Ford would have shut without GM, Chrysler aid, Rattner says

Ford would have shut without GM, Chrysler aid, Rattner says
Angela Greiling Keane
Automotive News | October 9, 2012 – 11:20 am EST

DETROIT (Bloomberg) — Ford Motor Co., the only large U.S. automaker that didn’t receive a U.S. government bailout, would’ve failed along with General Motors and Chrysler if President Barack Obama’s administration hadn’t rescued the industry, said Steven Rattner, who headed Obama’s auto task force.

“Ford would have closed because it wouldn’t have been able to get parts, because the parts industry in this country was in arguably worse shape than the assemblers,” Rattner said today at the Center for American Progress in Washington.

Rattner, now chairman of the Willett Advisors LLC investment firm, led the $63.4 billion bailout in 2009 of GM and Chrysler, which he said would have fired all their workers and ceased to exist without the bailout.

President George W. Bush, who preceded Obama, “did the right thing” by beginning the bailout process, giving $17.5 billion to GM and Chrysler in 2008, Rattner said.

The auto bailout has been a point of contention in the presidential race between Obama and Republican Mitt Romney as they compete for votes in swing states including Ohio, home to U.S. automaker and parts-supplier plants. Romney opposed the government bailout.

Ford’s view

Ford CEO Alan Mulally last month concurred with Rattner’s view, saying he testified before Congress in support of taxpayer support for his competitors because it also saved Ford.

“We think about that a lot, should we have gone back and testified on behalf of our competitors who were bankrupt,” Mulally told reporters Sept. 18 in New York. “I would do the same thing again today.”

Mulally said he agreed with the assessment of “the economic advisers of the Bush administration and the Obama administration that if GM and Chrysler had gone into free fall, they could have taken the United States from a recession into a depression.”

The U.S. government was the only entity that could save the domestic automakers because no one, including banks that were dealing with their own financial crises, was willing to put private capital into GM and Chrysler at the beginning of 2009, Rattner said.

“If you can’t pay your workers, if you can’t pay your suppliers, if you can’t pay your electric bills, then you have to liquidate,” he said. “This is what government is set up to do.”

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