Obama – I want to do to every industry what I did to the auto industry
posted at 12:04 pm on August 10, 2012 by Steve Eggleston
If Ed weren’t recovering from back surgery, I’m positive this would have been today’s Obamateurism of the Day. I have to credit Ace for digging up this little gem from a speech President Obama in Pueblo, Colorado yesterday:
We’ve got a bunch of examples of the differences, the choice in this election. When the American auto industry was on the brink of collapse, more than 1 million jobs at stake, Governor Romney said, let’s “let Detroit go bankrupt.”
I said I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back and GM is number one again. So now I want to do the same thing with manufacturing jobs not just in the auto industry, but in every industry. I don’t want those jobs taking root in places like China. I want them taking root in places like Pueblo.
Let’s review what, exactly, Obama (and to be fair, President Bush as a lame duck and enabler) did to the auto industry:
- Expended $43.2 billion (not including a $6.7 billion “flash money” “loan” from otherwise unused DIP financing used to create a credit-worthy Government Motors out of whole cloth) to seize control of the largest auto maker, General Motors. Of that $43.2 billion, only $16.8 billion has made its way back to the Treasury, with another $10.3 billion in stock the government still holds in GM (as of the close of the markets yesterday). That puts the projected loss on the GM deal at $16.1 billion, while the UAW VEBA (retiree health-care fund) has already recovered more than what it was owed pre-bankruptcy and stands to get close to $30 billion on the $20.6 billion it was owed before all is said and done.
- Expended $12.8 billion to seize the third-largest auto maker, Chrysler, hand initial majority control to the UAW, and facilitate the transfer of ultimate control to a foreign entity, Fiat. Of that $12.8 billion, $8.2 billion was ultimately recovered from former owner Cerebus and Fiat, putting the final loss at $4.6 billion.
What, exactly, did we get for that $30 billion, besides a government-run company whose recent success is due more to its controlling owner upping its fleet purchases than anything else and an Italian-union collaboration? Did you think it would be an increase in jobs? You would be mistaken if you thought that.
The Quarterly Census of Employment and Wages, widely considered the most-accurate measure of jobs as it is a census that includes every job provided by a private employer subject to the unemployment tax, has as one of its industry subgroups “automobile and light truck manufacturing” (NAICS 33661 in bureaucrat-speak). In December 2007, when the “Great Recession” started (at least according to the economists charged by the government with defining recessions), there were 187,219 people employed in the industry. In December 2008, when Bush decided to bail out GM and Chrysler, employment dropped to 155,504. In December 2009, after Obama turned them into Government Motors and UAW Motors, employment dropped to 131,525. There was little change in December 2010, but employment did bottom out at 131,020. There was a bit of a recovery by December 2011 (the last month QCEW data is currently available) as employment rose to 142,532.
To recap – we spent $20-30 billion (depending on whether one thinks we’ll get even $20.65 per share once/if Treasury decides to let GM go), sold the smallest of the Big Three to the Italians, and, 3 years after the bailout started and 2 1/2 years after the economy “recovered”, had 13,000 fewer people employed in the automotive industry. I’ll let Jim Hanson have the last word on the Crony
Capitalist Socialist in Chief: