If you listen to liberals, Democrats, and media sycophants who praise Obama just for breathing, the President saved the automobile industry. Bob Bechel on Fox’s “The Five” spouted this canard over and over again on yesterday’s show (12-22-2011).
A study of the automobile industry in the United States will show that there were many more companies than what we have today.
Studebaker entered the automotive business in 1902 with electric vehicles and in 1904 with gasoline vehicles, all sold under the name “Studebaker Automobile Company.” The first gasoline cars were first marketed in 1912. For 50 years, the company had a reputation for quality and reliability. Studebaker ceased American production in 1963 and in Canada in 1966. There was no government bailout.
American Motors Corporation (AMC) (Remember the Pacer, Gremlin, and Marlin?) was an American automobile company formed by the 1954 merger of Nash-Kelvinator Corporation and Hudson Motor Car Company. Nash made the Rambler. Hudson made the Hudson, the car that “Doc Hudson,” voiced by Paul Newman, drove in Cars. (As an aside, for all those liberals who want to pay more taxes instead of investing in America, Newman was a co-founder of “Newman’s Own,” a food company that donated all post-tax profits and royalties to charity. As of July 2011, these donations exceeded $300 million.) The Fabulous Hudson Hornet was a famous NASCAR Grand National (now Sprint Cup Series) and AAA stock car produced by the Hudson Motor Car Company. Nash, Hudson, and AMC are no more.
There was no government bailout.
There were many more. Those that didn’t go belly up were bought out by more financially sound automobile companies. Other companies merged.
The automobile industry survived. America survived.
Claiming that Obama saved the automobile industry is like saying that a bank robber saved his job, paid off his house, and sent his children to college. It’s easy to save an industry with someone else’s money. There’s a line from the 1940 film Beyond Tomorrow that fits here: “You have a heart of gold with other people’s money.”
In the real world, a company in financial trouble would cut expenses, lay off employees, reduce salaries, merge, or declare bankruptcy. Because of union pressure, GMC, General Motors, and Chrysler got favorable treatment from an administration that had no right to loan money that wasn’t theirs to loan. Ford did not seek a bailout.
In the real world of free markets, the companies would have been devalued, and investors would have come in to purchase the companies. The companies would have been restructured, and if the government and courts stayed out, the union would have lost bargaining power.
If all had gone according to market conditions, the union could have been eliminated and right-to-work principles would have prevailed. Labor costs would have dropped and cars would have been cheaper to manufacture. These new conditions would have put price pressure on other automobile manufacturers to force them to lower their prices.
In the end, we would have had a leaner and meaner automobile industry with no cost to tax payers.
So, in the end, the only thing Obama saved was Liberalism.