholic who couldn't run a radio shack."

Could you please list here for all the dunderhead Republicans all the businesses Obama ran before entering politics? Since you are obviously comfortable with his expertise, I'm just interested in learning where he sharpened his business acumen.

Posted by: dbw1 | April 30, 2009 6:59 PM | Report abuse

dbw1 - Historical nonsense. By 1932 the GDP had fallen by 85%. Subsequnet to the passage of Smoot-Hawley, that set of protectionist measures you refer to, unemployed fell rapidly from > 25% to 12%. GDP grew by more than 50%, even in the worst year it grew by 3.5%. Subsequent to the abandonment of SH, when we got stuck with some conservatives in charge of Congress, we fell into another DEPRESSION. That was in 1937. Go read it! It's part of the actual history of the 1930's. Oh, and might I just mention that that second mini-depression happened when we were ramping up defense industries preparatory to WWII and as a part of Lend_Lease. One of the problems with you conservatives, most of you haven't got any idea at all of what you're talking about and you seem to expect the rest of us to be as ignorant as you are. Before inflicting your opinions here, might I suggest you do some basic reading of history.

Posted by: mibrooks27 | April 30, 2009 6:56 PM | Report abuse

mibrooks27:

If one of your goals is to 'get rid of poverty', how do you suggest we accomplish that in the U.S.?

I mean, the biggest pockets of poverty in our country are in the major cities, and every single one has been run by Democrats for decades.

Wait, there is one small exception I just remembered. New York City has managed to cut unemployment and increase their standard of living substantially in the past 15 years. Coincidence that NYC is the only major American city that has been run by evil Rebublicans the last 15 years?

Posted by: dbw1 | April 30, 2009 6:51 PM | Report abuse

Allow me to play the part of a prophet for a moment....

- within the next 6 months liberals will finally achieve their 50 year dream of taking control of the American automakers.
- Liberals set about to 'fix' all the problems the last couple centuries of capitalism brought us (like planet-leading innovation, prosperity, and growth).
- Step 1 is implementation of all their grande earth-saving ideas, starting by scrapping any car models that can't achieve 100 mpg.
- Within 2 years the only models on GM/Ford/Chrysler dealer lots are pint-sized, powerless 4-wheel mopeds.
- Sales of cars from foreign automakers surge as most American's don't want these crappy small fuel-efficient cars.
- The liberals set out to 'fix' the new problem they created (the problem being new American cars gathering dust on dealer lots while the foreign automakers capture 90% of the U.S. market).
- In liberal-land logic, there's nothing new taxes can't fix so they immediately implement 300% tariffs on all non-GM/Ford/Chrysler automobiles. That's right, we'll tax the foreign makers out of the American market, bringing ever-lasting prosperity to the American auto companies.
- The Law of Unintended Consequences (which tends to always catch liberals by surprise) kicks in, and trade wars are sparked. All other non-automotive U.S. businesses are tariffed out of their foreign markets.
- Millions upon millions of jobs are lost....but not UAW jobs, since those will continue to be funded by the American taxpayer for decades to come.

It's not so much prophetic as it is remembering what happened in the 1930's, the last time liberals set about to try to use tax and tariff policy to 'protect' American workers, and force American consumers to buy products they didn't want.

Posted by: dbw1 | April 30, 2009 6:45 PM | Report abuse

Oh, and JakeD, I'm a "gun nut", okay? More households in Sweden have firearms than the U.S. Handguns, too. (Not many semi-auto's though. Cultural thing where they think only gang bangers own them... Most Swede's own revolvers and a S&W .357 magnum is the most popular.) Main difference between here and there, they teahc firearm safety in the schools. They got rod of poverty. And people don't shoot each other. They are avid hunter and target shooters, though. Sweden, that "socialist nightmare" is more like an American Jeffersonian dream. I wished we would emulate them. We will, sooner or later, if we are to survive.

Posted by: mibrooks27 | April 30, 2009 6:39 PM | Report abuse

JakeD - Having lived in Sweden, where everyone has medical care, good medical care with no waiting list (like they have with "public-private" disasters like they have in Canada and the U.K.) I would be delighted if Obama grew government. So would you, believe it or not. Imagine, prescription drugs that are dirt cheap, instead of inflated, health care that you can't loose if your employer dumps you, and senior years where you have access to care, even if you end up with Alzheimer's, rather then being inflicted upon some relative. Likewise, an actual retirement plan that covers everyone! If people here got a good and honest look at Sweden, we would be a "socialist" country so fast your head would spin. And, you want to know what would be interesting about that? People like you would be delighted with the system and would fight like mad to keep it!

Posted by: mibrooks27 | April 30, 2009 6:31 PM | Report abuse

house passed it only

The measure would prohibit so-called double-cycle billing and retroactive rate hikes and would prevent companies from giving credit cards to anyone under 18.

If they become law, the new measures won't take effect for a year, except for a requirement that customers get 45 days' notice before their interest rates are increased. That would take effect in 90 days.

Similar legislation is before the Senate, where its prospects appear promising.

Posted by: TheBabeNemo | April 30, 2009 5:42 PM | Report abuse

we need Lee Iacocca.....

Posted by: TheBabeNemo | April 30, 2009 5:31 PM | Report abuse


mibrooks:
credit card bill passed today..
i am about to read it...

Posted by: TheBabeNemo | April 30, 2009 5:28 PM | Report abuse

well, no wonder President Obama and Berscolini were giving thumbs up in the greatest picture every taken....

Posted by: TheBabeNemo | April 30, 2009 5:24 PM | Report abuse

Posted by: JakeD | April 30, 2009 5:05 PM | Report abuse

The question remains: is Obama growing government or not?

Posted by: JakeD | April 30, 2009 4:50 PM | Report abuse

Back on topic:

QUESTION: And could you shape the products and services that are on offer?

MR. OBAMA: I don't think that we should micro-manage, but I think that, um, like any investor, the American taxpayer has the right to scrutinize what's being proposed and, um, make sure that their money is not just being thrown down the drain. And so, um, we've got to strike a balance. I don't want to be -- I'm not an auto engineer. I don't know how to create a -- affordable, well-designed, plug-in hybrid, but I know that if the Japanese can design a -- affordable, well-designed hybrid then, doggone it, the American people should be able to do the same.

So my job is to ask the auto industry: Why is it you guys can't do this? And in some cases they're starting to do it, but, um, they've got these legacy costs. You know, there are some terrific U.S. cars being made, both by Chrysler and GM. Question is, you know, give me a plan so that you're building off your strengths and, um, you're projecting out to where that market's going to be.

I actually think if -- if you look at the trends, um, that those auto companies that emerge from this crisis, when you start seeing the pent-up demand for autos coming back, um, they're going to be in a position to really do well, globally, not just here in the United States. So I just want to help them get there.

But I want to disabuse people of this notion that somehow we enjoy, you know, meddling in the private sector. If -- if you could tell me right now that when I walked into this office, that the banks were humming; the auto -- autos were selling; and that all you had to worry about was Iraq, Afghanistan, North Korea, getting health care passed, um, figuring out how to deal with energy independence, deal with Iran and a pandemic flu -- (laughter) -- I would take that deal. (Laughter.)

And -- and -- and that's why I'm always amused when I hear these, you know, criticisms of "Oh, you know, Obama wants to grow government."

Posted by: JakeD | April 30, 2009 4:48 PM | Report abuse

Suicide is hardly moral (or legal here in my State at least).

Posted by: JakeD | April 30, 2009 4:41 PM | Report abuse

JakeD --

Then you better get going.

You haven't a moment to spare.

Go stand in front of the nearest train.

You'll be doing God's work.

Posted by: PoliticalCommentator | April 30, 2009 4:33 PM | Report abuse

I'm not going anywhere until the Good Lord takes me home.

Posted by: JakeD | April 30, 2009 4:31 PM | Report abuse

JakeD --

You add nothing to these conversations; if you were to disappear forever you would be making the greatest contribution you possibly could.

Posted by: PoliticalCommentator | April 30, 2009 4:24 PM | Report abuse

PoliticalCommentator:

For starters, YOU are the one who has posted on this thread more than I have. So much for your claim: "Its [sic] clear you like the sound of your own voice. We get that." As I have stated, I am a registered Independent so I couldn't care less if I "harm[ed], rather than help[ed]" the GOP, especially RINO pro-choicers. While I am not a Republican, I will not support Obama's out-of-control spending and de facto nationalization of American industries.

Shall I go on?

Posted by: JakeD | April 30, 2009 4:10 PM | Report abuse

I'll bet the new Presidential Limo will have a '300' Grille...

Posted by: newbeeboy | April 30, 2009 4:07 PM | Report abuse

We hate the Republican Party because its polices kill Americans.

We hate the Republican Party because it is trying to block America's attempt to join the first world in providing guarenteed health care to all Americans.

Its the "Life" part of "Life, Liberty, and the Pursuit of happiness"

We hate Republicans like we hate NAMBLA.

Its alright to hate things that are bad, wrong, or downright evil.

The Republican Party has mutated into a giant Cancer of greed, hatred, racism and death.

It worthy of hating and fighting.

"Tiny Tim" is dying of Cancer and can't fight for himself.

He needs health care.

His brother died in Iraq.

His father and mother are out of work and they just lost their house.

That is the "anti-utopia" of Bush/Cheney and the Republican Party.

Through sheer luck or a direct act by God himself we've got a brilliant, wise, focused, organized, motivated and most suprisingly good and kind-hearted President.

President Obama needs all of our support to turn America back into America by fixing what the Bush/Cheney and the Republicans broke.

Republicans are doing everything they can to obstruct his efforts and the will of the American People.

We hate that most of all.

Because we love America.

Reublicans only love themselves, money, and power over others.

Americans hate that too.


Posted by: PoliticalCommentator | April 30, 2009 4:06 PM | Report abuse

The politics of this event seem far from clear. Was Obama trying to sell the idea that Chrysler has a future? Or was he trying to cover the reality of allowing Chrysler to go into bankruptcy? It is also fairly uncertain how his attempt to demonize the senior debt holders will play out. These debt holders have no responsiblity for Chrysler's problems. They made a market in troubled assets on the expectation that the law would be followed and senior debt would get the best treatment in the event of a Chrysler bankruptcy. If there is an argument why they should be expected to make a disproportionate contribution to Chrysler's future, Obama certainly failed to make it.

Posted by: dnjake | April 30, 2009 3:58 PM | Report abuse

To note that a prior (one-term) President was more popular than Obama at this point into things -- and therefore, prove the maxum: "There, but for the grace of God, goes he" is a "breathtakingly stupid response" worthy of such hate and venom?

Perhaps you should look at yourself in the mirror.

Posted by: JakeD | April 30, 2009 3:53 PM | Report abuse

JakeD --

That's a breathtakingly stupid response.

You probabl don't realise it, but you harm, rather than help, the Republican Party, the Conservative Movement, and the causes you purport to support.

Its clear you like the sound of your own voice.

We get that.

The question you should be asking yourself is "what you are trying to achieve?"

You have no crediblity, because you're model of reality is completely out of wack with what people can see with their own eyes, and your values are vile and represent the worst of humanity.

Your are ignorant, greedy, racist, xenophoboic, and have absolutely no compassion for your follow men, women, and children.

You believe in billions for the F22 but not a penny for a child dying of Cancer.

You believe in assault rifles and "cop killer" bullets.

You idiolize war, violence and death.

Your only positive postion is being anti-abortion, but you are hypocrites, and lose all moral credibilty or moral standing by being anti contraception, by not giving a doime to kids after they're born, and by supporting the death penalty.

You don't shower or bathe, and have raging herpes and fleas, at least in a metaphorical sense.

You represent everything we hope to God our kids don't grow up to be.

I'd hate to have your Karma.


Posted by: PoliticalCommentator | April 30, 2009 3:44 PM | Report abuse

PoliticalCommentator:

Jimmy Carter had a higher approval rating 100 days in too.

Posted by: JakeD | April 30, 2009 3:33 PM | Report abuse

there ... their

Posted by: newbeeboy | April 30, 2009 3:30 PM | Report abuse

The UAW just got there election investment back.. and more..

Posted by: newbeeboy | April 30, 2009 3:30 PM | Report abuse

The man's a Joe DiMaggio of Politics.
Glen Gould. Paul McCartney, John Lennon. Neil Armstrong, FDR, JFK. Fred Astair.

Barack Obama is the ultimate example of natural talent combined with iron self-discipline and a fierce commitment to doing a grest job ss Preseident and a great job for America.

Republicans, wake up!

You've moved way beyond self-parody and now just soil yourselves in public.

You csn contribute something to the dialog and to the process, but not by tearing down someone who's so brilliant and talented he makes it look easy.

Performance is measured by results.

Join the rest of America in doing everything we can to help him repair what Bush/Cheney and the Repubican Party broke.

You can change.

Just like America.

Its good for you.

You can't grow and adapt without changing.

You can't survive without growing and adapting.

Creatures that don't change, grow, and adapt to changing conditions go extinct.

That's what's happening to today's Republican Party and Conservative Movement.

We're seeing Darwin at work.

Thank God for that.

Posted by: PoliticalCommentator | April 30, 2009 3:26 PM | Report abuse

"And, of course, none of the problems with the American auto industry sprang from the overpaid, underworked members of the UAW. Naw, it was all the evil managment types who made the wrong decisions.

Give us a break."

Is that also a part of the platform of the national council? To blame all the problems on the working class? Fun stuff.

Posted by: DDAWD | April 30, 2009 3:24 PM | Report abuse

Of course he wants to run everything. That's why he ran for President. With practically no experience, except "community organizer" he got into politics and now he's America's problem. And, of course, none of the problems with the American auto industry sprang from the overpaid, underworked members of the UAW. Naw, it was all the evil managment types who made the wrong decisions.

Give us a break.

Posted by: Penazoid | April 30, 2009 3:14 PM | Report abuse

For the record, I am registered Independent, but I can honestly claim that Bush was something better than a brain-damaged alcoholic who couldn't run a Radio Shack ©

He did sign the PBA ban into law, at least.

Posted by: JakeD | April 30, 2009 3:12 PM | Report abuse

President Obama is a gift from God, and reminds us all of just how important intelligence is in a leader.

Nobody can honestly claim that Bush was anything but a brain-damaged alcoholic who couldn't run a radio shack.

Republicans blew it "big time"

They could have been the party of business and results.

Instead they became the party of idiots and nut-jobs.

The Republicans who post here do a great job keeping the rest of us fired up and hating them.

Great job guys.

We can't wait to crush you.

Posted by: PoliticalCommentator | April 30, 2009 3:02 PM | Report abuse

"People want so hard to believe. I want so hard to believe. The POTUS says he doesn’t want to run companies yet the government is. The POTUS says he doesn’t want expansive government yet spending and debt is beyond comprehension and the government expands. I want so hard to believe ..."

Posted by: leapin | April 30, 2009 2:43 PM

Great minds think alike.

Posted by: JakeD | April 30, 2009 2:54 PM | Report abuse

Either he doesn't want to run the auto industry, banks, insurance, healthcare, credit card companies, etc., or he does.

Posted by: JakeD | April 30, 2009 2:53 PM | Report abuse

mibrooks27:

He can't have it both ways though.

Posted by: JakeD | April 30, 2009 2:38 PM | Report abuse

Candidate Obama, the populist, finally makes an appearance. Thank you! I am especially gladdened to see that the Oppenheimer Fund gets t in the shorts. Those vermin a a "global fund", one of the primary swine behind job outsourcing. I hope to God it drives them completely out of business.

Now, if Obama takes on the credit card companies and these "loan funds that run the various payday-title-student loan scam and does something similar with them, I might just start to believe again.

Posted by: mibrooks27 | April 30, 2009 2:37 PM | Report abuse

"Assertive" huh? Isn't this the THIRD CEO he's fired so far? And just last night, in response to this very question, he wanted to disabuse people of the notion he "wants to run" anything.

Posted by: JakeD | April 30, 2009 2:33 PM | Report abuse

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