From 'lifeline' to 'worst' fear: How the rescue was viewed
Photo credit: BLOOMBERG
The U.S. Treasury Department's sale last week of its final shares of General Motors stock hasn't erased controversy over the bailout that gave Treasury a stake in the nation's biggest automaker.
Five years ago, the debate was playing out on prime-time newscasts and front-page headlines.
On Dec. 11, 2008, the U.S. Senate rejected a rescue plan.
On Dec. 19, with a month left in his presidency, George W. Bush pledged $17.4 billion from the Troubled Asset Relief Program to keep GM and Chrysler alive. And by demanding that they show "viability" by March 31, 2009, Bush left his successor, Barack Obama, to ultimately decide their fate.
On Dec. 20, Canada followed with its own rescue.
Our look back at the industry's collapse continues with these excerpts from U.S. and Canadian editorial pages from Dec. 20 and 21.
"When a man is drowning, you don't waste time pondering how he got into trouble. You throw him a lifeline. President Bush threw a $17.4 billion lifeline to General Motors and Chrysler on Friday. It was the right decision in an unprecedented emergency. And it was crafted to be a limited rescue tool, not an open-ended subsidy."
-- The Arizona Republic
"The automakers have until March 31 to prove their 'viability' and show positive cash flow. Thus they have three months to turn around a decade of decline and mismanagement. Good luck with that. This is a deal we'll all come to regret."
-- Boston Herald
"This is not an optimal result. After years of substandard performance, the U.S. auto industry had itself to blame for most of its problems, and in normal times the two companies should have been left to the tender mercies of a bankruptcy court. But the only thing worse than the administration's plan would have been doing nothing. These are anything but normal times."
-- The Washington Post
"The American automakers had the misfortune this year to see the country freefall into recession when they were already in deep trouble. But they had the extraordinary good fortune to be rescued, at least for the time being. They need to recognize now that they are no longer what they once were, in almost any sense."
-- Dayton Daily News
"But with no better track record than GM and Chrysler have shown in recent years, and with more than half of 'foreign' autos already being manufactured in the United States, we fear only the worst: Bush blaming Obama for mismanaging the plan, Obama blaming Bush for handing him a flawed plan, and Americans having 17.4 billion of their dollars wasted."
-- The Columbian (Vancouver, Wash.)
"Canada's choice with the auto sector is to hold its nose and bail out the troubled companies or bite off its nose and let them drown. A purist or idealist would let them drown, but when the economy is in a tailspin the pragmatists need to take charge. And this, as Prime Minister Stephen Harper appears to recognize, is a time for pragmatists."
-- The Globe and Mail (Toronto)
"The automakers have promised to now take very difficult and painful steps to assure their survival. We believe they will do that. Suggestions by some in Congress that the Detroit manufacturers don't understand their predicament are ridiculous. They do, and they are working all out to change their fate."
-- The Detroit News
"The controversy in Congress over the bailout bill -- a non-decision that was applauded by a great many Americans -- should serve as a warning to the Big Three, their unions and their suppliers: There is very little sympathy for the auto industry among the taxpayers, who are suffering from this recession and getting little help in coping with it. They will want to see some real change -- as well as the promised repayment -- from their $17.4 billion investment."
-- Reno Gazette-Journal (Nevada)