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

Sources: Obama pressed Bush for auto industry bailout

,
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. DMD

    I said this yesterday, and it is worth repeating today:

    REPEA: or severely overwrite NAFTA and bring back our manufacturing jobs to the USA. And I would like to add, no deals with Columbia, Mexico or who have you that is even remotely similar to NAFTA because NAFTA is not working.

    This is a bit extreme but: close our bordres for 10-20 years and clean up house before we open our doors again.

    November 11, 2008 12:54 pm at 12:54 pm |
  2. Dixie AZ

    I do feel that union demands have helped push the auto industry over the edge. My brother – now deceased – was a union member. Every month he received a leaflet/magazine from the union telling him what products to buy, what cigarettes to smoke, who to vote for locally and nationally. But, American auto makers have certainly been left behind by the times. My heart goes out to those that may lose their jobs and retirement if something isn't done.

    November 11, 2008 12:55 pm at 12:55 pm |
  3. Paul, Riverside, CA

    Bush wants them to fail in hopes that it would make any rescue efforts by Obama even harder.

    The Auto industry should be getting the HELP, Wall Street on the other hand should have been given a violin to play.

    November 11, 2008 12:56 pm at 12:56 pm |
  4. Dave

    To all you people going on about how Obama camp leaked this info, it's possible they did..but where is the evidence for this in this article ???

    The article mentions "officials" as the source and quotes a senior Bush administration official. Sound more like the info came from bush people to me and you poeple are interpeting the way you want to..wether or not you turn out to be rikght and it seems not its clear you hav an agenda and an ex to grind.

    November 11, 2008 12:56 pm at 12:56 pm |
  5. IowaMom

    One one hand I am so sick of having to bail out these big companies. But on the other, it seems so many jobs are tied to these three companies that it makes some sense to help them out. Having said that, I think there needs to be some strong strings attached.

    Like this next AIG bailout, apparently they threw some lavish party that was supposed to be kept secret (I briefly heard it on the news this morning, so I don't have all the details).

    If we bail them out, we need to make sure it's actually going to do some good and go where the money really needs to go.

    November 11, 2008 12:56 pm at 12:56 pm |
  6. Rob R

    I'm not 100% sold on these bailouts, but on the flipside, who are the ones that really get hurt if these companies go under – the workers. Is it their fault that gas was running $4/gallon and demand for cars has stalled? If GM goes under that will cause some catastrophic job losses for a lot of people and will further devastate communities that rely on that income.

    If the government can protect the workers of these companies somehow, then I don't think they should be bailed out, but if thousands of workers are going to put on the street, should the government just sit idle at let it happen?

    November 11, 2008 12:56 pm at 12:56 pm |
  7. Dan E.

    This is exactly what I would expect from Obama who has promised no secret deals and closed door hidden agendas. Bush being angry over "leaks" of his secret deal – Colombia trade deal for auto bailout – is what got Bush and the republicans the whipping they just took in the elections Go Obama – Keep it open

    November 11, 2008 12:58 pm at 12:58 pm |
  8. Dave

    To all you people going on about how Obama camp leaked this info, it's possible they did..but where is the evidence for this in this article ???

    The article mentions "officials" as the source and quotes a senior Bush administration official. Sounds more like the info came from bush people to me and you people are interpreting the way you want to..wether or not you turn out to be right and it seems not its clear you hav ean agenda and an ax to grind.

    November 11, 2008 12:58 pm at 12:58 pm |
  9. John in NewYork

    Mr Obama is my choice. But we cannot agree on everything.
    The big 3's problem did not start just recently. This is not even a Union problem, it is simply they are BAD companies.

    If the union wants to save them, fine let them. Even a bridge LOAN is a bad idea because it is too risky. These 3 will go bankrupt. It is just a matter of when. WE don't need to be supporting zombie companies.

    The airlines are next. Get ready.

    November 11, 2008 12:58 pm at 12:58 pm |
  10. Betty

    Where does it end ? ... or is this just the beginning. Obama is not in office yet and already he wants to spend more tax payer dollars. We bail out financial institutions ; now they increase interest rates. Now the we pay twice.... OH, that's right.... Obama is going to 'rob from the rich to give to the poor'. Looks to me like he's got it backwards....

    November 11, 2008 12:58 pm at 12:58 pm |
  11. Dan

    Hey Obama. The auto industry doesn't need anything real or tangible like a taxpayer bailout. Just implement your plan to bring change to Washington, with a spirit of hope and coming together, and an attitude of "yes we can!" LOL.

    November 11, 2008 12:58 pm at 12:58 pm |
  12. Simmy

    Mr. President-Elect, you look fabulous! Keep making me proud!

    November 11, 2008 12:58 pm at 12:58 pm |
  13. David

    How can we justify years of bad behaviour by the auto companies by bailing them out. Is there no accountability any more

    November 11, 2008 12:59 pm at 12:59 pm |
  14. blaising

    Sure, the American auto industry has failed to prepare for, what was then, the future. But remember, to get rid of a pest, vermin, or terrorist threat, one needs to eliminate the food source. in the case of the big three, the food source has always been the American consumer. They keep on buying those big gas guzzling mouth-breather cars, SUV's, and trucks.

    Americans are the worst kind of enablers when it comes to the big three.

    November 11, 2008 12:59 pm at 12:59 pm |
  15. Dave, Central Illinois

    What did the "senior aid" mean by adding the demise of GM to Bush's legacy. My God, is there anything that the Dems and their MSM press buddies do not blame Bush for? Maybe the lack of vision at GM, union greed, and skyrocketing oil prices had something to do with it. Just like Katrina – a inept Dem mayor and governor, who are responsible for coordinating federal resources, screw up and Bush gets blamed for it. I wonder if "the One" will get the same treatment? Likely not, he will cry racism to scare any critics away.

    November 11, 2008 01:00 pm at 1:00 pm |
  16. Phil in KC

    I continue to believe that bailouts should be accompanied by one stipulation, in particular. Whoever led the company into its current mess should be fired. If their lack of ability and/or foresight was such that they got their company into its current situation, why would anyone think they could lead them out of it?
    In the case of Wall Street, it was pure greed and short-sightedness.
    In the case of Detroit, it was stupidity and short-sightedness – and a lack of hindsight. They complain that they were merely producing the vehicles that consumers wanted to buy and had no clue that gasoline would rise so sharply. Does this sound familiar? All you have to do is go back and look at what happened in the 70's, with the fuel shortage and gas lines, when Detroit was producing big iron. They got caught short then and maybe – perhaps – they could be excused. But now? There is no excuse for failure to develop and build fuel efficient vehicles. Even if people weren't buying them in large numbers, it was only a matter of time. They needed to have that development current and products in the pipeline. They needed to have production lines that could be switched over in such an eventuality. And, they've had 30 years to work on it. Shame on them. And shame on us for bailing them out with no strings attached.

    November 11, 2008 01:01 pm at 1:01 pm |
  17. Brenda R. Harris

    My husband retired from GM. The only way to rebuild or help GM is to charge a tax on them when they send parts back to the States. This way maybe they will return home (state side ) and bring work back to our own country.

    November 11, 2008 01:01 pm at 1:01 pm |
  18. Real Patriotic stuff ...

    I have a suggestion for OBAMA...

    Instead of asking congress for a bail out, why don't you ask all Americans to make their next car purchase an AMERICAN made car from GM, Ford or Chrysler. That should stop the bleeding...

    November 11, 2008 01:03 pm at 1:03 pm |
  19. Al in VA

    We need to see major concessions between the UAW and the Big Three Automakers before any taxpayer investment is made to the auto industry.

    November 11, 2008 01:04 pm at 1:04 pm |
  20. Sweetie

    Obama is trying to make Michigan’s Governor happy for all she did to get him elected!

    We the people have no obligation at all to Bail out an Industry that should have helped itself years ago by building cars that are fuel efficient!

    Please stop Obama from filling one of many Promises that are not good for the American people or its future!

    This novice is going to require Daily watching from all of us!

    November 11, 2008 01:04 pm at 1:04 pm |
  21. Vicki5

    If some of the bailout money is used for the auto industry, it should be as an investment in new jobs by creating more fuel efficient vehicles and the like.

    As for what Truth Hurts says, I agree. It is downright scary that hatred and bigotry is being fueled. Please CNN, use the same type of reports like the Fact Finders did in the election. Put these people and their hatred out for all to see and shun. I won't go to their sites at all because they scare the tarnation out of me. Please expose them for the ignorant ones they are.

    November 11, 2008 01:04 pm at 1:04 pm |
  22. Tom

    ATTACH STRINGS!!! If automakers get a free lunch with no requirements to improve fuel economy, they'll be back building SUV's as soon as oil goes below $50/barrel. And as soon as it crosses $100/barrel, they'll be back for another handout.

    November 11, 2008 01:05 pm at 1:05 pm |
  23. Simpliticus

    I find this whole bailout process fascinating in that what constitutes a socialistic venue is being applied to financial concerns whereas the same application to help foreclosure people is frowned upon. This just might be George W. Bush's redistribution process through the chaotic mess he has essentially allowed. Indeed, a comparison of the S&L debacle with this ongoing mess would be the thing to do.

    November 11, 2008 01:05 pm at 1:05 pm |
  24. Reality

    I appreciate what President Obama is saying about the auto industry. It's collapse would be devastating to our economy. One of the issues the industry has is the burden of their legacy expenses – union concessions, pensions, health care, etc. Their Eurpoean and Asian competitors building autos in the U.S. don't have these expenses. Yet, this is only one of the problems faced by the Big Three. There more fundamental problem is the quality of their products. They just don't build the feature-rich, dependable autos that their foreign competitors do. Will bailing them out going to change this? No, unfortunately it won't. The U.S. auto industry must undergo radical changes in nearly every aspect of their business models. They are still tryng to build and market cars the way they did in the 1950s. It just won't work anymore. If the government bails them out and relieves them of some of their legacy expenses, they should be required to close overseas production plants and bring those jobs back onshore.

    November 11, 2008 01:05 pm at 1:05 pm |
  25. American Dream

    It is not a question of the auto industry "deserving" a bailout. This money would be a loan, to be paid back to the taxpayers. If the ship has a hole below the waterline, the captain doesn't decide if it deserves to be plugged. He takes responsibility and acts.

    November 11, 2008 01:05 pm at 1:05 pm |
1 2 3 4 5 6 7 8 9 10 11