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Why Emanuel Was Wrong About the Auto Bailout

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Why Emanuel Was Wrong About the Auto Bailout
Why Emanuel Was Wrong About the Auto Bailout

This week, we learned that Rahm Emanuel was wrong about the auto bailout.

I’ve finally been reading "Overhaul," auto czar Steven Rattner’s account of the Obama Administration’s decision to rescue General Motors and Chrysler from insolvency. Here’s how he describes his first meeting with Emanuel, who was then White House Chief of Staff:

“Why even save GM?” he demanded provocatively, interrupting the conversation. Other people had asked the question in the past, but it was astonishing coming from Rahm Emanuel. It certainly wasn’t the challenge we’d anticipated. We had gone into the meeting expecting the White House to oppose letting even Chrysler go, but Emanuel had put GM in play, at least rhetorically.

When Rattner reminded Emanuel that tens of thousands of autoworkers could lose their jobs, Emanuel replied with a quote that has become part of his profane legend: “F--- the UAW.”

Obama was more sensitive to the economic devastation a GM collapse could cause the Midwest. The government loaned GM billions of dollars to keep it alive through the Great Recession. Obama also approved the sale of Chrysler to Fiat. On Tuesday, Chrysler paid back the $7.6 billion it borrowed from the U.S. At a ceremony in Sterling Heights, Mich., where Chrysler manufactures the 200, the car Eminem drives in the “Imported From Detroit” ad, 1,100 workers wore buttons proclaiming “Paid.”

The same day I started reading "Overhaul," I visited the GM Delta Assembly plant outside Lansing, Mich., where thousands of workers build the Chevy Traverse, the Buick Enclave and the GMC Acadia. They’re the answer to Emanuel’s question, “Why even save GM?” If those autoworkers have lost their $28-an-hour jobs, thousands of workers at nearby businesses would have been laid off, as factory money stopped circulating through the community.

The Delta Assembly plant replaced an obsolete Fisher Body in Lansing. It’s now a heap of rubble, surrounded by a chain link fence. Across the street is a bar, owned by a Greek immigrant named Gus. When Fisher Body was open, thirsty autoworkers waved dollar bills across the bar. The week after it closed, Gus laid off all 14 of his bartenders. He wants to sell out and retire to Greece. His wife has already moved back. But he can’t find a buyer for an old shop bar, so he lives above the tavern and works from 9 a.m. to 2 a.m., drawing all the beers and frying all the hamburgers himself. That’s what happens when a factory closes.

Emanuel likes to tell business leaders that he participated in the rescue of the auto industry, but if Obama had listened to his doubts, there might not have been a rescue. Just more demolished factories, and more empty taverns.

Buy this book! Ward Room blogger Edward McClelland's book, Young Mr. Obama: Chicago and the Making of a Black President, is available on Amazon. Young Mr. Obama includes reporting on President Obama's earliest days in the Windy City, covering how a presumptuous young man transformed himself into presidential material. Buy it now!

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