[ad#post_ad]It wasn’t long ago that GM-Volt.com morphed into a blow by blow account of the downfall, bankruptcy , and resurrection of General Motors. After all by that point we had been following the Volt closely for over two years and it seemed if GM were to fail so too would the Volt go with it.
Then finally on that first day of June last year, GM announced it had emerged from bankruptcy and the new GM had begun.
Ten months later and all the major executive positions have been reshuffled, the government has been paid back its loans, and the Volt lies only five months from retail launch. And in a radio address Saturday, President Obama declared the process successful.
Although the US taxpayers had to bail out GM and Chrysler to the tune of $85 billion, Obama said “I knew this wasn’t a popular decision. But it was the right one.”
“The best estimates are that more than one million American workers could have lost their jobs, ” had the auto companies been allowed to fail said Obama.
“General Motors and Chrysler, two companies that for generations were a symbol of America’s manufacturing might, were on the brink of collapse,” he said. “The rapid dissolution of these companies — followed by the certain failure of many auto parts makers, car dealers and other smaller businesses — would have dealt a crippling blow to our already suffering economy.”
Though in the last days of the Bush administration $17 billion was extended to GM and Chrysler, it was just a band-aid, for when Obama took office “the situation remained dire,” he said. He said it was a difficult decision to provide further funding since in many ways the collapse was the fault of the automakers themselves.
“Many of the problems in the auto industry were a direct result of poor management decision over decades,” said Obama.
He noted that both GM and Chrysler had to undergo “painful” restructuring. “Many believed this was a fools errand,” said Obama. “That we would be throwing good money after bad.”
Now he says things are looking bright and optimistic. “The industry is recovering at a pace few thought possible,” he said. He noted that GM paid its government loans back with interest five years ahead of schedule, and that Chrysler has turned a profit this year.
Obama also said he believes the additional $50 billion in stock the government has bought from GM will soon be divested.
“It wont be too long before the stock the Treasury is holding in GM could be sold,” he said.
Obama said he never ran for office to get into the auto business and is happy it may soon be over.
“As essential as it was that we got in,” he said. “I’m glad to see that we’re getting out.”
I imagine he’s not the only one.
This entry was posted on Sunday, April 25th, 2010 at 7:25 am and is filed under Financial. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.