It's hard to believe, as we come into the last 90 days or so of the presidential election, that the rescue of General Motors and Chrysler, and most of the rest of the U.S.-based auto industry, is still being debated three years after the fact.
And what astonishes me about the debate is that I hear almost nothing about national pride in the rhetoric.
The cynics and those who opposed the rescue, including GOP nominees and former Michigan Governor Mitt Romney, believe the White House directed rescue was done solely to protect the health care benefits of the United Auto Workers union at the expense of bond holders, including some pension funds.
I covered the process for BusinessWeek during 2008 and 2009 -- sometimes it seems by the hour -- talking to virtually everyone involved in the process -- auto execs, union leaders, congressmen, senators, White House officials, lawyers, bond holders. And while I do think protecting the health care benefits owed the union was a bit of the calculus, it was by no means the big reason for the move to save an iconic, vital industry, an effort that started under the Bush administration.
The latest absurdity in this debate was uttered this week by Indiana Senate candidate, Richard Mourdock, a Tea Party candidate who has compared the rescue of Chrysler specifically to... wait for it... 19th century slavery.
Mourdock, the Indiana state treasurer, tortured historical metaphor by putting President Obama and Democrats in the role of slave owners. Lincoln's argument against slavery, Mourdock attempted to quote, was that it was akin to the unjustness of the "divine right of kings... that would give power to someone so that they might say to someone else, 'you work, you sweat, you toil, you earn bread -- and I shall eat it.'" The Tea Partier was arguing that it was wrong for the pension funds to lose part of their investment so that the UAW could protect their health benefits.
It's a complicated issue. But one of the ironies and hypocrisies at work here is that Mourdock is also one of the crowd that rails against the Affordable Care Act and anything that smells like universal health care. If I had the power to choose between a pension fund taking a loss on an investment that they could surely make up with other investments in their portfolio and an entire union being left to the whims of the private health insurance industry, I know what I would choose 100 times out of 100.
GOP nominee Romney and his crew are still telling tales, as they hope to win Ohio and Michigan, that the government actually followed the Romney plan for fixing the auto industry that today is earning billions of dollars and hiring. That, of course, is nonsense. The Romney plan was to let private equity pick over the bones of the companies, which would have resulted in workers and retirees losing health care and thousands upon thousands of jobs going either offshore or to other states at a fraction of today's salaries.
Remarkably, the Romney campaign has also released this week an ad attacking the White House rescue of the auto industry by spotlighting an Ohio car dealer that was closed in bailout. That dealer was part of a consolidation of dealerships that was undertaken to weed out under-performing or redundant dealers GM had in many markets. Another utterly crazy distortion of the auto industry rescue. But when you don't have facts working for you, as we have learned, you can just make stuff up and hope the public swallows it.
But the larger point is that a big part of the calculus by the Obama White House in rescuing the U.S.-based auto industry was not only the one-million plus jobs it saved at the time, but the thousands of additional jobs the move has been adding to the economy, and the more transcendent notion that to explode the U.S. auto industry represented by GM and Ford, plus the Chrysler unit of Fiat would be an insurmountable and irreversible blow to the U.S.'s standing in the world.
It is interesting to hear mostly GOP lawmakers talk about the hundreds of billions that need to be spent in Iraq and Afghanistan, and potentially Syria, in the name of maintaining our leadership in the world. But a final bill of maybe $25-$35 billion depending on how you slice the numbers was too much to maintain what is arguably the country's most important industry, and more than a million good paying jobs and benefits. It boggles the mind.
It's worth mentioning that our allies and economic rivals -- Germany, Japan, U.K. -- would have thought the U.S. was daft beyond all reason to let the financial calamity of 2008 fracture our auto industry with the pieces blowing away with the wind. They would have thought we were nuts. In fact, Toyota, Nissan and BMW executives told me that the U.S. was correct to take the actions they did.
The latest numbers are in. GM's North American business is rocking and improving all the time. Ditto for Ford and Chrysler. More than 20,000 direct jobs have been added to GM, Ford, Chrysler and suppliers in the last three years, and even more indirect jobs. The last chapter in the rescue is the U.S. selling off its 26 percent stake in GM, a move I expect will take place next year no matter who is president.
Romney and Tea Partiers are standing on some kind of principle that any industry, any company should stand or fall in the marketplace without help from the government. That, of course, is a red herring. We know that countless businesses and companies benefit from government tax credits, low-interest loans, government contracts and government paid-for infrastructure projects. Oil companies get some $5 billion a year in subsidies, and they don't even need it. But the same GOP members of Congress who opposed the rescue refuse to dent the oil company givebacks. Go figure.
If someone wants to argue against the rescue of the auto industry with actual information, then I'm all ears. But Romney and Mourdock continue to stand on false history and hypocrisy that makes me nuts and is meant to appeal only to those who have already made up their minds about voting against President Obama and who are too incurious to finds their own facts.
While the Richard Mourdocks of the world play the crazy cards, and carry the crazy "Keep the government out of my Medicare" placards that don't make any sense, maybe we could take a minute to remember a few things: that we still have an in-tact U.S. auto industry that is hiring, creating and maintaining some of the best quality jobs in the country.
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