DETROIT -- American taxpayers are better off because General Motors Co. went public and Chrysler Group is headed toward doing so this year or next, a key architect of the U.S. government's 2009 rescue said today.
Ron Bloom, senior counselor to the U.S. president for manufacturing policy, said saving the two U.S. automakers from collapse “avoided a devastating blow,” and was better than either letting them fail or taking over active control.
Speaking to the 2011 Automotive News World Congress, Bloom said if GM and Chrysler had been allowed to collapse, the auto industry job losses would have been in the millions and “the entire American manufacturing industry would have been put at risk” in early 2009.
The U.S. auto task force made mistakes, but accomplished its goal of giving the automakers “a fair chance to make it,” he said. The bailouts also prevented a collapse by either GM or Chrysler from pulling down Ford Motor Co., which did not seek a federal bailout but shared its supplier network with the other Detroit automakers.
“In general, we got it right,” Bloom said.
Detroit 3 profitable
He cited the Detroit 3's results in 2010 as proof of the turnaround: all three were profitable for the first time in six years and saw a collective market share increase for the first time in 15 years.
While Chrysler is on track to go public this year or next, “Chrysler is not out of the woods, but making progress,” he said. “So far, so good.”
Bloom said the U.S. government would continue to let the boards of both automakers run their businesses. The government supports GM's efforts to sell off the remaining government stake through another round of selling stock.
The government will let Chrysler decide the timing of his initial public offering, and would let Fiat Automobile increase its 25 percent stake in Chrysler Group to a controlling 51 percent, as long as Fiat first repaid Chrysler's federal loans, he said.
Getting 'our money back'
“If that's what they want, that's terrific because we'd like to get our money back,” Bloom told reporters after his speech. “If there are other changes that need to be made, we are ready sit down and talk to them.”
Smiling, Bloom said he was in town partially to visit Chrysler's Jefferson North assembly plant and buy a new version of the 2011 Dodge Durango to replace his old one.
“I expect to buy my Durango from Chrysler,” he said, “and I expect Chrysler to be the ones to [service] it.”