Task force chief says bailout saved Ford when it rescued parts industry

Article by Anita Panait, on October 12, 2012

Ford would have succumbed to bankruptcy along with General Motors and Chrysler if the administration of President Barack Obama had decided not to pursue the bailout of the US auto industry, according to Steven Rattner, chief of Obama's auto task force. Ford was the only major U.S. automaker that didn't receive a federal bailout.

Rattner remarked that Ford would have collapsed since it wouldn't have been able to get vehicle components, as the US parts industry that time was in worse shape than carmakers.

Rattner, now chairman of the Willett Advisors investment firm, led the $63.4-billion financial rescue in 2009 of GM and Chrysler. Rattner remarked that GM and Chrysler would have fired all their workers and shut down without the bailout. He added that President George W. Bush "did the right thing" by commencing the bailout process, providing $17.5 billion to GM and Chrysler in 2008.

The auto bailout is currently the hottest issue in the current contest for the upcoming presidential election between Obama and Republican nominee Mitt Romney, who opposed the financial rescue. Obama and Romney are competing to win votes in swing states like Ohio, where plants of several US carmakers and parts suppliers are located.

Ford chief executive Alan Mulally concurred with Rattner's view in September, saying that he testified before Congress in support of the financial rescue for his US rivals since it also saved Ford. Mullaly remarked that he would do the same thing again if needed. Ford’s CEO quipped that he agreed with the assessment of the economic advisers of both the Bush and Obama administrations that if GM and Chrysler had collapsed, they could have forced the US to fall from a recession into a depression.

Topics: ford

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