Auto bailout talk is history repeating
TEXT OF STORY
Scott Jagow: I just read an article in Time Magazine about a car maker bailout. In the article, critics say, why should a huge company be bailed out while thousands of smaller firms have to go through bankruptcy? And bailout supporters say the U.S. economy can’t afford big car makers to fail. The article was published in August 1979. It’s about Chrysler.
Congress might want to look through the archives as it holds hearings today and tomorrow on the Big Three’s request for help. Alisa Roth has more.
Alisa Roth: Read the news from 1979 and you understand why Gerald Greenwald’s experiencing deja vu. Greenwald was a vice president at Chrysler back then, and helped negotiate a big bailout from Congress.
Gerald Greenwald: The issues, the problems, the risks, they’re literally the same. I mean, there was a recession, there was the question of would Chrysler be better off cleaning up its act through bankruptcy. Virtually everything.
Mary Ann Keller is an auto industry analyst who thought bankruptcy would’ve been smart. She testified before Congress in 1979, against a rescue plan.
Mary Ann Keller: In fact, what the government did was very clever. Because the government actually mandated the equivalent of a reorganization and restructuring as a condition of granting the loan guarantees.
And it helped — not only did Chrysler get the money from Congress. It paid the loans back. Maybe that’s the one piece of the story where a sense of deja vu wouldn’t be so bad.
In New York, I’m Alisa Roth for Marketplace.
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