The Role Autos Are Playing In Deciding Our Next President



He was elected to the U.S. Senate in 1942 and served a dozen years during which his most memorable act was introducing the bill that added the words, "under God" into the Pledge of Allegiance. But to both his friends and foes alike, Homer S. Ferguson had a more important agenda that earned him the sobriquet "the Senator from General Motors."

As the recent Supreme Court decision commonly referred to as "Citizens United" only underscored, money has always played a part in politics. And for much of the 20th Century, few had the sort of money to invest in influencing government like the auto industry, especially giant GM.

But something curious has happened in the world of horsepower politics over the last few years. General Motors, in particular, has become as much a topic of debate as the force influencing the discussion. And where you stand on the subject could very well influence how you vote in this November's presidential election.


Paul EisensteinPaul A. Eisenstein is Publisher of TheDetroitBureau.com and a 30-year veteran of the automotive beat. His editorials bring his unique perspective and deep understanding of the auto world to Autoblog readers on a regular basis.



The 2009 auto industry bailout, at $85 billion, was relatively modest compared to the money thrown at the collapsing banking industry, but has nonetheless become a hot-button issue as the White House campaign heads into its final two months. While there was nary a mention of the TARP loans to financial giants like CitiCorp and Bank of America during the recent political conventions it seemed like barely a speaker could go by without mentioning the auto bailout.

"The entire auto industry, and the lives of over one million hard-working Americans, teetered on the edge of collapse, and with it, the whole manufacturing sector. We looked everywhere for help," declared Jennifer Granholm during the final day of this week's Democratic convention.

Governor of Michigan during the bankruptcy of GM and Chrysler, Granholm's voice rose to a shout as she proclaimed that, "Almost nobody had the guts to help us - not the banks, not the private investors and not Bain Capital. Then, in 2009, the cavalry arrived: our new president, Barack Obama."



The message, of course, was quite different the week before, when the Republicans took to the stage in Tampa to officially name Mitt Romney their presidential nominee. Despite – or perhaps because – of his long ties to Michigan, where his father once ran tiny American Motors, the GOP nominee has consistently opposed the bailout.

He wrote a series of op-ed pieces, including one in The New York Times, in 2008 opposing the use of government money, and during the long primary slog, this past year, forcefully repeated his position. During one appearance near Chrysler headquarters, Romney asserted that the multi-billion-dollar rescues for Chrysler and General Motors "wasted billions of dollars initially," insisting, "It was the wrong way to go. I said from the very beginning they should go through a managed bankruptcy process."

Neutral observers – and there are a few – find an irony to the debate, not only because the bigger TARP loans have largely been ignored during the campaign but also because the bailout process actually was begun by President Barack Obama's predecessor, Republican George W. Bush. But the outgoing Commander-in-Chief authorized only enough money to forestall the GM and Chrysler bankruptcies, passing the final move to the new president.

Further politicizing the rescue was the attempt by GM and Chrysler to dump thousands of dealers as they emerged from the bankruptcy process.



In the weeks ahead, virtually every bit of economic news is likely to play out far more loudly than might be typical when the presidency isn't at stake. And perhaps no story will get more play than the third-quarter earnings report General Motors has now scheduled for October 31, less than a week before the election. Could this prove to be the sort of October Surprise that has sank or resurrected so many presidential bids in the past?

A strong report could add currency to Obama's claims to have rescued the auto industry and saved countless jobs. Weak numbers would certainly buoy the Romney bid, adding ammunition to those who felt the bailout was nothing but a sweetheart deal that went against fundamental American principles and wasted taxpayer dollars.

Part of the irony is that GM has traditional been counted in the Republican court – though its lobbyists have usually been carefully to parse campaign cash out to both sides of the aisle – and the maker's CEO Dan Akerson has a long history with the GOP, including a role as a major fundraiser for George W. Bush.

But, as the old adage goes, politics makes for strange bedfellows, and at no time has it been more apparent than during the 2012 presidential campaign. Who knows what the late Senator Ferguson might have done.


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  • 95 Comments
      Dark Gnat
      • 2 Years Ago
      I thought it was funny when Romney tried to take credit for the auto bailouts that he opposed because it was working.
      Brodz
      • 2 Years Ago
      Many Americans don't appreciate how great it is to have such a large auto industry like theirs.
      Dark Gnat
      • 2 Years Ago
      "Politicians are like diapers. They need to be changed often and for the same reason." -Mark Twain
        Yo Hinck
        • 2 Years Ago
        @Dark Gnat
        Yes they do, but some not as quickly as others. 4 MORE YEARS!!!!
      cpmanx
      • 2 Years Ago
      Paul Eisenstein's analysis gets things exactly backwards. He writes: "Where you stand on the subject could very well influence how you vote in this November's presidential election." But almost every post and every article I've read on the topic makes it clear that, in fact, how you plan to vote in November almost perfectly predicts where you stand on the subject. This issue is not going to change anyone's mind--people have already decided how they feel about federal assistance to the auto industry, pro or con.
      John
      • 2 Years Ago
      Just as a counter to the author's contention that it's ironic that less discussion has focused on the large loans made to financial giants like BOA and Citi, the Wall St. Journal reported yesterday that of the $245 billion that went to large financial institutions, $264.7 billion has already been recovered. which implies that the government has actually already made an 8% return (and counting, as there are a few loans still outstanding) on those bailouts. Thus, it makes sense focus on the GM bailout as the government is poised to take a ~$20-30 billion (depending on who you ask) loss on those funds, versus a, not mind blowing, but respectable return on the bank bailouts. That the debate has focused on GM actually makes a lot of sense when considered in that context.
      Justin Campanale
      • 2 Years Ago
      When it comes to the auto industry, I think Obama is the clear winner among the candidates. Romney is just too much of a liar and a hypocrite. He famously wrote an essay called "Let Detroit Go Brankrupt", but now, he is taking credit for the auto industry recovery.
        Pinhead
        • 2 Years Ago
        @Justin Campanale
        I agree with you, but you're going to get like 100 thumbs down from the Obama-hatin' crowd.
          Jason Krumvieda
          • 2 Years Ago
          @Pinhead
          Justin doesn't have to worry, the Obama lovers way out number the haters. The lovers are good at calling names but not giving facts. I got a few numbers that are facts. 8.1%, 16T, 1.1T/year. If you know what these numbers mean then you should not be voting for Obama.
      • 2 Years Ago
      [blocked]
        Kyle K Hemi Santos
        • 2 Years Ago
        A bit of knowledge old car co owes that 1.5 billion this is the remains of Chrysler LLC the assets not forwarded to Chrysler Group LLC. That being said Chrysler Group LLC the current entity does not owe that money, they left that liability behind in old car co. Remember you pushed for bankruptcy and part of that is not all debt will be paid back. Plus Chrysler Group LLC paid a large amount of interest (rightfully), while I don't believe it totaled 1.5 billion it was between 800 to 900 million in a statement. So with that in account and your misunderstanding of bankruptcy Chrysler would owe less then 1.5 billion but then again they don't so your point is invalid.
        Yo Hinck
        • 2 Years Ago
        Try reading for yourself instead of repeating Romney's BS. The problem with GM began during Bush's first term and had continually gotten worse over the following Bush years along with the rest of the Economy...what did Bush do to resolve the continuing economical meltdown? Nothing to put it in a nutshell. He started the bailout of the major banks and threw 17.4 billion at the BIG3 without stipulations, giving them just enough room to last until he left office. That's why you and the Romney/ Ryan idiot's like to put the blame on Obama's shoulders. Romney was a Republican for years so why didn't he try to do something about the economy before this...because just like the rest of the Republicans in the senate and legislation there only goal was to prevent Obama from getting reelected , not fixing the problem that occurred during the Bush years.
        • 2 Years Ago
        [blocked]
          MAX
          • 2 Years Ago
          One sock puppet lies and the other swears to it!!!! What would our socialist trade partners give to have a contender for world's largest car makers? Hyundai=posterchild for government bailouts but SonataDude doesn't even know it!!
        ragtopdodge
        • 2 Years Ago
        What a load of sh*t. First, Romney was all for Chapter 7 liquidation bankruptcy b/c there were NO CREDITORS except the US gov't to give GM a loan. Show me PROOF that Chrysler has not paid all of its loans! The US made billions in interest off of Chrysler. Also, you guys who are against the bailout, show me the billions in lost tax revenue from >1.1 million jobs being lost at least!
          1454
          • 2 Years Ago
          @ragtopdodge
          Did you ever think maybe there was a reason for that? Given the rate they were burning cash, I wouldn't have given them money either. Second, I would love for you to prove that "1.1 million jobs lost" statement. Third, I'm sure those number are/were counting parts SUPPLIERS THAT WEREN"T GOING TO GO UNDER WITHOUT GM. Because they had contracts with other companies. IE, Ford, Nissan, MB, BMW, Hyundia, etc. So please STFU. You can't spend your way to prosperity, if you could WE WOULD BE RICH NOW. Keynesian economics DOES NOT WORK, if it did, then it would have gotten us out of the Great Depression. And it would have gotten Japan out of their "Lost Decade". Which I sure you know nothing about. These policies have been TRIED, TIME AND TIME AGAIN THEY FAIL.!!!!!!!! Please take a basic Econ class because you start advocating for specific policies to be put in place, especially when you have no clue what you are talking about. Last, I'm not voting for Romney. In fact, I plan on voting for Obama in hopes that he screws us further and people can't blame it on sock puppet Romney. It will, hopefully, serve as a wake up call to you mindless dolts that GOVERNMENT HAS NO PLACE TAKING FROM ONE GROUP AND GIVING TO ANOTHER. (Hint, Romney and Obama are only factions of an inch different, but when Romney fails people will ,mistakenly, blame "austerity", "government cuts", and "deregulation"(even though Romney has no real plan to actually do any of those things). When Obama fails, they will be blaming the TRUE CAUSES, OVERSPENDING, TAXATION, AND CENTRALIZED BANKING.)
        Justin Campanale
        • 2 Years Ago
        You are an idiot. Romney was suggesting Chapter 7 liquidation.
      • 2 Years Ago
      [blocked]
        Yo Hinck
        • 2 Years Ago
        No Obama gets credit for doing the right thing in a time of crises, like anyone who has a heart and compassion for his fellow man would do. The money you are claiming that he used was not your money but the money we all pay in taxes to help our Government to help us in all aspects of life as we know it. You have the nerve to talk about racial violence when in fact it is idiot racist like yourself who create these bigoted problems all because you are a hater with no heart or compassion for your fellow man...you and your kind would of done well if Hitler would of won, but like Hitler and the dinosaurs your kind will be extinct soon enough. Thanks to the effort of Obama to see to it that all people have a right to an education...with education comes a smarter America which means your ignorant ass wil soon be gone. 4 MORE YEARS!!!!
        Justin Campanale
        • 2 Years Ago
        But you Republicans are perfectly happy when John Boner blubbers like a baby in order to get the bank bailouts approved. Bailouts which were much bigger than the GM/Chrysler bailouts.
        Justin
        • 2 Years Ago
        SonataGuy is right. My money was also taken to give to GM, and I didn't get a car in return. So if I wanted to make a donation to them, I would've written a check myself. The fact that the government did that on my behalf with my money, and then took credit that they actually did the saving, is wrong. That's like saying I hate eating my peas but I support someone forcing me to eating them..
        Yo Hinck
        • 2 Years Ago
        More Republican bullshit. Do you not have a mind of your own? Can you not read anything but the Republican journal? Get your facts straight please and then try to make a reasonably thought out response. And yes I truly believe President Obama deserves 4 MORE YEARS!!!!
      Walt
      • 2 Years Ago
      This election is very simple. If you take home a paycheck and you'd like the opportunity to earn a larger paycheck someday - Vote for Romney If you don't get a paycheck and don't care if you ever get a paycheck - Vote for Obama. That's all.
        ragtopdodge
        • 2 Years Ago
        @Walt
        The election is simple. Let the poor and middle class make all the sacrifices. Let the rich make none and make even MORE money. Under Romney's tax plan, he'll essentially pay ZERO taxes b/c all of his "income" is from investments, which he wants 0% taxrate on capital gains.
        Justin Campanale
        • 2 Years Ago
        @Walt
        My paycheck took a big hit during the shitstorm in '08, which Bush caused. Under Obama, it has gone up substantially.
          1454
          • 2 Years Ago
          @Justin Campanale
          You're a moron. Period, end of story. The fed had more of a hand in causing the collapse of 08 than ANY president EVER could. You shouldn't even be allowed to vote for making such a stupid statement like this.(PS, I HATE BUSH and his stupid Patriot act)
          Justin
          • 2 Years Ago
          @Justin Campanale
          Bush demanded banks lend to everyone even if they can't pay back the money?
        1454
        • 2 Years Ago
        @Walt
        NOT EVEN CLOSE. Romney=Obama, only with a bigger bank account. The only things they differ on are nuances that don't matter anyway. Until Romney calls for the elimination of the 16th amendment and our central bank, he is just a puppet in the game of politics. Grow up and realize that.
      ragtopdodge
      • 2 Years Ago
      The right-wing trolls are thick on this article.
      carguy1701
      • 2 Years Ago
      I don't know who I will vote for. I know it won't be Romney. The bailouts were a good idea, unless you were some kind of sadist who wanted everyone who worked for GM and Chrysler to lose their jobs.
        • 2 Years Ago
        @carguy1701
        [blocked]
        Jason Krumvieda
        • 2 Years Ago
        @carguy1701
        I like how people with different view points than the President instantly enjoy watching others suffer. I have been suffering for almost 4 years by simply watching him give the same old tired speech. http://www.youtube.com/watch?v=VIKeYOEFc40
          • 2 Years Ago
          @Jason Krumvieda
          [blocked]
          • 2 Years Ago
          @Jason Krumvieda
          [blocked]
          ragtopdodge
          • 2 Years Ago
          @Jason Krumvieda
          How about you mov e out of the country then?
        1454
        • 2 Years Ago
        @carguy1701
        I don't want anyone to lose their job unless they deserved it. If you worked for GM or Chry, THEN THE WRITING SHOULD HAVE BEEN ON THE WALL A LONG TIME AGO. So if you were collateral damage in trainwreck that was those two companies, THEN YOU HAVE NO ONE TO BLAME BUT YOURSELF. Comprende? The bailouts weren't of GM, they were for the Unions. (PS, this is across party lines, HENCE THE REASON WE SHOULDN'T VOTE FOR ANY OF THEM) GM and Chry both deserved to go bankrupt for their poor business practices/model. Pick up a econ book and READ. More reading, less gum flapping. Then you will understand why this was a bad idea.
      i.own.your.ass
      • 2 Years Ago
      US companies are now state owned..period....
        Yo Hinck
        • 2 Years Ago
        @i.own.your.ass
        Really lets see if your right... The bailout of AIG for instance. The Government bailed them out and has since sold them back a majority of their stock back at a nice little profit giving back control to AIG slowly getting out of big business ownership...which was done at a time of financial crises, The Big Banks also were bailed out but has since turned it around and given the Government a nice little profit, only thing with the banking industry it has to be regulated by the Government...not owned by them. the list can go on, but I figured to just let you know just how wrong you are. 4 MORE YEARS!!!!
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