White House: ‘Tough love’ led to General Motors’ position today

Treasury Secretary Timothy Geithner with Barack Obama

While the White House today congratulated General Motors on its announcement of investing $2 billion in 17 plants in eight states creating new jobs, it said that the outcome is evidence that the government’s ‘tough love”‘worked.

Click here for GM’s announcement on investing $2 billion in U.S. assembly and component plants.

In a White House blog post today, Ron Bloom, the former auto czar, said that the 4,000 jobs to be added or retained by GM were due to the tough conditions imposed by the administration on the government’s $49.5 billion bailout of the company.

In the post titled “How Tough Love Averted Catastrophe & Led to 4,200 New American Jobs,” Bloom said:

President Obama took office amidst the worst recession in a generation and nowhere was this devastion felt harder than in the American auto industry and the communities it has supported for decades. In the year before GM and Chrysler filed for bankruptcy, the auto industry shed over 400,000 jobs.

Facing this situation head on, the President made a bold and, at the time, politically unpopular choice: Despite calls from critics to simply let these companies – and the entire American auto industry – crumble, he refused to allow these companies to fail. Had the Administration failed to intervene, conservative estimates suggest that it would have cost at least an additional one million jobs and devastated vast parts of our nation’s industrial heartland.

– By: Omar Rana

Source: White House (via Detroit News)
Image Source: Official White House Photo by Pete Souza