CNN's Velshi: Opponents of Auto Bailout 'Kind of Have Egg on Their Faces'
Despite the cost
of the auto bailout to taxpayers, CNN hailed the subsequent resurfacing
of GM as a "pretty amazing" feat and took a jab at the original
opponents of the bailout, which included current presidential candidate
Mitt Romney. Thursday's John King, USA featured fill-in host Kate
Bolduan and business correspondent Ali Velshi wagging their fingers at
Romney and the naysayers.
"And, by the way, Kate, I know you didn't ask me the question, but those people who fought against the auto bailout a couple of years ago kind of have egg on their faces right now," Velshi quipped.
After reporting the record profits of General Motors, Bolduan began the
segment by pitting "that made-in-America pride" against Romney's
opposition to the "government bailout and bankruptcy that kept GM
going." Apparently, Romney not only stood against the bailouts but
against the "made-in-America pride" of GM.
Bolduan took another indirect shot at Romney later when she marveled that "It's really amazing when you kind of look back with hindsight, because there were so many skeptics, Ali, when we were covering this when it was happening back in '09."
And the CNN host continued the narrative in her later interview with Michigan Governor Rick Snyder (R). She pressed the governor over his endorsement of Romney, and his opposition to the bailout. "Do you think, though, those words could come back to haunt him in this primary?" she asked of Romney's condemnation of the bailout in 2008.
She also tried to vindicate President Obama's decision to follow-through with the bailout. "So is today's news a vindication of sorts for that controversial move?" she asked Snyder of Obama's decision.
A transcript of the segment, which aired on February 16 at 6:06 p.m. EST, is as follows:
BOLDUAN: Today, General Motors announced it earned record profits in 2011, $7,600,000, pretty amazing. And thanks in part to the nine million vehicles it sold worldwide last year, GM is the biggest automaker in the world in terms of sales.
Tonight, that made-in-America pride is bumping up against Mitt Romney's opposition to the multibillion-dollar government bailout and bankruptcy that kept GM going. Let's talk about this with CNN chief business correspondent and my very good friend Ali Velshi. Hey there, Ali. Thanks for staying and talking to me.
ALI VELSHI, CNN chief business correspondent: Great to see you, Kate.
BOLDUAN: On this whole issue, look at – these numbers are really amazing. So what does it mean? Does it signal that big auto is back?
VELSHI: Yeah, and for a number of reasons, the greatest of which is that the financial crisis is behind us, the recession is over, and credit is available.
You know, a lot of people didn't buy cars over the last few years. And that's created pent-up demand. The average age of a car in the United States in December was 11 years. So people have been holding onto these cars. They're ready for them. And because of sustained high gas prices, they're turning away from trucks and SUVs, at least those that are not hybrids, and going to cars.
So the average price of a new car is now $25,000. It doesn't mean that car prices have come down. What it means is that there are a lot more cars available to buy now in the $16-17-19,000, range. And they're actually not bad cars. Through the recession and through the financial crisis, these automakers learned they're going to use the same platforms that they used to sell cars in Europe and increasingly into China and India. So, yeah, the auto industry is back.
And, by the way, Kate, I know you didn't ask me the question, but those people who fought against the auto bailout a couple of years ago kind of have egg on their faces right now.
BOLDUAN: Some would say that's absolutely true. I think a bigger question, and probably a question that anybody that's struggling in business right now is, how did they pull this out – pull this off, really? How did GM make such a dramatic turnaround?
VELSHI: Well, first, there are a few things. The first – the biggest one is that they did get the bailout. GM was in very, very serious trouble if they hadn't gotten that bailout. They also declared bankruptcy, if you recall. And that allowed them to cancel contracts, very expensive contracts, cut new deals and close some dealerships, things that in the fair pursuit of business, you can't do.
So it's not that they did this all on their own. If you look at Ford and Chrysler, they're all profitable. Ford did it on its own without any bailouts and without having to do that kind of thing.
The bailout helped. The fact that the recession is over helped, and the fact that that crisis made all of these carmakers retool and do what they had to do in order to actually make cars that people wanted to buy. Some of these GM, Ford and Chrysler cars, not so many with Chrysler these days, but the GMs and Fords are actually very good cars.
Look at those profits, up 39 percent compared to 2010. So they did it with a little help, but the bottom line is, they did it and it saved a lot of jobs.
BOLDUAN: It's really amazing when you kind of look back with hindsight, because there were so many skeptics, Ali, when we were covering this when it was happening back in '09.
-- Matt Hadro is a News Analyst at the Media Research Center