Obama: Auto Bailout ‘Necessary’
EmailABC News’ Sunlen Miller Reports:
In his fifth Chicago press conference in as many days, President-elect Obama addressed the auto bailout by the White House this morning in his opening remarks, calling the move "necessary" to avoid devastating consequences to the economy.
"With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together, including labor, dealers, creditors and suppliers, to make the hard choices necessary to achieve long-term viability," Obama said. "The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely necessary to save this critical industry and the millions of American jobs that depend on it, while also creating the fuel efficient cars of tomorrow."
Obama was if he has plans to change the terms of the automakers’ loans when he takes office – as groups such as the United Auto Workers are already upset over some of the provisions that apply to workers.
Obama started to note that "inch by inch” progress that had been made to protect auto workers since the initial proposals from the auto-workers asked for just a blank check.
Obama then was quick to confess that he has not seen the details of the auto bailout yet this morning, and would not comment about his plans for changing it.
“Since the White House just made the announcement this morning, I have not had an opportunity, nor has my economic team, to look at all the details of the plan. So I wouldn’t want to comment about what changes I would want to make before I’ve even seen what’s already on the table.”
Obama warned the Big Three they are going to have to take some "painful steps" here on out.
"I do want to emphasize to the Big Three auto makers and their executives that the American people’s patience is running out and that they should seize on this opportunity over the next several weeks and months to come up with a plan that is sustainable. And that means that they’re going to have to make some hard choices."
Obama said his intention is to have his economic team work with auto management and the UAW to protect jobs in the long-term.
"I just want to make sure that when we see a final restructuring package, that it’s not just workers who are bearing the brunt of that restructuring, that they’re not the ones who are taking all the hits and others who in the past have enjoyed a lot more of the benefits of the auto industry somehow aren’t being affected. I think all shareholders are going to have to be — play a part in this process."
Obama also said a ‘bold’ economic recovery plan was needed, but declined to give an estimate of how much it would be.
-Sunlen Miller
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“I think all shareholders are going to have to be — play a part in this process.”
Uh yeah, what exactly was he going to say here before he caught himself? ‘Bent over’?
This guy is clueless- his most hated group- shareholders- are us. Everyone who has a 401K with mutual funds probably has auto stocks and financials.
This echos his initial statement on AIG when he thought it was all about people’s insurance and he blamed “the shareholders”. He really doesnt get the economy… never having had an actual job.
And for all these many paragraphs of him rambling on and on, he really doesnt say anything about the topic. He is favor of the companies surviving- thanks for that. your leadership is appreciated.
I can see why he bravely resigned from the Senate immediately so he wouldnt be forced to vote on anything. As usual he has had “no contact”.
Posted by: BertieW | December 19, 2008, 4:47 pm 4:47 pm
Weren’t there substantial tax breaks several years back, not only for Hummers but for any vehicle that met a certain weight, like some SUV’s? It wasn’t a problem with just the manufacturers for not keeping the volatility of gas prices in mind with their vehicles, but a consumer and governmental liability too.
Posted by: Kat | December 19, 2008, 4:59 pm 4:59 pm
That’s not all…Here is more to brighten your day!
Congress feels it is doing such a great job that they will get a pay raise in 2009, while many folks go without homes, jobs and food…they should refuse the pay raise or send it to local food banks or somewhere that hurting people will get help.
I urge everyone to call your state representatives and protest this disgusting pay raise.
And if you own a credit card and found that interest rates are going up because credit cards are trying to recoop losses. The Fed Reserve has put a stop to raising interest rates on old balances and a 45 days notice must be given anytime your rate goes up…But, here is the kicker…IT DOES NOT GO IN TO EFFECT UNTIL SUMMER OF 2010!
Chris Dodd has a bill that will help reform credit card rules, but it is not going anywhere, yet he has received over $4 million from those who are opposing the bill..The credit card lobbiest! Please, if you live in Connecticut, let Dodd know how you feel and if not, then let your state rep know. (I have perfect credit and my rate went from 9% to 34.9% and if it has not yet happened to your…stay tuned).
This is OUTRAGEOUS!
Posted by: outraged | December 19, 2008, 5:16 pm 5:16 pm
“Weren’t there substantial tax breaks several years back, not only for Hummers but for any vehicle that met a certain weight, like some SUV’s”
6800 pounds was the weight limit and the vehicle had to be used primarily for work.
The Hummer was once the only vehicle to clear that that wasn’t a serious utility vehicle.
But other models from American car mfrs soon joined once the tax break became a selling point.
Posted by: Ryan C | December 19, 2008, 5:18 pm 5:18 pm
May-be I am missing something, but why aren’t the Senators and State Representatives from Michigan and Ohio being called on the carpet for being asleep at the wheel?
I would think when you represent a state with such an impactful industry to the country, you would be putting a bit more pressure on the powers that be to remain on the forefront of technology and innovation.
Were any of these Senators or Representatives crying foul to the Big 3 over their lack of vision starting 10 + years ago?
Roughly 1 in 10 American jobs depends in some way on the auto industry.
It has been reported that if just one of the big three shuts down, it will result in a loss of roughly $17 BILLION dollars in Social Security receipts and $20 BILLION in personal Income taxes.
I blame the corporate (non)leadership, but how can the local State Senators and representatives allow this to happen under their watch? It’s not like it’s been coming for a long time.
Posted by: Paige | December 19, 2008, 5:20 pm 5:20 pm
“Right wingers are so pathetic they have to make up things Obama said to get outraged at. ”
So you tell me what he was going to say then.
I’ll give you a hint, here is what he said on AIG:
“While we do not know all the details of this arrangement, the Fed must ensure that the plan protects the families that count on insurance. .. It must not bail out the shareholders or management of AIG.”
The shareholders are just ordinary people who hold stock in their portfolio. Why does he insist on treating us like criminals? If there were no shareholders, these companies wouldnt exist.
Posted by: BertieW | December 19, 2008, 5:35 pm 5:35 pm
“So you tell me what he was going to say then.”
I rather look at what he actually said.
Vs the land of make believe you inhabit.
“The shareholders are just ordinary people who hold stock in their portfolio. Why does he insist on treating us like criminals?”
So taxpayers have a responsibility to pay off shareholders who invested in a company that failed?
I had no idea you were a such a socialist.
Posted by: Ryan C | December 19, 2008, 6:09 pm 6:09 pm
So you dont know about the AIG bailout either.
Its a government liquidity injection through a loan based on LIBOR + 8.5.
There are no shareholders being paid off and they arent part of the problem which seems to be Obama’s midset.
Posted by: BertieW | December 19, 2008, 6:22 pm 6:22 pm
Republicans just don’t seem to want to accept that it’s government of the people, by the people, for the people; NOT government of big business, by big business for big business. We want a real government that WORKS now.
Posted by: Burdock | December 19, 2008, 6:22 pm 6:22 pm
“There are no shareholders being paid off and they arent part of the problem which seems to be Obama’s midset.”
ROFLMAO.
I love this made up world right wingers live in where Obama is hostile to shareholders.
Based on what? What you think he may have said?
Posted by: Ryan C | December 19, 2008, 7:08 pm 7:08 pm
We, the taxpayer, gave Goldman Sachs $10 billion from the $700 billion bailout because they may not make it. On the news tonight it was reported that company executives were given nearly $11 billion in bonuses. There was another bank that was also given bailout money that is paying bonuses. What the hell is going on?
People are struggling to stay in their homes and the fat cats getting fatter. Now the auto industry wants help, I say either major changes from both sides or let them go bankrupt. We, the taxpayers, are tired of paying for their mismanagement. Start writing your Congress Reps. and let them know, we who have no lobbyist on our side, are tired of their stupidity and that of corporate America!!!!
Posted by: 08 change | December 19, 2008, 7:13 pm 7:13 pm
Obama doesn’t have a clue. He has never been involved in a position of management, so he will just follow his advisors – something that Bush did as well. What happened to true leaders?
Posted by: GloomBoom | December 19, 2008, 7:20 pm 7:20 pm
He’s going to have his advisors work with auto management and the UAW. Boy that should work wonders. Throw in some pols and they will fix everything!
Posted by: GloomBoom | December 19, 2008, 7:22 pm 7:22 pm
Oh yes the automakers are big business alright, and we aren’t going to bail them out just to save the companies themselves. We are going to do it to save the jobs and the industry so we can make good quality fuel efficient cars instead of these idiotic gas guzzling junkie SUV’s that they threw their efforts into.
Posted by: Burdock | December 19, 2008, 7:33 pm 7:33 pm
“Based on what? What you think he may have said? ”
Yeah based on what he just said about AIG. Oooo nasty shareholders.
Now he says he wants shareholder to take some hits. Has he seen the stock chart since his election? Thats already priced in.
It really shows he doesnt know much about economics. I dont care how mellifluous his voice is to you.
Posted by: BertieW | December 19, 2008, 7:40 pm 7:40 pm
Bush, McSame, Osame-a, they’re all the same. Crony capitalism continues, the only change is who gets to schmooze with cronies. Have a great time draining the wealth of the next two generations, for four more years. Then brace yourselves for a strong, icy wind of real change blowing in from Alaska. The “good ole boys” will be out in the cold then, and not before.
Posted by: ragnar30066 | December 19, 2008, 11:09 pm 11:09 pm
As noted above, Obama is very wrong about the ‘shareholders’. Those who own stock, including auto workers themselves, have already taken a huge hit. Either the industry is worth saving or not. I think it is and I think it would be folly to let GM collapse. Now, Chrysler on the other hand should have been bled a bit of its cash…
Posted by: 1percenter | December 20, 2008, 1:08 am 1:08 am
This might is the last chance for favors to get paid back from Ol boy politicians to the OL Boys in the auto industry.The drama may well continue for months to come.There are favors involved.Outsourcing may be the only alternative to survive.As for Obama,what is it going to be?Restore consumer confidence or keep writing checks that balloon the deficit?
Posted by: the divster | December 20, 2008, 10:43 am 10:43 am
Not to worry. There will be over two million jobs created very soon. The USCENSUSBUREAU is hiring. I beleive this is Obamas job creation program.
Posted by: Rasputin3.14 | December 20, 2008, 10:57 am 10:57 am
Someone needs to clairify the term SHARHOLDERS. I do not think that that means only stock holders.
——————————-
One of if not the largest problem for the auto makers is the Auto Union. Getting paid 90+% of your wage during a lay off – get real. Glad to see the Auto Bank (sic) is suspended is a good move for today. But it has to go. All the Auto Union persons should by insurace, like Aflac.
Is there another industry that has such an unfair benefit…….Think people you are paying their wages/salary in the price of a car and when you add all the benefits that comes close to $70.00 per hour or a one week layoff costs $2,800.00; The month off well just a triffle more $12,040. [TWELVE THOUSAND AND FORTY DOLLARS] per month per person who is part of the union. Just think of that cost burdon.
Those of you in management you would not have a job if you wrote a Purchas Order for that at your firm would you??
Posted by: Ranger Phx | December 20, 2008, 1:59 pm 1:59 pm
Ranger:
I think you may be thinking of ‘stakeholder’, which is basically any busybody.
The site Investorwords defines shareholder as
“One who owns shares of stock in a corporation or mutual fund. For corporations, along with the ownership comes a right to declared dividends and the right to vote on certain company matters, including the board of directors. also called stockholder.”
Change dot gov defines ‘shareholder’ as:
n. bad, mean people who can not be counted on to make voluntary contributions to Ozymandias’ mighty works.
Posted by: BertieW | December 20, 2008, 4:25 pm 4:25 pm
I am a Gm worker and it appauls me when I hear my so called wages plastered in the media. These numbers are wrong, way off and I am tired of hearing how we are over paid. I amn skilled trades and I have a college degree and I work very hard and am proud of my job and my accomplishments. Does anybody verify any of the info that they publish because it would be nice if the information were true that is being told and then the people can make a decision of whether to hate us or believe in us. We pay taxes we spoend money in the community and the foreign companies take most of their profits back to their country. You talk about lay offs and and benefits and yet many other companies have good benefits and protect their workers why is it so bad that we are. I have taken wage cuts and turned down raises but the CEO level have not taken cuts. Why is it that the workforce are the only one that should make concessions. Please understand I am no better than any of you and in return you are no better than me. Please do not cast the first stone, we are not bad people we are just trying to raise our families and to save our jobs which will help the economy as well. Wouldn’t you? Please remember that the companies that we are being compared to have none or fewer retirees than the big three, why? because we care about our workers and we have been around longer. It should be like a medal that these companies take care of the people that made them successful, hard workers and smart people who now are retired. These people have been injured on the job or are now too old and have earned some compensation. Shouldn’t all companies have to take care of their people?, I hope so. Lastly what have the banks done with their money? We hear alot about retreats for the executives and bonuses, how is that helping the economy? It doesn’t.
Posted by: Sherry | December 21, 2008, 8:42 am 8:42 am
I bought a 1996 Suburban. Over 7 years I replaced the transmission, the water pump, the power steering pump, the alternator, the radiator and havd to charge the A/C every single year.
I bought a 2004 Sequioia and have had to do not one thing.
Bite me, GM.
Isn’t it time for a union break?
Posted by: drjohn | December 22, 2008, 10:18 am 10:18 am
“Does anybody verify any of the info that they publish because it would be nice if the information were true that is being told and then the people can make a decision of whether to hate us or believe in us.”
I have news for you- that data comes straight from the car companies. And one more thing- we don’t owe you a living! Maybe less arrogance, maybe better cars, maybe less demands, and maybe paying less for those corporate jets might help.
BUT WE DON’T OWE YOU A LIVING.
What are you going to do for my IRA losses?
Nothing? Why? Don’t you care????
Jobs are being lost in my town. What are YOU going to do for me?
Nothing???
It is your collective righteous sense of entitlement that drives people like me nuts.
Posted by: drjohn | December 22, 2008, 10:22 am 10:22 am
I can help GM get out of the hole that they are in , But when I went to
their web site to find out how and who
to contact , they had an investor page
so I went there and there was a submission area for ideas it was there
that I found out that GM wants me to
give up all my rigths and give them
what I have for free and I get nothing,
that sounds like they still have
their hand out trying to get something
nothing !!
Do you think maybe I should go to
Toyota with what I have ?
Posted by: Leon | December 23, 2008, 3:53 am 3:53 am
Drjohn:
So you fell for it and bought one of those huge pieces of junk. Do you think it fell apart because it was poorly made? -Or could it have been poorly designed?
So your IRA isn’t doing so well? Did you vote for George Bush twice?
It seems like everyone is getting what they paid for.
Posted by: Skip | December 23, 2008, 7:32 pm 7:32 pm
At first I thought that bailing out the auto industry was a bad idea. Now that I’ve thought about it and considered it from all sides, I’ve changed my mind. I think it’s necessary. There are too many other industries and businesses that are related or tied to the auto industry that will fail or at least be affected if GM, Ford, and Chrysler fail. There are too many jobs at stake. Something must be done to help them but I think strict guidelines must be put in place to insure that the bailout money is spent for it’s intended purpose and that it’s not given in bonuses to the CEO’s. I think a “car czar” should be appointed to oversee the bailouts and he should be required to give an account to the government as to how every penny of the bailout money is spent.
Posted by: countrygirl | December 26, 2008, 1:50 pm 1:50 pm
If federal help is necessary for the big three, It should be a loan and it should be after they file Chapter 11 and renegotiate contracts, If they look viable after that make a bridge loan. Who will make concessions when they already have the money.
Posted by: Philip V. | December 26, 2008, 10:22 pm 10:22 pm
This auto bail out is a joke. American made cars are crap and their warranties blow. All the money we just handed to them went to pay their retirees their pension. Thast not helping them they should of filed chapter 11. I resent bailing out an industry screws the american public with crap cars.
Posted by: vickie albright | December 27, 2008, 2:01 am 2:01 am
when it comes to socialism, obama wants to make us all poor. Yes, we are to salute him next week; and then he will steal every single dollar out of our 401Ks and give it to his crony friends.
Posted by: McCainism | January 16, 2009, 12:49 am 12:49 am
When rich people get in trouble, they go to the government. When poor people go to government for help, we call that welfare. This is a double standard that needs to go away.
Posted by: Chetan Chandrashakhar | March 30, 2009, 4:23 pm 4:23 pm
Well, with all your complaints, what do you think Obama SHOULD be doing? Should he just back off and let the economic crisis play itself out? Is the Obama bailout plan really a waste of tax money? I think it’s too early to tell.
Posted by: Obama Bailout Blogger | August 18, 2009, 1:46 am 1:46 am