(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.”
This will probably not be posted but here goes anyway. What is the village idiot Bush wanting to do now? Do more out sourcing of American jobs to Columbia? You bet you no agreement with Columbia, take care of the American people first Jim Hall Kansas City Missouri.
we could get our auto jobs back in the states.
As I sit here reading your comments, I just can't find anything worthy of saying about this article. You see, today is Veterans day. A day I really feel deeply about due to I am a veteran. I would like to use this space to say first off, for all of the people who ever wore a uniform and/or still do from one of the branchs of the United States military, I salute you. And let's not forget about those who never wore a uniform, but worked as civilian in varies government positions, that have supported and continue to provide the support that our military needs to operate effectively. Another salute goes out to thoses families, who have endured such hardships, while we are out there protecting and defending the United States and it's interest. A Soldier, Marine, Sailor and Airman is only as good as the support we give them. So while we are going back and forth about President Obama versus President Bush, let's take a moment silence to remember those who served and serve proudly, fought and continue to fight hard and those who died with honor for this great nation. We are the United States of America.
Is bailing out automakers with $25 billion loans to keep them afloat going to put Main St back to work? You bail out the Big 3 – but who can afford a major purchase?
If this goes through there needs to be huge strings attached to it:
High fuel efficiency (which we know is possible).
Affordable Altenative Fuel vehicles within 10 years.
No Golden Parachutes for executives. If stock options are tied to their bonuses they may not be implemented until after the bailout money is repayed.
The great weakness of the Democratic Party in rural
America is the Abortion issue. The great weakness of the Republican Party in rural America is the Free Trade issue. In the rural South, Republicans show pictures of fetuses, and say thank the Democrats for this aborted fetus. Democrats need to stand in front of closed rural factories, and say thank the Republicans for this closed rural factory. Now that Clinton is gone, Democrats could make Free Trade an issue that hits home with rural voters. Southern rural voters know that they cannot compete with child labor in China.
Obama is shrewed. His camp leaked this discussion to prove, yet again, Bush is out of touch and putting jobs abroad over jobs in the US.
Yes, like many I have my doubts about an auto bailout but I'll give Obama the benefit of the doubt on this one.
Obama stumped calling for the re-tooling of Detroit to make the cars of tommorow today. I suspect any bailout would be a short-term cash infusion until a more detailed plan can be put forth (after Jan 20th) for the long-term remake of the auto industry.
it is suprising how many hard "democrats" still drive foreign cars because it suits them. and a bailout for auto industries would help them how ?
Obama wants to use more of the taxpayer money for the auto industry now. I thought the Democrats reduced the deficit not expanded it.
I read the article on Fox and read some of the comments. This is reprehensible to say the least. Fox has it's readers in a frenzy to go out and buy guns, One poster said Obama is getting the gas chambers ready for those who disagree with him. IMO, Fox has crossed the line with this story.
Why would "the demise of GM' be part of Bush's legacy? THAT'S RIDICULOUS!!! Who's the CEO? I don't think leading GM was one of the president's responsibilities!!!!
"Oh-No" and Ben–
Although the unions have not helped the industry, ask yourself why they exist? They exist because management could not be trusted to treat the workers fairly. The Big 3 along with most of corporate America has been pleased to take care of itself and its friends. Workers are expendable, if Americans want a living wage, just send the jobs overseas and then blame the unions.
Unions have given you a 40 hour workweek, vacation time, and health benefits. But, sure, listen to Rush and Hannity. Maybe they should get a real job.
Bailing out the auto industry is a horrible idea. The Big 3 are mismanaged and too technologically inferior to foreign competitors that any money given to bail them out will be wasted. I voted for Obama, but an American auto industry bailout is a short-sighted answer to a problem that has persisted for many years. We need to put that money into areas of the economy that won't squander it.
there used to be a saying "as general motors goes so does the country" i don't know if that is actually the case anymore but i don't think now is the time to let GM, Ford or any big american business go under. yes they did some stupid mgmt judgment and it should be given with strings attached, no bonuses etc. but it must be given. take that columbia free trade and shove it. america first now and always. look what wal mart has done to this country, now we can buy all of the crappiest, lead filled poison we want.
The only source of true defense against anti-trust is in the federal level governmenting.
The economy requires a retooling of road infrastructure to a modern tone; such creates the need for a new brand of automobiles.
Just taking the inner lanes, for now.
Drive everywhere, and trade.
Thomas, Pelosi already took impeachment off the table; and I agree. We must heal as a nation. We learned a grave lesson from Bush; and we will be stronger for it. History will be the judge of Bush, and the legacy he leaves his offsprings.
Looks like Rohm is bringing his penchant for leaking to the press, that he enthusiastically did, when he was in the Clinton White House to his new job.
As for Detoit – let them figure it out themselves. All the jobs won't be lost, they will go into bankruptcy, trim the fat and bloated benefits of the union and managment employees, and come out a stronger industry. The only place the auto industry is in trouble in the USA is in Detroit. The other companies operating in other states are doing OK.
Hey Lisa when they stop building poorly engineered crap I will buy American cars. Still driving a Honda with 175,000 miles on it, had it inspected and it needed brake pads and wiper blades. Besides my Mazda also a great car was built in Kentucky by UAW workers. Why can't GM using the same workers in this same country build a care that is as good as these...had many US cars in my life and they never last past 80,000 miles and weren’t that hot for the 80,000 miles I drove them.
Eight years of disastrous economic, political, and social policy is going to take a dozen years to repair. Good luck President-elect. You were handed dung on a plate.
Obamedia isn't even in office yet, and he already has his sights set on bankrupting the country.
Apparently those who are saying, NO MORE BAILOUTS don't realize that if GM goes under, we are talking about 5 million people out of JOBS!!! Than it will have dominoe affect to other sectors and then next thing you know the other 2 Big ones FORD And CHRYSLER will go under with close to 10 million more jobs lost. So basically we are talking about close to 20 million jobs lost if those 3 go under. Do you really want that to happen? Then all of obama's energy plans will not go thru cause the car dealerships will be bankrupt which means all the jobs he talked about will not happen. The country is already in debt if giving them money will help save them GIVE THEM THE MONEY NOW!! The key to bringing us out of this recession is if people have GOOD PAYING JOBS so that they can SPEND MONEY. If their are no jobs, NOBODY WILL SPEND MONEY which means we will be in the 2000 version of the THE GREAT DEPRESSION!!!
The problem that affected the Auto Industry is that no one is willing to commit to car payments while people are losing jobs. The demand for cars went down because joblessness is going up.
Bring cash to consumers and they will buy. When they do, the demand for goods and services will go up. If they don't spend, they will put that money in their savings which will help the banking industry's liquidity anyways.
When demand goes up, jobs will be created to meet production. When jobs go up, people will be more confident committing to 5 – 6 year car loans.
The leaders of this country does not get it. They think US automakers are losing money because people don't like their cars. It's not that; no one wants to get into a car loan when people are losing jobs!
I wish they would bail me out so I can go to some expensive parties and vacations on that money
The White House has to realize its all about jobs. No jobs equals no recovery. The next incentive package needs to have a 'buy American' part to it where there is a tax reduction for buying products with substantial American labor and/or material content .
In the meantime, the Big 3 have their own employees as well as the employees of their suppliers to be concerned about, and the government needs to do what it can to ensure their survival, if not as three companies, then as two or one combined. They are definitely too big to fail.
If the American auto companies would make more efficient cars I would be the first in line to ask for a bail out.
I watched 60 minutes were the CEO for GM was all smiles and mocking a man who had created a car that runs on electricity. This is what makes Americans upset and don't want the automakers bailed out, it is the same as AIG. They want more money for what the Christmas party??
The bailouts should be tied to several demands.
1) The current CEO needs to go if they are in trouble he didn't do his job correctly and none of us would have been treated differently in our jobs.
2) No bonus for anyone until the company is turned around.
3) No golden parachutes unless the company is profitable.
4) Expenses out of the normal course of business needs to be approved by the bailout panel. To avoid the situation that occured with AIG. ( 200K spend on a working retreat to a health spa)
I don't know how the people in charge in AIG have not been fired yet!!!
Being a former engineer with the auto industry, I have no sympathy with North American car manufacturers who have long ignored the crying need for fuel efficient vehicles and a long term program for alternative fuel vehicles.
Having said that, Obama must do whatever is necessary to support initiatives for alternative fuel vehicles, but not bailouts.