Democratic Platform: Obama 'Rescued' Auto Industry -- GM, Chrysler . . .and Ford?
(CNSNews.com) - According to the Democratic Party platform, President Obama rescued Detroit’s Big Three automakers – GM, Ford and Chrysler -- leading to their recovery and resurgence.
However, the claim flies in the face of the fact that one of the Big Three – Ford – managed to turn things around by itself, without taking federal help.
According to the Democratic platform: “President Obama and the Democrats boldly rescued America's auto industry, saving more than one million jobs, preventing the collapse of the industry's supply chain, and shoring up countless communities, while revitalizing the backbone of America's manufacturing sector.
“All three of America's biggest auto manufacturers—Chrysler, GM, and Ford—are stronger today because of President Obama's decisive leadership. GM and Chrysler have repaid their outstanding loans years ahead of schedule, new American cars are inspiring pride, and the auto industry added more than 200,000 jobs in the last three years.
President Obama himself, speaking on Labor Day in Detroit, re-iterated the claim.
“And here’s what else we said, Detroit. We said that American autoworkers could once again build the best cars in the world,” Obama told a crowd in Detroit.
“So we stood by the auto industry. And we made some tough choices that were necessary to make it succeed. And now, the Big Three are turning a profit and hiring new workers, and building the best cars in the world right here in Detroit, right here in the Midwest, right here in the United States of America,” he said.
However, Ford refused to accept any of the $80 billion in federal money that GM and Chrysler accepted in 2008 and 2009.
And as CNSNews.com reported, by 2010, one year after the bailout, Ford had managed to turn things around and was posting significant profits without federal help, while both GM and Chrysler made improvements but continued to experience difficulties.
In 2010, Ford earned $6.6 billion -- more than double its 2009 profit of $2.7 billion – and U.S. sales for Ford jumped 20 percent -- double the rate of the industry.
GM, by contrast received $51 billion in bailout money from taxpayers in the form of Troubled Asset Relief Program (TARP) money and loans, according to the Treasury Department. The bulk of the money was in the form of equity – meaning, U.S. taxpayers received stock in exchange for the bailout amount.
GM also posted a turnaround in 2010, earning $4.7 billion that year -- its first annual profit in six years -- but most of the profit was owned by American taxpayers.
Chrysler, which received $12.5 billion in TARP funds, ended up losing $652 million in 2010, despite the fact that both sales and profits were up.
U.S. taxpayers, meanwhile, are still not off the hook, as commentator Michelle Malkin explains in her column on CNSNews.com's "The Right Views, Right Now" blog.
Though Chrysler repaid $11.2 billion of its outstanding TARP loans in 2011, six years ahead of schedule, according to the Treasury Department's report to Congress for August, GM has only paid back $23.2 billion -- and still owes $23.4 billion.
And GM's lending subsidiary, Ally (the former General Motors Acceptance Corp.), still owes most (about $15 billion of $17 billion) of the money it received.