December 19th, 2008
11:31 AM ET
14 years ago

Obama issues statement on the auto bailout

[cnn-photo-caption image= caption="President-elect Obama scolds the Big Three automakers in a statement Friday."](CNN) - President-elect Barack Obama praised the $13.4 billion auto industry bailout plan Friday — but called for major changes from the Big Three automakers.

"Today's actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers,” Obama said in a statement released by his transition team. “With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together - including labor, dealers, creditors and suppliers - to make the hard choices necessary to achieve long-term viability.

“The auto companies must not squander this chance to reform bad management practices and begin the long-term restructuring that is absolutely required to save this critical industry and the millions of American jobs that depend on it."

President Bush announced the bailout plan Friday morning. The money will come from the $700 billion set aside for the financial industry bailout in October.

soundoff (46 Responses)
  1. GB

    MK ..... I will take a guess you did not vote correct ????? and you are living in a nightmare world.

    December 19, 2008 02:38 pm at 2:38 pm |
  2. where's my bailout

    where's my bailout??

    My company laid off 50% of its workers and stopped paying the rest of us. I went 8 weeks without pay before I quit. (note, they didn't lay us off and we couldnt get unemployment because those of us who left, quit).

    Now I look at the autoworkers who get PAID during a monthlong "shutdown". !?!?!? What a bunch of whiners. One article said they would only get about 90-95% of their normal pay while on the shutdown....

    OH, how my heart bleeds for them.
    Wake up and see what the rest of America sees....we don't get bailouts...we have to suck it up and get on with getting on. we dont get bailouts, and we dont get our "contracts bought out".

    THE UAW is a bunch of whiners.

    December 19, 2008 02:44 pm at 2:44 pm |
  3. Ghost

    Wow, I know that unions have a hand in this, but please no more talk of the market regulating anything. Fact is that the average wage here is no longer enough to do much of anything with. Inflation has risen and wages haven't kept pace. Anyone here old enough to remember cost of living increases? Thing of the past.

    Many of these companies enjoyed a rather "free" period when spending was up and everyone was making money......except the little guy. His jobs were downsizing, moving overseas or being taken at half the salary by undocumented workers. All done in attempts to keep profits high at the expense guessed it, the little guy.

    Here's something that someone else mentioned that is worth repeating. If a company makes a product and no one is able to buy it, does it make a sound? Unchecked capitalism haas all but ensured that the rich get richer. Problem is that soon they will have to buy their own services to keep up.

    December 19, 2008 02:54 pm at 2:54 pm |
  4. Andy

    Glenda, Don't let your head spin, can't you see the old president is being held hostage by the unions and the new president is for stronger unions. Same difference, same result.

    December 19, 2008 03:01 pm at 3:01 pm |
  5. Derrick

    I am not a Union Worker. I pay taxes like everyone else. I however, do have a major problem with anyone telling any person that they make too much money for the work they do, did, or will do; who the h**l are you to decide who should get what wage? When I apply for a position and I'm at the salary negotiation stage, that is between me and my employer, not Fred and Wilma! What should be addressed is why people who are otherwise creditworthy are not able to get a loan from these criminal banks because the banks are scared to lend out the free money they just received from this hard working taxpayer! Their should be a 10 day timeline on these banks to began the flow of money and credit again or they should be nationalized so we can cut out the middle-man and get back on our road to prosperity. Fix your ratings over the Holiday period banks or I, and hopefully everyone reading this, will make a consistent, vocal/cyber/in person cry for your heads!

    December 19, 2008 03:05 pm at 3:05 pm |
  6. Give me a break!

    Ummm...time to bailout the teachers of America as well. We're trying to educate the leaders of tomorrow and are almost at the poverty level. Parents get what you pay for!!

    December 19, 2008 03:06 pm at 3:06 pm |
  7. javafreik

    facts are facts: American workers standards brought DOWN ?? Please!...we need to be more competitive, and give better quailty for the price that's charged. If this had been done LONG ago, we might not be in this mess. American car's don't make it to 100K miles – while Honda and Toyota far exceed their payoff dates – and hold their value.

    Wake up – we've been living in a bubble for far too long – and it just busted. Reality sucks.

    December 19, 2008 03:33 pm at 3:33 pm |
  8. RinFL

    MK Spend much time listening to AM echo chamber talk radio?
    You sure talk the Hate.................So much for peace on earth and good will to man......................I'll bet your a "good Christian" to!!

    December 19, 2008 03:36 pm at 3:36 pm |






    December 19, 2008 03:36 pm at 3:36 pm |
  10. BO is just B.O.

    I hope this is not what we should expect from Obama going forward.

    Total lack of insight into the long range issue. Just like Clinton with Fannie Mae and the long term effects that had in crashing our banking system. Obama is showing that same lack of understanding.

    December 19, 2008 03:37 pm at 3:37 pm |
  11. Richard Larson

    While poor product management had a part in the decline of GM, Ford, and Chrysler, it was not the primary cause of their difficulties. It has always been the lack of available short term credit that all large corporations use for daily operations.

    Let's face it, they have built the cars and trucks we, as consumers, have demanded they build. They have only done what all manufacturers do, respond to the buying public.

    Virtually none of the vehicles produced, and sold, by the European manufacturers meets the current CAFE mpg standards, yet many of the domestic vehicles do. The Japanese and Korean cars do meet the standards generally, but they are all over priced.

    Mandating additional pollution standards, when the effectiveness of current devices is not only inefficient economically, it is plain stupid. The economy cannot pull itself out of the hole the Bush administration has dug for us, piling additional, ineffective costs to the mix is pure nonsense.

    December 19, 2008 03:38 pm at 3:38 pm |
  12. S@ndr@, Oregon

    This is ridiculous, with all the layoffs throughout the US why do we single out these overpaid union workers with better benefits than most? What about the 47 billion uninsured people of the US who are working for only hourly wages, do they want to see their tax dollars going to those who are already better off than they are? I wouldn't have agreed to a bailout (rather "giveaway") until their union agreed to a pay cut equal to Honda and Toyota and

    December 19, 2008 03:45 pm at 3:45 pm |
  13. Richard Larson

    I just read a couple of comments above that need responding to. Yes, the workers in european and japanese manufacturers get less than UAW workers get. They have been bought, and paid for with the state taxes of the people who live in Alabama, Georgia, and Tennessee get. What their senators didn't say was that virtually all the japanese manufacturers intend to lower the wage packages offered to their employees next year. They have no union to fight for them so it is going to happen. Second, Virtually all european and japanese manufacturers are in trouble, but they have government subsidies to rely upon. They have always been subsidized by their governments. This is one of the reasons why the japanese have the most effective electric storage battery technology completely sewn up with patent protection. The only way american manufacturers can use it is to pay for each vehicle that uses any form of that technology. The U.S. Congress is ignoring all of these facts in their ideological union busting attempts.

    December 19, 2008 03:51 pm at 3:51 pm |
  14. Cori from Colorado

    For all the bloggers blaming Obama, it's not his fault. He's not the one who bankrupted the auto industry, and he's not the one bailing them out either. Bush is our president, remember?

    And by the way, just because the Big 3 are going to get their bailout doesn't mean they won't crumble. They are ony delaying the inevitable! They're going to fail whether they want to accept it or not. Where does that leave the future of the American's taxpayers...well, it will mean that they will have to pay back their debt. When they fail, do you think they are going to pay back these loans? I think not. when you don't have money, then you just don't have the money, and that's exactly what's going to happen.

    December 19, 2008 03:52 pm at 3:52 pm |
  15. sg

    Obama is a union supporter. An ealier article on CNN's website stated the Obama wants to make unionizing much easier. Great!! that's just what America needs. More companies will ship manufacturing out of this country. I don't support unions – They're killing this country.

    December 19, 2008 03:56 pm at 3:56 pm |
  16. G.R.I.T.S. - Girl Raised in the South

    Okay – first, it is not a bailout, it is a loan. A loan that must be repaid. Unlike the money just handed out willy-nilly to the banking sector. Second, I am glad to know where at least a portion of the $700 billion is going, since there has been little accountability for the spending of billions on Wall Street.

    Third, unions are not bad. There is absolutely nothing wrong with joining together to bargain with an employer for better pay, better working conditions, better safety regulations, better benefits, etc. For companies that ship their jobs overseas, the best thing for us, as a nation of workers, to do, is refuse to buy products made by American companies overseas. It is difficult, sometimes, and a little more expensive sometimes, but it makes me feel as if I am doing something to benefit my countrymen. Not to mention, many products manufactured overseas are outright dangerous.

    December 19, 2008 04:17 pm at 4:17 pm |
  17. al in memphis

    @ David

    With your comments about non-educated, illiterate workers in the south - man you must be under some type of spell. I hope you find a gift under your Christmas tree for ignorance and irrational thinking.

    Until then, please stay away from sharp objects.

    December 19, 2008 04:29 pm at 4:29 pm |
  18. Paul

    While their intentions are admirable, unions are an inefficient use of resources. There's no accountability, low productivity and no long term sustainability. If they want to form a union based on the Japanese business model, then be my guest; but this shameless exploitation of the Big 3's cost structure must stop if they plan to maintain an economically viable business model in the 21st Century.

    December 19, 2008 04:31 pm at 4:31 pm |
  19. Lauren

    Ok, lets put this high dollar Union thing to another perspective.

    I work near a GM plant. Not at it, but near it. I work at a place where I talk to a lot of these UAW people who work the the GM plant.

    Here is my problem. I work hard, I am blue collar, I sweat, have a sore back and too many bosses. But I do my job, I actually enjoy it, for a decent wage. 16.00 an hour, plus benefits and retirement.

    Now, I talk to some of the GM workers, who stand on a line and put little screws into a dashboard, or attach plastic bumpers onto a car.
    They get over 25.00 an hour, plus benefits, and retirement. They have no more or no less education or skill than I do. But they have the UAW, who has bargained themselves right into trouble.
    They also have a " pool " of workers at this plant. 40 people who show up EVERY day, in case a person ont he line calls off. If nobody calls off, they sit in the lunchroom and play cards,,,, for over 20 dollars an hour !!!!!!!!!!!!

    I hear talk and see comments about why cant other companies pay what the UAW workers get at GM. Why? Simple, it will make them go bankrupt. Labor cost are WAY to high for the automakers.

    I say let them go bankrupt, Northwest airlines did, and they are still going.

    December 19, 2008 04:35 pm at 4:35 pm |
  20. al in memphis

    @ facts are facts

    For any business to be successful, wages and compensation has to match the revenue the company generate - not how much debt they can afford. If the company generated the revenue to pay workers $500/hr, good - if the company only generated revenue to pay workers $25/hr - that business.

    December 19, 2008 04:36 pm at 4:36 pm |


    Maybe you need to turn to God cause you sound like a bitter person. Oboma do not need to suck up to the auto workers. God is going to lead him in the right direction, the same way that he helped him become the next president of the United States. You should be praying for our next president to do well. What did you benefit from Bush?

    December 19, 2008 04:39 pm at 4:39 pm |
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