Bloomberg opposed auto bailout: 'I don't know where it stops'

Melissa Nann Burke
The Detroit News

Democratic presidential hopeful Mike Bloomberg opposed bailing out the auto industry in 2008, questioning whether rescuing General Motors Corp. and Chrysler was "good for the overall country" and if automakers deserved the aid after poor management.

"It's hard to see how they get their act together. Their sales are down 75%. They haven't built the kind of cars the public wants," Bloomberg said in a radio interview in November 2008. 

Democratic presidential candidate and former New York City Mayor Mike Bloomberg

"I don't know where it stops. Other than politically, anybody that's got lots of employees who can get together and pressure (officials), they're likely to get bailed out." 

The billionaire former mayor of New York was speaking on his weekly radio show, "Live from City Hall with Mayor Mike and John Gambling" on WOR-AM. 

"And listen, if I ran a car company or I ran an automotive workers union, I would be there (in Washington) doing exactly the same thing," Bloomberg added. "But whether that's good for the overall country ..."

But Bloomberg's campaign said this week he wasn't saying, as president, he would not have supported the bailout.

"Mike Bloomberg recognizes the important role the auto industry plays as the backbone of Michigan's economy and that inaction in 2008 would have been catastrophic for Detroit and the nation," Bloomberg spokeswoman Charly Norton said.

"Mike's point is that taxpayers should not have to bail out companies from the bad decisions made by their executives, and that we need to provide support for the people whose jobs were in jeopardy — as founder and owner of a global company with more than 20,000 employees, Mike knows firsthand the responsibility that entails," Norton added.

Democratic presidential candidate and former New York City Mayor Mike Bloomberg gestures as he speaks during campaign event, Thursday, Feb. 20, 2020, in Salt Lake City.

"As president, Mike will prevent another financial crisis of the scale of 2008 by ensuring that the economic system can withstand shocks without requiring taxpayer bailouts."

A former Republican, Bloomberg's commentary was similar to other criticism of the auto bailout at the time. Many GOP lawmakers opposed the plan, slamming the industry's management, lack of innovation and predicting its eventual collapse. 

Bloomberg's radio interview aired Nov. 7, 2008 — shortly before Utah Sen. Mitt Romney's infamous New York Times guest commentary titled "Let Detroit Go Bankrupt," which was an issue in Michigan and Ohio during 2012 GOP presidential campaign. 

The $85 billion bailout, overseen by President Barack Obama's administration, was credited with saving or creating hundreds of thousands of jobs in the industrial Midwest — 200,000 in Michigan and 1.3 million U.S. jobs, by some estimates. Taxpayers lost $9.26 billion that was never paid back. 

Bloomberg in a September 2008 interview on NBC's "Meet the Press" had argued there should have been more concern for assisting people over protecting an industry. 

"We should have been working on training; we should have been working on regulation that would force them to come up with products that are good for the world so that they can sell them and keep their — keep jobs, good-paying jobs with benefits," Bloomberg said. 

"That's what we're trying to do in this country. And where you let the free markets work, generally it does. But free markets cannot work without some regulation."

Bloomberg was endorsed this month by U.S. Rep. Haley Stevens, a freshman Democrat from Rochester Hills who campaigned on her experience as the chief of staff of Obama's auto task force.

Asked Thursday about Bloomberg's position on the auto rescue, Stevens declined to comment.

"I’m very proud of what we did on the auto rescue," she said. 

Stevens said she has spoken to Bloomberg about legislation to deal with a union pension crisis that could force cuts in payments to hundreds of thousands of retirees nationwide. 

Democratic presidential candidate and former New York City Mayor Mike Bloomberg speaks during campaign event, Thursday, Feb. 20, 2020, in Salt Lake City.

"It reminds me of the auto rescue," she said. "He's got a plan to get it done, and I believe he's the one to do it."

For over a decade, Democrats in Michigan and elsewhere have used opposition to the auto rescue as a club against Republican and Democratic rivals, from Romney to Donald Trump to Bernie Sanders. 

In 2016, Hillary Clinton claimed that Sanders — now the Democratic presidential front runner — opposed the automotive bailout.

While Sanders supported rescuing the industry, he opposed legislation devoted to forestalling the foreclosure crisis — a substantial chunk of which Obama eventually used to prop up the two car companies and their lending arms. 

Clinton insisted the Vermont senator’s opposition in 2009 to releasing the last $350 billion allotment from the $700 billion Troubled Asset Relief Program was effectively a vote against the auto rescue.

Sanders pushed back against Clinton's claim during the March 2016 debate in Miami, noting he had cast a vote for the auto bailout bill in the U.S. Senate in September 2008 (but Congress was deadlocked on the legislation).

Obama, while campaigning for Clinton in Ann Arbor in 2016, credited the auto bailout with saving Michigan's economy and criticized Trump for saying in 2015, "you could have let it go bankrupt." 

Trump had told The Detroit News in 2015 that GM and Chrysler could have been saved without government bailouts.

“I think it would have worked out the other way, too,” Trump said. “It would have been a free-market deal.”

But in 2008, Trump was supportive of the auto bailout, telling Fox News in December of that year that he supported a rescue.

“I think the government should stand behind them 100%. You cannot lose the auto companies," Trump said. "They’re great. They make wonderful products."