January 22, 2016 by Chris Kite
Times were bleak. The US economy was in the dumps. The stock market was continuing to crash with no bottom in site. Americans were not buying cars. The big three auto manufacturers were in serious trouble. GM and Chrysler were bankrupt. Ford was in slightly better shape, but mostly because of fortunate timing in selling off assets and raising cash.
There was tremendous fear that the auto industry would collapse, and with it, hundreds of thousands of jobs not only directly within the big three, but throughout the parts and supply industry. This led to concerns about a collapsing industry and the possible inability of the non US manufacturers losing their suppliers.
President Obama had a vision. It wasn’t popular, but he put together a bailout and restructuring of the auto industry. He forced consolidation. He forced labor and wage cuts. He forced retrenchment.
Today, we can see the success of that plan. The auto industry is once again alive, vibrant, and growing. The big three are profitable. US taxpayers got back almost 90% of the bailout. But in reality, taxpayers got way more than that. Because without the bailout, there would have been even worse layoffs and joblessness. There would have been far lower corporate profit on which taxes were paid.
There are almost 50% more workers employed by the auto industry than we saw at it’s recession low in 2009. That’s 50% more good paying jobs for people that pay taxes, pay rent or mortgages, by cars and other products, and add to a productive economy.
It was a grand vision. It has been immensely successful!