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Obama Team Scraps Auto Bailout

Posted on Mar 29, 2009
Flickr / richardefreeman

GM’s Detroit headquarters.

The Obama administration auto task force has sent both GM and Chrysler back to the drawing board, turning down requests for additional loans until the companies come up with more realistic restructuring plans. The government will prop up GM for two months while the automaker tries again. Chrysler has 30 days.

Earlier, the administration forced GM chief Rick Wagoner to resign.

Reuters:

The Obama administration autos task force on Monday rejected the turnaround plans of General Motors Corp (GM.N) and Chrysler LLC and warned both could be put through bankruptcy to slash debts.

The announcement by the White House autos panel headed by former investment banker Steve Rattner marked a stunning reversal for management at both automakers and for GM investors and creditors who had bet on a softer line.

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By NJ Limo, September 5, 2010 at 7:15 pm Link to this comment

Well they met the challenge! Or did they? Nearly 18 months later and we have not seen much out of the three. Oh yes we have some last minute releases of eco friendly vehicles, but it is a little late one expects. I cannot see GM, Chryclser and Ford surviving the next generation of cars.

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By MR, March 30, 2009 at 8:28 pm Link to this comment
(Unregistered commenter)

the revolution is coming

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By Wes, March 30, 2009 at 3:43 pm Link to this comment
(Unregistered commenter)

Good for Obama. Finally a man with vision. The high-tech car industry, and all the supporting energy infrastucture will be essential to a sustainable global economy. Obama seems to understand this. It would be refreshing to see other Americans support him in this effort.

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By cyrena, March 30, 2009 at 3:32 pm Link to this comment

By Nancy Detroit, MI, March 30 at 2:23 pm

Thank you Nancy!!!

For 8 long years we’ve been held hostage in the backseat of the car as the drunks (Dick Bush) have driven us to the very edge of the cliff. Obama has the keys now, finally…since nobody was the least bit interested in taking the keys away from the former thugs, and seemed willing enough to remain hostage to the drunks at the wheel. Now Obama has already managed to reverse the direction AWAY from the cliff, so that whomever of us might still be hanging on, (and not already fatally dashed against the rocks of the abyss) might just have a chance at survival.

You also took the words out of my mind…though I’ve voiced them before. The man has done more in turning things around in just 60 days, than any other person could have or would have accomplished. I’m amazed, and continue to support him every single hour of every single day, with the exception of the Afghanistan action. But even with that, I expect him to have that solved in record time as well.
Sometimes I think that Americans have become so totally dumbed down in the past decade or so, that they wouldn’t recognize a 5 pound bar of gold if it was shoved up their asses.

Meantime
By thebeerdoctor, March 30 at 11:43 am #
Purple Girl is correct, the Democratic leadership is no friend of labor.

I didn’t read Purple Girl’s comment, but somehow I don’t think she happens to be talking about the CURRENT democratic leadership. She’s definitely correct about this being the case in the Clinton Administration, who only pretended to be a friend of labor. That said, the Republicans, (leadership and the lowly) have NEVER EVER been a ‘friend to labor”. Regan kicked off the anti-labor campaign, and Bush I continued it. By the time Clinton came along to sign the final death certificate in the form of NAFTA (which Bush I actually developed) it became pretty obvious that THAT part of the democratic leadership was no friend of labor either.

But, it’s a new dawn and a new day, and I think people like you are eventually gonna have to catch up with the 21st Century, and the fact that your complaints against the Democratic party are old and stale, simply because we are no long ‘that’ Democratic party. Slowly but surely we are replacing the hypocritical Blue Dogs with real progressive Democrats. So you can cover your eyes and ears as long as you want, but this change for the better is inevitable. It’s already in the works.

And, you all don’t have to worry about us progressives trying to drag you kicking and screaming into the new Century, (we’re already 8 years late) because in terms of pragmatic solutions, we really don’t want you throwing all of these monkey wrenches into our efforts, and you can’t hold us back.

We’re cooking with gas again. Hot damn!!

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By tropicgirl, March 30, 2009 at 2:29 pm Link to this comment
(Unregistered commenter)

The Village Elder got it right…

Even the firing of Wagoner is to make you think Obama is for the people. Then the auto makers will go bankrupt, and all the UAW contracts will be void.

After that they will get all the bailouts they want.

(The same thing happens over and over with the airline industry).

Then they will all merge again. And so it goes. Just like the banks just did.

I can’t believe that he’s going to screw the very unions that got him elected.  I heard he is not really for card-check anyway. So sad.

This is why the European people are so pissed at him and his beloved corporations. They see it all objectively and are forbidding their leaders to support these crazy financial moves.

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By Sedrick Keener, March 30, 2009 at 12:47 pm Link to this comment
(Unregistered commenter)

I beleve that all this talk about bailout is just another way all these companies use and money off the already beat down economy

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By landroo, March 30, 2009 at 12:39 pm Link to this comment
(Unregistered commenter)

If the automobile industry goes, the American middle class goes.  Obama serves the globalist swine.  He’s not a U.S. patriot.  Time, long past due, for a patriotic party.

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By VillageElder, March 30, 2009 at 11:44 am Link to this comment

So much of the discussion about automakers focuses on the unions I am wondering if the automakers bail out plan isn’t bailing the automakers out of their union contracts.  Such an action would complete that part of the work begun by Ronald Regan.  The repugs and fellow Friedmanites have never meant a union or socio-economic network that they liked.  Free markets, read laissez faire, should have no “distortions” benefiting the workers.

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By Nancy Detroit, MI, March 30, 2009 at 11:23 am Link to this comment
(Unregistered commenter)

Detroit auto executives live in a world of their own. GM has not been a resposible company but a country club over the years. Don’t give them what they want and out comes the propaganda, socialism, Karl Marx.  Mere bullies, acting like spoiled brats.

With Obama, we’ve got someone who can not only lead, but I think he’s going to take this country back from greedy corporate America. He’s going to change he landscape in DC. Obama’s #1 desire is NOT money. 

I’m bothered when I hear people say why doesn’t he do the same with banks.  Everyone wants everything in an instant. Give him some time.  He and other ethical world leaders are digging in and they are going to lick this problem.  There still are troublemakers and people who want us to fail, but I don’t think they’re as smart or as in much control as they think they are.It’s all in the timing and we have to allow Obama to work in his own time.  Actually, I can’t believe how fast he is getting things done. It’s March.  He wasn’t in office until late January.

It’s going to be a very interesting 4 years, and I’m betting four more to follow.  I’m comforted to realize that the Limbaugh’s of the world will only serve the purpose of keeping their party in a minority status.

Thank you Mr. President. We stand behind you.

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By Mike, March 30, 2009 at 10:40 am Link to this comment
(Unregistered commenter)

I think GM should go under.  The bottom line is that they make sh*tty cars and they have poor customer service.  I bought a brand new 2005 pontiac 4 years ago.  It has only 70k miles on it and the transmission went.  I was 4 months out of warranty.  When I called the customer service line and asked for assistance, they would do NOTHING for me.  They had me waiting for an answer for almost a week with no updates.  Then I asked if they would at least give me a loaner car while they serviced my transmission and they wouldn’t even do that for me.  They basically told me I’m screwed.  What kind of quality and customer care is that???  Plus they wanted to charge me $4,000 at the dealership just to do the job.  I went to AAMCO and paid half the price.  They could have done SOMETHING for me… but they are such a bad company and following the “American Way” which is to sell a product that will break more sooner than later so that the customer needs to buy a new product and that gives them more money.  I have a friend who owns a Nissan with 240,000 miles on it and still no major problems.  When was the last time you heard of an American car lasting that long?  The sad thing is that they COULD make a better product, they just choose not to.  Why do most Japanese cars get better gas mileage and last longer?  GM had their chance, but in my opinion, they can go screw.  Thats what they told me, so I’m telling them right back.  In my case, they showed no pride in their product and didnt give a sh*t about the customer.  All those greedy bastards wanted was more money.  I will never buy another GM and everyone I meet who talks about buying one, I will tell them my horror story.

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By tropicgirl, March 30, 2009 at 10:08 am Link to this comment
(Unregistered commenter)

I think this is too little too late.

The time to stop the job losses, the offshoring, outsourcing, etc. has passed us by, and we didn’t take that opportunity. Europe may save their economies by divesting from us, but the US is too wrapped up with crooked financial services corporations. I believe they will fail and rightly so.

The people of the world will not tolerate any more corporate bailouts and if Obama keeps doing it he’s finished both from the right and left. Neither will they tolerate Middle Eastern and African dominionist wars and the likes of Betray-us.

Barry may have started reading the Financial Times in the 80’s but he certainly didn’t understand what he was reading. He must have been in awe of it and Thatcher (and Reagan).

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By Albert Oliver, March 30, 2009 at 9:33 am Link to this comment
(Unregistered commenter)

I keep hearing about the U.A.W ‘s compromise’s , I keep hearing of them getting laid off, I keep hearing it was their wages that helped bring the industry down, but how many are there in upper management and what are their wages? Is this a repeat of the C.E.O’s at AIG or the Banks? I have often heard said of them, ” to many chiefs , not enough Indians”. As far as Wagner goes 24 million last year is ridiculous, and what are the bonus’s in the industry?

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By Jason!!, March 30, 2009 at 8:57 am Link to this comment

Welcome to Government Motors!

We offer two models with many features. Peasant Plan and Pelosi Plan.

Peasant Plan:
- Color Option: Black
- Drive Time: 30 Min max per day (may purchase additional credits by donating to DNC)
- Auto fine system (built in GPS allows automatic issuance of fines for parking, speeding and other infractions)
- Global Warming switch (allows Pelosi plan members to disable you car during rush hour)


Pelosi Plan:
(Must be approved by Pelosi to qualify)
- Color Option: Any
- Drive time: Unlimited
- VIP switch (disable any peasant plan vehicle that gets in your way)
- Free Fuel

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thebeerdoctor's avatar

By thebeerdoctor, March 30, 2009 at 8:43 am Link to this comment

Purple Girl is correct, the Democratic leadership is no friend of labor. Observe how talk of bankruptcy for the auto industry is brought up immediately, while shadow economic entities such as AIG are simply too big to fail. What a crummy bargain. The Obama crowd uses populist rhetoric, all the while assuring that those who deserve help the least, are given more.

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Purple Girl's avatar

By Purple Girl, March 30, 2009 at 6:37 am Link to this comment

Let me guess - they thought that all they had to do was gut more out of the Union and this Dem Admin would be happy. As a MI’er I know who the so called Clintonite dems think and Double speak. They blow smoke up the unions asses, get their endorsement and then do back room deals and take hoards of cash from the Ceo & upper management. Who could possibly be still under the delsuion that Michiganders have only been being screwed by Repugs?We have some covert operatives in Blue who have let our State and our labor force (flag ship of Unionization) go to shit.
I have not doubt in my mind these CEO’s/CFO’s etal figured they could pull the same shit they always have- suck the last cent out of the rank & file while retaining their exorbinant Salaries and Comp packages- Hell it’s been working for 30 yrs.
I’m bummed Gettlefinger has stepped down,but I’m sure he saw the writing on th ewall was goin gto be the same as it has always been- fat cats get fatter, while the real backbone to these Corps get the High hard one.Same Shit different decade.
Unionization didn’t jsut raise up auto workers- it raised up all Workers wages,Standards and bennies to become ‘Typical and customary’. Thus creating and sustaing a middle class, who had enough disposble income to create an economic superpower and have enough left over to contribute to the developement of other countries economies- building a Global economy. This Wealth not only created the upper class’s wealth, but raised the living standards of many around the world. the sheer mass of the middle class afford others sustainablity and luxuries this world had never seen before. thus the Corps aren’t just trying to make labor a cheap commodity, they are ultimatley committing suicide for themselves- no extra cash in our pockets- no shopping for unnecesary products. The labor movement’s higher expectations granted the non laborers at least some type of a floor beneanth US all. Thank a union organizer for safe working conditions,the standard 40hr/5 day work weeks, that your 14 yr old is still in school and not working in a sweat shop, along with your health bennies, Overtime pay, and your retirement packages or Accts.
So go ahead Big 3 top brass- go back to th eunion for some more concessions, while hoarding your own weighty overhead costs- Remove the income from the economy these workers filter into other industries, and watch your customer base dwindle.As a Michigander I know exactly Who provides the Butter for my local economy’s Bread- the line Worker.Thanks for all you have done- for shopping at our shops, eating at our resturants, visiting our salons….Basically keeping the rest putting that bread and butter on our tables every night. God Speed.

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By RdV, March 30, 2009 at 5:44 am Link to this comment

Yet, no problem to bail out the black hole of Wall Street endlessly with no strings attached.
  I suppose demanding conditions, concessions from workers (breaking their contracts)is supposed to suffice as representation instead of Obama being led around by the money boys.
  Don’t look over there…look over here.

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By freelyb, March 29, 2009 at 11:50 pm Link to this comment
(Unregistered commenter)

Glad to hear this. Now, why can’t the administration display equal backbone and clarity in dealing with Wall Street?

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By M. Currey, March 29, 2009 at 10:51 pm Link to this comment
(Unregistered commenter)

If this country is going to start manufacturing items it might as well start with something that is usefull and that would be cars that use less oil and go farther, also might as well be smaller also.

The auto industry has been on the Bush side (oil industry) for way too long.

People must remember that what is put here by nature can be used up. 

And drilling for more oil might be o.k. if so much of it was not wasted.  And then there was the huge oil spill up in Alaska.  And maybe if the ship had a double hull less would have been wasted.

Trouble is writing laws is great, only trouble is it takes years to take effect and in the meantime s**t happens.

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