December 5th, 2008
03:34 PM ET
6 years ago

President-elect's team weighing auto industry option

Obama and his advisers are studying options to help the struggling automotive industry.
Obama and his advisers are studying options to help the struggling automotive industry.

(CNN) – President-elect Barack Obama has kept a relatively low profile as automakers plead for billions from Congress, but behind the scenes, the incoming administration is working hard on finding ways to ease the crisis.

Obama and his advisers are studying options for helping the automobile industry beyond what Congress does or doesn't do before he steps into office.

Talks in Congress have included mention of a possible short-term loan for the auto giants to act as a Band-Aid until lawmakers can hammer out a long-term plan when the new Congress begins next year. Other lawmakers have suggested that bankruptcy could be a good thing for the automakers.

CEOs for the Big Three are trying to make their case for a $34 billion loan.

Despite what may happen in the coming weeks, there's no indication that the problem will be solved before Obama steps into office. While the president-elect has largely stayed silent on the issue, he has signaled that one option is off the table.

"We can't allow the auto industry simply to vanish," he said last week.

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Filed under: Candidate Barack Obama • Congress • Nancy Pelosi
soundoff (85 Responses)
  1. HSNP

    The government threw hundreds of billions of dollars at the banking industry with no oversight and there's no end in sight to that mess.

    A 34 billion dollar bridge loan shouldn't be that big of a deal to save a couple of million jobs.

    December 5, 2008 04:50 pm at 4:50 pm |
  2. Raeford NC

    Obama and his cronies have no idea what to do. LOL the headline "Obama works quietly behind the scenes" cracks me up. How are you doing something quietly if what you are doing is being screamed from a headline? LOL.

    December 5, 2008 04:52 pm at 4:52 pm |
  3. Bush Be Gone!

    Please, allow the shrub to declare your suggestions are his, so, MAYBE he will institute them and get something done.

    Yeah, and Santa is leaving a Lexus with a bow in my driveway.

    December 5, 2008 04:52 pm at 4:52 pm |
  4. Nimi from NY

    I like when people do what they say they wiil do. President-elect Obama should help the autor industries. They are part of the American pride. They build army cars and help us remain competitive in the world. Americans like goods made abroad than patronize their own people. For people who love competition they've given up on their own.

    The banks don't produce as much as the autor makers but had easy access to the bail out money . Now the autor makers have to sweat so hard to get theirs. Does any one even care that every year we lose jobs to the rest of the world, we've lost our competitive edge and now we want the only remaining manufacturing companies we have to fail and people to lose their jobs. If this happens, no matter who is running for office the next time, will surely lose Michigan and Ohio. People ought to make a political statement on this issue the next four years.

    December 5, 2008 04:53 pm at 4:53 pm |
  5. Judith from Florida

    A Rep of Michigan said today that it wouldn't cost the taxpayers no extra money because they can use part of the money from the $700 billion that Wall Street got for emergency.The big 3 CEOs will honor a salary for $1.00 the first year while Wall Street had millions of walking money they went out with.Why not help them (big 3) because Paulson
    used his mind and fingers to hand out money of some of the failed banks that will never be again.If the big 3 are gone we will go into a Depression because just to make 1 car they get their parts all over the Country along with ones that bring everything in from pensils,paper food etc then you have to think about car dealers and their business through out the Country.Who will than pay for everyone being out of work?The foreign car dealers get tax credits for having plants here in the USA.Whose to say that once we make no more cars that these foreign companies take their work back home and then will cost us more than any of us can afford.If a war would break out where would we get the trucks etc etc for war.Would it be China or Japan or from the French or Germany.It's time we stand up for the American workers because we are making less here in the USA.Wake up America because the numbers of workers out of work will not end if the Big 3 fails.

    December 5, 2008 04:54 pm at 4:54 pm |
  6. Mark, B'ham., Al.

    Obama will bail out the Big 3 for the UAW who is as much to blame as management for the problems in the auto industry. The UAW Lobbyist are in Obama's ear telling him what to do as the rest of the unions as well as the enviromentalist lobby will be during this new administration.

    December 5, 2008 04:55 pm at 4:55 pm |
  7. johnrj08

    Probably, the most important part of any potential bail-out would be a clear and detailed explanation to the American people of how it will work and ensure that the Big 3 makes short AND long term fixes to their respective companies. Most of the people who are against a bail-out, don't really know what stands to be lost or gained without one, and they don't know what concessions the industry is willing to make in return for the $34 billion. If this country wants to be independent of foreign oil within the next 20 years, the automakers have start re-tooling right now, not in the next 5 or 10 years. Detroit needs to make cars that will be popular all over the world, not just in the United States. They won't be able to do that with low mileage gas-guzzlers that end up in the shop every six months.

    December 5, 2008 04:57 pm at 4:57 pm |
  8. Rachel

    Well, if the auto industry vanishes it's their own fault. We have so many foreign cars who would know the difference? They should throw all 3 of the CEO's in Jail for skimming off the top all this time and let someone else run the show that has some sense! The UAW can thank themselves for all this too.

    December 5, 2008 04:57 pm at 4:57 pm |
  9. Pat Green (CA)

    he's so cute. hahaha. He's going to do a great job, probably the best we've had in decades.

    December 5, 2008 04:58 pm at 4:58 pm |
  10. Dayahka

    Ah, go ahead and give them the money. After all, Paulson has bailed out his cronies in banking, so why shouldn't the Democrats bail out their cronies in Detroit? It would be good to have some accountability from Paulson, to find out who he bailed out and why, and it would also be good to find out how much stock Pelosi and pals have in Detroit, just to set the record straight. That this bailout will do no go and will simply be a stop gap measure is obvious. Maybe 34 billion will do it for the auto companies–and one wonders if this money is going to go to support sports, advertising, overtime, pensions, bonuses, executive vacations, and the like–but then what happens when the suppliers start saying they can't deliver the parts unless they're bailed out, and the distributors say they need a bailout to transport the parts, and the airlines want a handout to fly the parts into the country, and the shipping companies want a bailout so they can distribute the finished products, and the dealers want bailouts so they can store these useless goods on some parking lot–well, you get the picture.

    December 5, 2008 04:58 pm at 4:58 pm |
  11. Scott NYC Independent

    Thank God this man wanted this job when he could have made millions in almost any other industry.

    December 5, 2008 04:59 pm at 4:59 pm |
  12. Butch Dillon

    Funding the auto makers out of the hole into which they've dug themselves is a big mistake. The amount of money it will take to save this industry will smack of protectionism to the Japanese and defeat the purpose of free markets. It will be a fate worse than the collapse of the US auto industry if, in reaction, the Japanese retreat from this marketplace because unfair competition stifles their profitability. If Toyota and Honda disappear from this segment of their multinational marketplace, a lot of non union workers will be left out in the cold, a place justifiably reserved for GM and the UAW.

    December 5, 2008 05:00 pm at 5:00 pm |
  13. J.C.

    I agree that we shouldn't allow our auto industry to just vanish. If we are to bail it out, we must have control or ownership in its operation. Big failing companies unfortunately have to be nationalized till it can stand up on its own and taxpayers receive their investment returns. The big three had too many unproductive years. We shouldn't allow them to repeat the same mistake one more time.

    December 5, 2008 05:03 pm at 5:03 pm |
  14. Brian - Trinidad

    CNN is always telling us that Obama is always weighing stuff and to expect the wise solution shortly,except we never get the solution. Isn't it about time CNN stop serving Obama's interests and serve the public interest?When are you going to call Obama out on his phony promises for the future?

    December 5, 2008 05:07 pm at 5:07 pm |
  15. be blessed

    they need to go bankrupt and leave the taxpayers alone, we never got breaks when they over charged us all these years, why in the world should we bail them out. we can't even buy their cars, how can we pay them billions of dollars when our familes are going without their basic needs. NO BAILOUT.

    December 5, 2008 05:07 pm at 5:07 pm |
  16. Jaye

    As of right now he is president-elect – he has no job.
    There is nothing he can do until he is sworn in, so, stop calling for him to do something.
    Sheesh!

    December 5, 2008 05:11 pm at 5:11 pm |
  17. Merry

    Let them go bankrupt! They will be okay, workers are going to be let go either way..

    December 5, 2008 05:19 pm at 5:19 pm |
  18. Ms. B in California

    I certainly agree with Proudliberal, I thought we lived in a Capitolistic society. We have to treat these Carmakers like a baby learning to walk, they are going to have to fall in order to get back up.

    December 5, 2008 05:20 pm at 5:20 pm |
  19. susie

    The union gave billions of dollars to Obama's election, he can't throw them under the bus.

    December 5, 2008 05:20 pm at 5:20 pm |
  20. beckster

    WHO IS JOHN GALT?

    December 5, 2008 05:22 pm at 5:22 pm |
  21. No Incumbents 2010

    proudliberal- capitalism sucks when it is infected by government involvement!

    December 5, 2008 05:26 pm at 5:26 pm |
  22. David in Dallas

    Obama said, We can't allow the auto industry simply to vanish.

    Agreed. It would badly damage the economy to double the unemployment rate in the next few months, and that would do it.

    Columbia University professor Jeffrey Sachs said, We're in the steepest descent we've been in in modern times. The American people need to understand this isn't a favor for the industry. This is to brake a collapse of our economy.

    Agreed again.

    I disagree with a bailout: it wouldn't fix the problems that got us here.

    I disagree with bankruptcy: the loans needed to survive the Chapter 11 process are unlikely, and consumers don't want to buy cars from bankrupt companies for fear that their warranties will be meaningless if the company later collapses.

    The solution: the gov't should send the Big 3 to Chapter 11 so they can restructure and become competitive again, but only after guaranteeing the loans required to survive the process and promising to underwrite warranties for companies that do fail.

    That would reduce the taxpayer burden and provide a safety net for these companies to undergo the process needed to become competitive again. ;)

    December 5, 2008 05:30 pm at 5:30 pm |
  23. H

    BARACK OBAMA MUST COME THREW FOR THE AUTO MAKERS. THEY TOOK FROM HILLARY TO GIVE OBAMA A WIN.

    December 5, 2008 05:32 pm at 5:32 pm |
  24. w.l. jones

    Some people underestimate American spirit nobody going hunger in this country so what a few billion for the Auto.companies it only a drop in the bucket in our over all economy.

    December 5, 2008 05:40 pm at 5:40 pm |
  25. Libs be dopes

    Let's see..............

    We can save the jobs, unions, and workers so they can build expensive cars that won't sell...........

    Brilliant!

    December 5, 2008 05:45 pm at 5:45 pm |
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