In hindsight, U.S. investment in auto industry was brilliant
Once again this week the nation saw an example of how right it was for President George W. Bush to launch and President Barack Obama to pursue efforts to save the domestic auto industry in late 2008 and 2009.
Chrysler Group LLC announced that it was repaying its government loans of $7.6 billion less than two years after emerging from an accelerated and modified bankruptcy.
Chrysler today is a dynamic competitor in the automotive market, as is General Motors Co., which has also repaid its loans and last year re-entered the stock market. Chrysler has yet to offer its stock for sale. The U.S. government still holds shares in both companies.
The third of the Detroit-based auto makers, Ford Motor Co., was in a stronger capital position when the recession hit and survived without government loans. But its ability to cope would have been hampered by the turmoil in the supply chain that would have followed a collapse of GM and Chrysler.
All three are registering strong sales, showing profits and working on future domestic and international products — ranging from their traditional trucks and SUVs to new smaller, more efficient and technologically innovative products.
There were those free marketers — aided by a cadre of self-serving senators from states hosting foreign manufacturing plants — who were willing to allow GM and Chrysler to fail spectacularly. Even President Bush said that at another time he would have been tempted to look the other way, but he knew that a seriously wounded economy could not have survived such a trauma.
Hundreds of thousands of jobs in the basic auto industry would have been lost, and job losses among suppliers, and the suppliers to suppliers would have rippled outward into the millions. The ability of the U.S. companies to continue their offshore operations would have been damaged, and the resulting vacuum would have been filled by European and Asian companies.
It is impossible to estimate the long-term implications to the American auto industry, the American economy and American workers and families if the economic Darwinists had gotten their way.
We in Ohio can be especially thankful that it didn’t come to that. Surely Ohio would have been hurt as hard as any state except Michigan.
Instead, President Obama will be visiting a Chrysler plant in Toledo next week, where he will doubtless be greeted by workers happy to have good jobs in a recovering industry.
Meanwhile, General Motors recently announced it will invest $2 billion in 17 facilities in eight states, including Michigan, Ohio, Kentucky and Texas — a demonstration both red and blue states have reason to be thankful for the auto industry bailout. Since mid 2009, GM has added 9,000 U.S. jobs.
For a fraction of what the federal government provided for “too-big-to-fail” financial institutions, Washington saved an industry and kept a recession from turning into a depression. Now the investment is paying visible dividends.