Ford Motor Co., the only large U.S. automaker that didn’t receive a U.S. government bailout, would’ve failed along with General Motors Corp. and Chrysler LLC if President Barack Obama’s administration hadn’t rescued the industry, said Steven Rattner, who headed Obama’s auto task force.
“Ford would have closed because it wouldn’t have been able to get parts, because the parts industry in this country was in arguably worse shape than the assemblers,” Rattner said today at the Center for American Progress in Washington.
Rattner, now chairman of the Willett Advisors LLC investment firm, led the $63.4 billion bailout in 2009 of GM and Chrysler, which he said would have fired all their workers and ceased to exist without the bailout.
President George W. Bush, who preceded Obama, “did the right thing” by beginning the bailout process, giving $17.5 billion to GM and Chrysler in 2008, Rattner said.
The auto bailout has been a point of contention in the presidential race between Obama and Republican Mitt Romney as they compete for votes in swing states including Ohio, home to U.S. automaker and parts-supplier plants. Romney opposed the government bailout.
Ford Chief Executive Officer Alan Mulally last month made similar comments, saying he doesn’t regret testifying before Congress in support of taxpayer support for his competitors.
“We think about that a lot, should we have gone back and testified on behalf of our competitors who were bankrupt,” Mulally told reporters Sept. 18 in New York. “I would do the same thing again today.”
Mulally said he agreed with the assessment of “the economic advisers of the Bush administration and the Obama administration that if GM and Chrysler had gone into free fall, they could have taken the United States from a recession into a depression.”
The U.S. government was the only entity that could save the domestic automakers because no one, including banks that were dealing with their own financial crises, was willing to put private capital into GM and Chrysler at the beginning of 2009, Rattner said.
“If you can’t pay your workers, if you can’t pay your suppliers, if you can’t pay your electric bills, then you have to liquidate,” he said. “This is what government is set up to do.”
Ford gained 0.5 percent to $10.10 at the close in New York. The shares have declined 6.1 percent this year.