Bloom says auto bailout was needed

Aug. 22, 2011 at 1:59 PM
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WASHINGTON, Aug. 22 (UPI) -- White House consultant Ron Bloom said the U.S. automobile industry is healthier than expected with two of Detroit's big firms having gone through bankruptcy.

"The results are better than we had forecast. … The companies have done a better job on the cost side, on the product side, and on the pricing side. That's all good," Bloom said in an interview with The Detroit News published Monday.

Bloom said the government had no choice but to buy into General Motors and Chrysler in bailout deals structured to save a longstanding, jobs-intensive industry.

Republicans warming up to a presidential campaign have criticized the deal as expensive to taxpayers. But Bloom said, "There was no -- zero, zero, zero (debtor in possession) financing available for a company of this size. The idea that there was a free lunch solution, I think, is just really not anywhere near reality."

Bloom did say the government should have pressed for better terms with GM and Chrysler, but that hindsight was 20-20.

GM went public in November and has seen share prices drop in recent weeks, hitting $22.16 per share Friday.

If the government's remaining shares in GM were sold at that price, taxpayers would lose an additional $15 billion out of its $49.5 billion investment, the News said.

Taxpayers lost $1.3 billion out of the $12.5 billion the federal government invested in Chrysler. Last month, the government sold its remaining shares in Chrysler to Fiat, which now runs the company.

Bloom is leaving his White House post this week, but does not have a new job lined up yet, the News said.

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