Thursday, December 8, 2011

A Bailout That Worked

The new issue of Time magazine has an extraordinary piece on the resurrection of the American auto industry.
It was only a few short years ago that the American auto industry was written off and given up for dead.  In the true spirit of capitalism most Republicans and a few Democrats wanted to let the auto giants fall by the wayside.  Survival of the fittest was the cry.  The ramifications of adding 3 million laid off workers to the welfare rolls seemingly lost on the purists.
The Bush and Obama administrations correctly understood the disastrous effect an auto industry collapse would have on an already staggering economy.  They instituted what would turn out to be one of the largest and most successful stimulus plans in our history.  Buoyed by government loans, management and the UAW found common ground for the common good.  The industry rebounded and the country was spared the loss of a pillar of our American culture.   
By June of 2009 the American taxpayers had invested $80.3 billion dollars to save the auto industry and the 3 million jobs which depended on its survival.
On May 24, 2011 Chrysler paid back the last of the outstanding debt plus interest…six years ahead of schedule.
Today Chrysler sales are up 23% and they posted a $5 billion dollar profit. General Motors has realized a 7% increase in sales.  And Ford Motor Company, which did not take any bailout money, is up 13%.  The industry expects to generate 200,000 new jobs over the next several years.
At a time when there is so much negativity about our government and our economy it’s nice to know that government, management and labor can work together to revive an American industry.

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