Minds can be changed when the outcome of a decision produces undeniably beneficial results. So it is with the Auto Task Force, established in the early weeks of the Obama Administration to deal with the possibly imminent failure of two of the “Detroit 3" automakers. As part of the Task Force’s operation, Chrysler and General Motors wound up getting billions of dollars in “bailout” money from the federal government. Not long afterward, both companies were climbing up from bankruptcy and en route toward revitalization.
As a Republican, it “pains me to say this,” said Mike Jackson, chairman/CEO of AutoNation, a top dealer group. Speaking at the Automotive News World Congress, Jackson admitted that the “Auto Task Force probably saved” the automobile industry and has “given us this new chance.”
Jackson’s opinion was especially noteworthy, because numerous dealership closings turned out to be part of the revival process. In his view, we were “staring at the end of capitalism” when deciding whether to save Chrysler, in particular.
Back in the early spring of 2009, plenty of Republicans opposed the bailout of the automakers, alleging that the federal government was trying to interfere with private, corporate activities. Also opposed were some Democrats and liberal progressives, for different reasons. Some asserted that a government bailout—unless rigorous conditions were imposed—could serve as a reward for decades of mismanagement by top executives of the two companies.
Now, many of those who opposed the bailout are delighted by the result, and certain that it was essential. Without doubt, it saved tens of thousands of auto-industry jobs. Even some of its staunchest early critics agree that the Obama Administration “did it right,” leading to results that came far ahead of most expectations.
The Task Force was formed in February 2009; three months after the heads of the “Detroit 3" automakers had arrived in Washington—via plush private jets—to seek federal assistance. Over a six-month period, the auto industry had lost 105,000 jobs (almost 20 percent), said Ron Bloom, senior adviser to the Secretary of the Treasury. Eventually, almost 400,000 jobs were lost. Clearly, something had to be done, but Bloom forcefully admits that the corporate executives had let this happen. “While the world changed around them,” Bloom told the World Congress audience, “these companies were living in the past.”
Responding to critics who felt the Task Force went too easy on those executives, or that certain groups—notably, the United Auto Workers Union—got favored treatment, Bloom explained that, “our assistance was anything but unconditional.” Furthermore, “we made a conscious effort to limit our involvement as much as possible.” Since then, “we have stuck to our decision to stay out of day-by-day decisions.”