November 11th, 2008
03:03 PM ET
5 years ago

Sources: Obama pressed Bush for auto industry bailout

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Obama and President Bush wave to reporters as they head into the Oval Office on Monday.
Obama and President Bush wave to reporters as they head into the Oval Office on Monday.

(CNN) – At their private Oval Office meeting on Monday, President-elect Barack Obama urged President Bush to support billions of dollars in aid for the struggling auto industry during the upcoming lame-duck session of Congress, according to three officials briefed on the meeting.

The officials said Bush privately expressed skepticism about taxpayer money for automakers on the heels of a string of government bailouts for other industries, and the president also urged Obama to help push through a free trade pact with Colombia – a key legacy item for the outgoing administration that is facing stiff resistance from Democrats on Capitol Hill.

But a senior Bush administration official seemed to downplay suggestions that Bush was offering a quid pro quo by saying the White House still believes the trade deal “deserves to pass on its own merits” without being linked to anything else.

The officials familiar with the meeting said Obama made the case that dramatic action needs to be taken this year – rather than after he is sworn into office – because the Big Three U.S. automakers are bleeding cash at an alarming rate.

One of the officials noted that about one in ten jobs in America are tied to the auto industry, and if one of the companies goes bankrupt it could have a massive spillover effect into the credit industry and other sectors. “The numbers are so staggering,” said the official. “It’s a huge piece of the financial fabric of the country.”

The senior Bush administration official said the White House is “open to ideas from Congress to accelerate funds they’ve already appropriated” to help the auto industry.

But the administration official said support would come “as long as funding will continue to go to viable firms and with strong taxpayer protections” linked to the auto industry aid.

An official in the auto industry told CNN that bringing the Colombian pact into the negotiations could be a poison pill that prevents passage of an auto industry package. But a senior Democratic aide suggested Congress may be willing to call Bush’s bluff and try to pass an auto industry aid package without the trade deal.

The senior aide said Democrats do not believe “this president wants to add the demise of GM to his legacy list.”

soundoff (270 Responses)
  1. Jim Doyle

    In the New York Times report of this story, it was mentioned that Obama supports the bailout of the auto industry only on the condition that they are required to produce more energy-efficient vehicles. Too bad CNN left out this important detail. In any case, there you have it. Bush's condition is a free-trade agreement with a terrorist regime, while Obama's condition is that they produce better cars. What a contrast...

    November 11, 2008 12:33 pm at 12:33 pm |
  2. M.E. from Oregon

    At least a few people here see where a major problem lies with the US automakers. It's the UAW...if you could cut them out of the picture then things would change dramatically.

    November 11, 2008 12:33 pm at 12:33 pm |
  3. 1/20/13

    Barry only wants to help the lazy union members who supported him.....Maybe the union that spent 45 million endorsing Obama can fess up some money for GM they caused this mess

    November 11, 2008 12:33 pm at 12:33 pm |
  4. Beth

    I voted for Obama but I do not agree with the auto makers bailout. I no longer buy american cars, because I learned my lessons over the years: they are simply not good quality. So I stick to Honda or Toyora.

    Bailout of banks and financial institutions was one thing. Bailing out the car industry is simply wrong. Ford, etc have had many years to come up with good, desirable cars, and they have not done so. DO NOT BAILOUT the car industry!

    November 11, 2008 12:33 pm at 12:33 pm |
  5. Jennifer

    Why is a trade agreement with Colombia okay, but trade embargos are still held against Cuba? The human rights and government record of Cuba is horrid enough to maintan embargos against them, but Colombia's record is just fine? Bush should check with Amnesty International and ask what they think of Colombia's record, and even compare it to Cuba!
    Maybe if Bush and his good ole' boys thinks Colombia is such a fabulous nation, they should all get together and go for a little motorcycle ride through the Colombian mountainside, and see how safe he feels!

    November 11, 2008 12:34 pm at 12:34 pm |
  6. paul

    NO MORE BAIL-OUTS FOR ANY COMPANY!!! I am in debt. And I have to figure it out and even though I am just one person and my debt compared to a huge company is a nano-debt, I am still in debt with no one other than myself to save me!

    Let GM and Ford go into Chapter 11, allow them to break the contracts with Unions, allow them to work out their debt the way we all do by working with creditors and such. With both companies burning through over a billion dollars a month, any additional bail-out would just prolong the direction to chapter 11.

    Granted they have upwards of 200,000 workers and many more in other industries, but we have to struggle to survive and the auto makers and unions (as well as banks and others) caused their problems, as did I. The current economic situation is only making it worse.

    NO BAIL-OUT for companies that either should go under or should change overall management!

    November 11, 2008 12:35 pm at 12:35 pm |
  7. jp1667

    You people are morons to think that bailing out a dying industry that won't CHANGE will somehow save jobs in the US. Get a clue!

    November 11, 2008 12:35 pm at 12:35 pm |
  8. Shirley

    The leak we know where it came from "Obama". He can't keep his mouth shut. This is great for our country. What else is he going to do. You people that voted for Obama just wait and see how he is going to take this country down. But I guess you don't care.

    November 11, 2008 12:36 pm at 12:36 pm |
  9. no bailout

    Why should be give auto makers money to make more huge gas guzzlers that no one wants to buy anymore since that's all they know how to do? Really, liberals? This is what you want? What about the environment?
    Seems like these auto makers would finally have an incentive to build hybrids and other fuel efficient cars if the only way they could get money is to actually sell something people want.

    November 11, 2008 12:36 pm at 12:36 pm |
  10. james

    Why Columbia ?????? Because they have great cocaine !!!!!!!

    November 11, 2008 12:37 pm at 12:37 pm |
  11. Megan

    Sorry, but the big 3 got themselves into this mess, it's not up to us to get them out. They aren't competitive and haven't been for years. If they go out of business, Toyota and Honda are mfg. in America so hopefully they can expand here. I am so tired of rewarding bad behavior

    November 11, 2008 12:37 pm at 12:37 pm |
  12. ANGIE

    Bush Pathetic there he goes again rather then worry about his own country and the American People,And saving millons of peoples Jobs he worries about Columbia, that man is a DISGRACE TO OUR COUNTRY AND US AS THE PEOPLE, IMPEACH HIM NOW AND LET OBAMA IN THERE!!!!!!!!!!!!!!!!!!!!!!!!!!!

    November 11, 2008 12:38 pm at 12:38 pm |
  13. maynard hopkins wi

    let them sink enough is enough

    November 11, 2008 12:38 pm at 12:38 pm |
  14. texas

    Meaby he`ll get a lifetime supply of free blow --–

    November 11, 2008 12:38 pm at 12:38 pm |
  15. CanIcallyouJoe

    I am furious that our government keep insisting on funding the golden parachutes of the CEOs and corporations that got us into this mess.

    No more bailouts!!

    You want to give AIG an additional 25 Billion!? Are you kidding? Didn't they just blow several million on fancy trips!?!

    Keep the auto industry afloat – but just enough to do that. Do not shower them with enough money to flourish; there is no reason other than their own profits that all Americans aren't driving 300 mile per gallon cars, after all.

    November 11, 2008 12:39 pm at 12:39 pm |
  16. Jeff from Atlanta

    This is getting ridiculous. Who are we going to bail out next???!!

    If this is what we have to expect from Obama, God help us. Didn't he learn anything from the Fannie Mae disaster that government intervention into free enterprise destroys the system.

    How stupid is Congress!!??? I didn't think it could get worse but the democrats are quickly proving me wrong.

    November 11, 2008 12:39 pm at 12:39 pm |
  17. Silence Dogood

    Big Corporations gave Obama big money donations, now it is time for the PAYBACK.

    You didn't really believe all that small contributer nonsense, did you?

    Someone please re-read Animal Farm. The pigs are moving into the farmhouse..... again.

    November 11, 2008 12:39 pm at 12:39 pm |
  18. Susan

    I didn't believe the first bail out plan would work and I don't think compounding the dilemma with more bailout plans makes sense. We are a capitalistic society. Businesses have to survive or fail on their own merits.
    Lets use the bailout money to create jobs for the 1 out of 10 people who would loose their jobs if we don't bail out the auto industry. We have construction projects, social projects and other projects where jobs could be created. It would be a win-win situation.

    November 11, 2008 12:39 pm at 12:39 pm |
  19. alreadytiredofit

    DO NOT BAIL them out! They deserve everything they're getting. They have mismanaged their companies and don't build vehicles people want to buy! I say Exxon and the other oil companies can bail them out with their record profits since they've been in collusion with one another to quash alternative fuel vehicles. All the executives should be fired, then tried and put in prison!!!

    November 11, 2008 12:40 pm at 12:40 pm |
  20. Eric the hedge fund manager, Ann Arbor, MI

    The UAW and their tactics KILLED the US AUTO BUSINESS. Growing up near Detroit in the 50" thru mid-70's, I saw their demands escalating each time they renewed their contracts.

    You cannot pay $28 per hour ($75 an hour with benefits) and compete with the "world auto market."

    The unfortunate thing is, that the $50 billion Nancy Pelosi and Obama are wanting to pay will GO TO THE UNIONS (their democrat supports) through their pensions and health care...ENOUGH IS ENOUGH.

    NO BAILOUT FOR GM, FORD OR CHRYSLER.

    November 11, 2008 12:40 pm at 12:40 pm |
  21. Michelle

    The unions have driven the American auto industry in the ground. We have no choice but to bail out this industry because so many people benefit job-wise directly and indirectly as a result. Think about it: every little item that goes into a car whether it an air filter or muffler has to be manufactured somewhere. American people depend heavily on this industry.

    What has to change in the way they do business. Unreasonable pension costs as a result of the unions have contributed to their demise. President-elect Obama is right to put some conditions on the bailout but he must also wake up to the impact of unions on this industry. Today, it just isn't necessary to motivate employers to provide good pay, benefits and safe working conditions.

    Finally, its time for President Bush to be called on the carpet for his continual poor decision making when it comes to supporting agreements such as the Columbia Free Trade agreement on the backs of the American people. Even as it exits, he's still contributing to the problem and has his priorities out of line.

    When is he going to be on Meet the Press or Reliable Sources to answer these questions and others that the American people want to know?

    November 11, 2008 12:41 pm at 12:41 pm |
  22. ANGIE

    IMPEACH BUSH NOW!
    IMPEACH BUSH NOW!
    IMPEACH BUSH NOW!
    IMPEACH BUSH NOW

    We the people Elected Barack Obama as our next President,Impeach bush now so we can save our country from the BUSH DISASTER PEOPLE COME TOGETHER UNITE AND LETS GET BUSH IMPEACHED AND OBAMA IN

    November 11, 2008 12:41 pm at 12:41 pm |
  23. indepdentvoter10

    DO IT George....We cant buy imports forever and we need to help these plants. This shouldnt be an issue to stutter on. GET TO IT.

    November 11, 2008 12:41 pm at 12:41 pm |
  24. TF

    The unions drove the U.S. auto industry off of a cliff and now we have to pay for it?!?!.....GM, Ford, and Chrysler all need to go through bankruptcy to get it together. GM is set up to support a network of 10,000 dealers in the U.S. which is not sustainable; Toyota has approx 1000 dealers in the U.S........Big, bloated, and inefficient; just like our government. And now Obama wants to spend more money and create more government. Guess what, you are avoiding the inevitable (the market needs a MAJOR correction). MORE GOVERNMENT IS NOT THE ANSWER!!!! It is why we are in the mess to begin with (Fannie, Freddie, bailouts, stimulous checks). And for everyone who says the service industry isn't as valuable as the manufacturing industry, let me know what your life would be like without doctors, lawyers, bankers, insurance workers, and teachers.

    November 11, 2008 12:42 pm at 12:42 pm |
  25. Susan

    If we, as a nation, decided that we want Change, why are we trying so hard to maintain the status quo of big business?

    November 11, 2008 12:42 pm at 12:42 pm |
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