Federal Assistance to Domestic Auto Industry
In 2008 and 2009, the federal government took a series of steps to preserve an American auto industry whose survival was threatened by the crushing effects of a global economic crisis. These steps included providing financial support for General Motors and Chrysler as part of accelerated bankruptcy proceedings for each company.
It is clear now that providing this support was the right decision. Failure to act would likely have cost millions of American jobs and devastated states and communities in which auto manufacturing is the backbone of the economy. The restructuring that accompanied federal support was painful – thousands of families were hurt by the job cuts that were required. But the alternative – uncontrolled bankruptcy for two domestic automakers and the likely failure of a third, along with hundreds of suppliers – would have been far worse.
Since emerging from bankruptcy, GM and Chrysler have demonstrated – through higher sales, better financial performance and critically acclaimed products – the wisdom of the taxpayers’ investment. Both have made significant progress in repaying taxpayers. Likewise, Ford, which did not enter bankruptcy, has enjoyed renewed success. These events demonstrate that a federal government working cooperatively with U.S. manufacturers can help preserve and increase employment and help U.S. companies thrive. To follow through on the taxpayers’ investment, the federal government must continue to work with the industry, in ways such as assisting the development and spread of advanced alternative-energy vehicles.
Senator Levin appreciates your feedback on this and other issues. Fill out the form below to share your feedback on this issue.