Dearborn Dem activist Fred Hoffman is in Charlotte, NC, preparing to serve as an Obama delegate at the DNC. He is passionate about the President because of the auto rescue, as he describes here.
The Labor Day weekend gives us a great opportunity to focus on the state of our local economy and what might have been but-for the gutsy decision-making of President Obama and his team in their first few weeks in office. I am absolutely convinced that the environment around here would be very different today had not the President stood up for Detroit, our companies and our workers. . . .Remember how tough it was in late 2008? All of the auto companies were bleeding cash, GM and Chrysler were facing huge credit deadlines, thousands of employees (including this writer) took buyouts and layoffs, Congress (led by anti-union Republicans from the south) voted down assistance, and auto sales were tanking because of the credit market freeze. - -- TO ADDRESS THAT MESS, PRESIDENT OBAMA assembled a first-class team that acted quickly, creatively and decisively to implement a plan that truly saved the domestic auto industry. I know, because I was there. After I retired from Chrysler, I took the post as Governor Granholm's auto rescue coordinator, so I had a front-row seat as the masterful rescue plan unfolded. - - - I saw the managed bankruptcies that allowed GM and Chrysler to restructure using federal funds because no other funds were available. . . . I saw a new and re-energized auto industry SAVE 1.1 MILLION JOBS, and even more significantly, saw 165,000 new jobs added with another 150,000 new jobs projected in the next four years. . . . I saw the industry invest $30 BILLION in new plants and facilities to ensure a competitive future, and I worked with the OEMs to keep plants open in Sterling Heights and Orion Township that would otherwise be shuttered. . . .And I am watching carefully as domestic sales and market share are expanding, new, more fuel efficient models are coming to market and the companies are spending some $18 billion a year on R&D. - - - Yes, the taxpayers invested some $12 billion in Chrysler (which has been repayed) and $50 billion in GM (loans and some equity repayed). Ford was also bleeding cash, but had just taken out a huge mortgage, so it didn't need a TARP rescue; it did take a $5.9 billion plant improvement loan which enabled investments at Wayne and other plants. . . .And Yes, some of the money will not be repaid, mostly related to the captive finance companies and stock sales still dependent on GM values. The latest Treasury study shows, all-in, the TARP loss on the auto rescue could be as high as $25 billion. . . . .BUT THAT NUMBER pales by comparison of what could have been with a domestic auto collapse. One study pegged it at $25.8 billion a year. Then, when you consider the economic impact of keeping a strong US auto industry - IT IS A NO-BRAINER. The industry employs 1.7 million Americans directly and 8 million indirectly, it represents more than 3% of the economy and breathes life into our manufacturing, technology and service sectors, its employees earn $500 billion a year and pay $70 billion in taxes. Here in Michigan, there are 1.2 million auto-related jobs, 21.6% of the total state employment. . . . And considering auto-related taxes ($43 billion federal and $91.5 billion state), the auto companies are cash cows we cannot afford to kill; the Return on Investment (ROI) for the Obama auto rescue would even pass the Bain test!. . . . Yes, this would be a VERY DIFFERENT PLACE if our government didn't lend a hand. But this domestic auto rescue did not happen by wishes, words or chance. It happened because President Obama made it happen. It happened because of his determination and his skill. His heart and his head were in the right place. - - - IF FOR NO OTHER REASON, he merits our gratitude and our support. The next time you drive by Ford WHQ or the Rouge Plant, the Ren Cen or the Chrysler Jeep Plant, tip your head and say "thank you Mister President - we'll remember in November." (Data from Center for Automotive Research)
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