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. smart move

    I find that we need to help the auto industry, because it will create more jobs. I may not be the biggest fan of bailouts, but we would not be in this situation if it was not for the last eight years of failed policies. Although the bailouts do seem to correct or save those who did wrong, we cannot forget that there are the little people within those companies who work hard and are losing their jobs. I find that our best thing is to do a bailout, but that we also hold accountable those who created this mess. Ergo, i believe that they should be taken out of their positions as CEOs and hire new individuals who will help make these goverment actions more successfull. We should learn from our mistake with AIG, we bailed them out, but we should have also fired those who got us in this mess. Had we done that, then the AIG executives would not have been spending our money on resorts and spa days.

    As for the colombia free trade agreement, we cannot go through with this, i believe in free trade, but I do not believe in the abuse of free trade. This will only hurt America more.

    November 11, 2008 01:13 pm at 1:13 pm |
  2. Sam

    Wow. Obama can't even keep his mouth shut about a private meeting with the President. I would venture to say that Bush will in the future limit his conversations with Obama to the weather and other small talk. That One's arrogance is incredible. I can't wait to watch the media turn on him at some point in the next year or twoo- and they will.

    November 11, 2008 01:14 pm at 1:14 pm |
  3. Lauren

    You hit the nail on the head 1/20/13,,,,,,

    This is nothing more than the Messiah paying back a favor. The Unions backed him, now he want to kiss thier butt to have all those overpaid Union workers keep thier jobs.
    AND the white collar CEOS running the companies into the ground.

    Get ready to fall America, everyone will get bailed out that Obama owes, and he owes a LOT of people.

    Those of you who voted for him, now you will see the real Obama,,
    Palling around with his buddies who got him millions of dollars to buy the elections, and forgert all about you poor folk who fell in ove with his fancy speeches.

    November 11, 2008 01:14 pm at 1:14 pm |
  4. jason

    Last thing we need is anymore stimulus checks for taxpayers, Or anymore bailouts. NO more Bailouts for Banks, Auto, Air, Rail, Shipping Industries! All are major Industries key to the economy, all are union industries, and unions have ruined America. Our elected dems need to Stop the bailouts. Automakers are bleeding cash, so its ok to bleed the taxpayer? enough is enough

    November 11, 2008 01:14 pm at 1:14 pm |
  5. Frann Altman in CA

    If we bail out the auto industry, and that industry has such a wide net with so many people who would be feeling the implosion, there needs to be contractual tradeoffs with the manufacturers. Hybrid/plug ins and eco-friendly cars to a standard by 2XXX plus conversion parts for existing autos to help with reducing a strict oil dependency.

    Handouts in general don't work well. They don't teach people how to sustain themselves. It's the contractual obligations that come with the funding such as education, reductions in emission to XXX in this case, or community service of some sort.

    "Give a man a fish, feed him for a day. Teach a man to fish, feed him for a life time (or woman)."

    Give a man a bailout, save him for a day. Give him a bailout and make it with stipulations, and he learns to be accountable (or woman).

    They needed to do this with the financial institutions. Bailouts only with stipulations. There needs to be lessons learned. This is parenting 101.

    November 11, 2008 01:14 pm at 1:14 pm |
  6. CJM

    The only thing that bothers me about bailing out the American auto companies is that If we do so, yeah we can keep workers there, but how long are they going to stay afloat if they still can't sell cars?

    November 11, 2008 01:14 pm at 1:14 pm |
  7. CLINTON

    John in Ohio YOU'RE RIGHT ABOUT THE AMERICAN AUTO INDUSTRY MAKING MORE AFFORDABLE FUEL-EFFICIENT CARS (SPECIALLY GM), ALL WHAT'S NEEDED SHOULD NOW BE CONSIDERED FOR JAPANESE PLUG-IN ELECTRIC TECHNOLOGY TO BE ADQUIRED BY AMERICAN CAR ENGINEERS, IF NOT THE AUTO INDUSTRY IS DESTINED TO A DECADENT DARK AGE

    November 11, 2008 01:14 pm at 1:14 pm |
  8. Penny

    My understanding is that they already had 25 billion on the table for the auto industry and that they are not asking for new money, they will use a portion of the 700 billion if needed, so no new funds are being requested.

    How can you say it's okay that over 200,000+ more people should be unemployed when their is an opportunity to keep them on payrolls. Where do you think their unemployment benifits come from – our taxes. If they have to extend those benifits for an additional 13 weeks, we would still be paying for them. Whereas we can keep these Americans dignity and it would cost us a lot less.

    Think about if it was you who was losing your job. We are our brothers and sisters keepers.

    November 11, 2008 01:15 pm at 1:15 pm |
  9. Devin from Carlisle

    Most of the reviews I have read are just complaints. GM and Ford are trying to make hybrids. Unions are what destroy domestic companies. Toyota and Honda do not need to lisen to unions. As for hybrids from honda, they are just as good as domestic hybrids. Please be more informed about automakers before you start running your mouth. O, and for those that don't know yet, look at the new electric ford f-150. That truck might tickle your fancy.

    November 11, 2008 01:15 pm at 1:15 pm |
  10. kevin

    Just hours after President Bush and President-elect Obama met in the Oval Office of the White House, details of their confidential conversation began leaking out to the press, igniting anger from the president, sources claim.

    "Senator Obama would be wise to keep close counsel," a top Bush source warned.

    "BUSH AND OBAMA AT ODDS OVER AID FOR AUTO INDUSTRY," splashed the NEW YORK TIMES in an exclusive Monday evening, quoting "people familiar with the discussion."

    The two met at the White House in private, without staff.

    November 11, 2008 01:15 pm at 1:15 pm |
  11. JC

    Jim in Minn is right. Palin is not fit to be VP. We need Joe Biden to bail out the auto industry and create that three-letter word: J-O-B-S.
    Just like FDR said in his 1929 televised presendital speech that I watched again last week down at Katies – never mind. We need to get Al Gore back to invent something like the internet to get the economy moving like he did in the 90's. But he's too busy curing the planets fever with a $2k a month electric bill to keep his pool warm.

    November 11, 2008 01:16 pm at 1:16 pm |
  12. Abby in CA

    Here we go, we are going to become a socialist nation under Barack Osama bin Biden. I'm so upset that the banks were bailed out with MY HARD earned money. Some people should go under....survival of the fittest.

    I'm sorry but if American Automakers are too greedy to make fuel efficient cars than they deserve to go out of business. It's GE's fault for not staying up with the technology. As far as I am concerned GE and all the other automakers should go out of business because they make an much inferior product to those autos coming from Japan.

    Since I work for a family business, is the government going to bail us out when we fail? Are they going to bail out every business that fails? According to their logic, some are worthy of bail out and others aren't. Well I have news for them NO ONE SHOULD HAVE BEEN BAILED OUT.

    November 11, 2008 01:17 pm at 1:17 pm |
  13. PJ

    so, why don't the oil companies with the records profits step in and work with the big 3?

    I hope GM can stay afloat until it produces the Chevy VOLT electric car. Let the American public decide to buy a more efficient, cleaner vehicle and Big Oil can look back at how they did nothing for the Big 3 in their darkest hour,,,,,when in fact, its the guzzlers Detroit decided to make which madeBig Oil so wealthy and now has come back to hurt them..... idiocy all 'round....

    November 11, 2008 01:17 pm at 1:17 pm |
  14. Albo58

    Cann the unions, then we can talk about a loan to the auto industry! This issue alone will prove that President-elect Obama isn't about real change because he's in the pocket of the union and he'll definitely tow their line!

    November 11, 2008 01:17 pm at 1:17 pm |
  15. kevin

    BUSH ANGER: OBAMA AIDES LEAK CHAT DETAILS

    November 11, 2008 01:17 pm at 1:17 pm |
  16. Rob R

    A direct bailout should not occur – but instead the government should provide low interest loans to the auto industry with the stipulation than the money is used in conjunction with Obama's energy initiatives in building cars that are highly fuel efficient and/or built with alternative fuels. No more Hummers and cars that get 8 miles to the gallon.

    This would be a win-win. The auto makers would start building cars that are competitive with Japanese models and they would play a big role in getting off foreign oil, plus millions of people could potentially keep their jobs.

    Letting the auto makers die is going to be more disasterous for the economy than giving them some sort of relief.

    November 11, 2008 01:18 pm at 1:18 pm |
  17. V. Clausewitz

    Union thuggery supported and encouraged by the Democrat Party and their liberal goons. This is just a repeat of what happened to US steel manufacturing decades ago. Rendered completely uncompetive as a result of socialist do-gooders, it eventually just went away.

    It's not going to be fun watching the rust belt extend it's way into the midwest; I feel sorry for the soon-to-be unemployed. But your reap what you sew, and this auto industry debacle is just another typical example of what happens when the left meddles in economics.

    November 11, 2008 01:18 pm at 1:18 pm |
  18. J J

    Bailout contingent upon reorganization including getting rid of the unions. The cost to manufacture with the union demands make for a vehicle price several thousand more than what it is worth.

    November 11, 2008 01:18 pm at 1:18 pm |
  19. AJ

    No matter the Bush administration says about there not being a Quid Pro Quo, it seems very clear that he is holding the U.S. automakers hostage until he, Bush, gets the free trade agreement for Colombia. Bottom line, Bush just continues to prove he was the WORST president in the history of this great nation and the faster he leaves the presidency and the Whitehouse the better for America. I hope that president-elect Obama can see through Georgie porgies’ scam and shoots down the Colombian free trade agreement and still rescues the automakers. That would be a coup and show the country that the president-elect means business and isn't playing the Washington games that got us in this mess in the first place. By the way, Georgie don't let the door hit you in the butt on the way out.

    November 11, 2008 01:19 pm at 1:19 pm |
  20. Denise

    No More Bailouts!!!! Let the companies figure out how they are going to make it. I work for a company that is laying off employees at the end of the year. Will probably include me in this layoff. I can guarantee that we are not making the salaries of the union workers for the big auto companies. Want to help your company.....take a cut in pay!!!! Guess Obama is going to help out his unions friends.

    November 11, 2008 01:19 pm at 1:19 pm |
  21. Ben

    Instead of a bailout for GM and Chrysler why not just let them go under. They could help new progressive projects like Tesla Motors, now that would be something. I would rather suffer for the next 70 days then accept the CAFTA idea. People need jobs, the problem will fix itself. That is what Obama will do, it's worth having a slim Christmas. We should only do trade with countries that have equal opportunity to ourselves. Coorporations that don't agree can take their business elsewhere. I try to only buy things that are made in the USA and have not shopped at Walmart for the last 7 years. We need to stop these coorporations from saying we don't have the education to perform the jobs. We need to stop the export/import exchange for countries that don't regulate human conditions and consider environmental impacts. Work USA and Buy USA only!

    November 11, 2008 01:19 pm at 1:19 pm |
  22. Pam Holt Los Angeles, CA

    If the auto industry had been making electric cars, they'd be having NO problems right now!

    WHY did our government have to kill th electric car??

    Not that I don't know the answer to that!

    BRING BACK THE ELECTRIC CAR!!

    It will save the Earth, along with saving these dirty corporations.

    November 11, 2008 01:19 pm at 1:19 pm |
  23. carolflowery

    stop the insanity

    November 11, 2008 01:20 pm at 1:20 pm |
  24. dj

    president elect. You need to put in place a job for the Clintons. If not for Clintons supporters you would not have made into the white house. That simple.

    November 11, 2008 01:20 pm at 1:20 pm |
  25. Nice

    Stick to your guns W, you can save that legacy!
    No one will remember that you had the worst approval rating ever. EVER!

    No one will remember the renditions, the lies to go to war, the incompetence.

    No one will recall how your cabinet endorsed the other party's candidate.

    No... it will all be about a trade deal with Columbia. Your belief in that is another sign of your greatness King George.

    November 11, 2008 01:20 pm at 1:20 pm |
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