No one’s perfect, not even the anointed fact checkers who take on the admirable and valuable task of holding public officials accountable for what they say. Sometimes in their zeal for accountability, they get ahead of themselves and the facts. And that seems to be what happened today, when the Washington Post fact checked the President’s remarks last week on the resurgent American auto industry. So let’s take a minute to restore that context before we discuss the specific facts in question.
In the year before the President took office, the American auto industry lost more than 400,000 jobs. Chrysler and GM were facing liquidation.
President Obama had a choice: He could have extended billions of dollars of taxpayer support without requiring any real changes. He also could have allowed the companies to collapse, which, because they are closely linked to networks of suppliers, dealers and other auto companies, would have had a dramatic ripple effect through the industry. Independent forecasts projected that, were the companies to fail, it could have eliminated more than 1 million jobs. Instead he chose a different way: standing behind the American auto industry, but requiring the companies to undergo painful restructuring to become competitive for the future.
So last week – two years after making that difficult decision – the President delivered an accounting of its results to date. In doing so, he pointed out that Chrysler had more than repaid the $8.5 billion that the Obama administration invested in the company. That’s a fact. Chrysler has repaid $10.6 billion in loans, and the Treasury recovered another $560 million by selling its remaining stake in the company to Fiat last week.
It is also true that the prior administration had invested $4 billion in the company prior to President Obama taking office. But let’s be clear: had President Obama not taken action, Chrysler would have liquidated and that money would have been gone. Instead of losing all $4 billion of those dollars, we have recovered more than 70% of them for taxpayers, in addition to all of the funds committed by President Obama.
Given those facts, it is not only factually accurate for President Obama to note the full recovery – and then some – of the funds he decided to commit to Chrysler, but it is an accurate description of the circumstance he faced and the decisions he made with respect to the company.
In muddying that fact, the author also misunderstands another, claiming that Chrysler will not “soon…be 100 percent in private hands.” For the record, the UAW, which is in fact a private entity, does not own Chrysler stock. The Voluntary Employee Beneficiary Association (VEBA) which owns the stock is an independent trust, not controlled by the UAW, but by independent fiduciaries. The UAW has minority representation on the Trust governing body.
The second point on which the Post falls short is in suggesting that the 113,000 American jobs added by the auto industry since Chrysler and GM are irrelevant because the figure includes jobs at suppliers, dealers, parts manufacturers, and other related entities.
The President has always said he viewed his decision in the context of standing behind not just Chrysler and GM. but the American auto industry as a whole. That view is backed up by even conservative estimates, which suggest that more than a million American jobs would have been lost had the President failed to act. It’s also why Ford CEO Alan Mulally said that even though his company did not take government funds, “if GM and Chrysler would have gone into freefall bankruptcy, they would have taken the supply base down and taken the industry down plus maybe turned the U.S. recession into a depression.”
Mr. Mulally’s quote also debunks the Post’s assertion that critics of rescuing the industry had a plan other than to do nothing. In late 2008 and early 2009 there was no private capital being volunteered to save the industry. That’s why Chrysler CEO Sergio Marchionne recently said that anyone who claims the company could have survived without government assistance is “smoking illegal material.” Without the President’s decision to step in, GM and Chrysler would have gone into liquidation, taking the American auto industry with them. Some may continue to believe that this was a better course for our economy, but they should defend that position, not try to rewrite the historical record.
Finally, the Post downplays the fact that GM is in the process of rehiring of thousands of workers who were laid off as part of the restructuring. The President will be the first one to tell you that we will not rest until every American who is looking for a job can find one. But we will also not apologize for touting the rehiring of nearly 10,000 American manufacturing workers and the fact that soon no GM employees will be laid-off as good news.
Dan Pfeiffer is White House Communications Director