Weekly Address: President Obama Says Promising News From the Auto Industry Doesn’t Reduce Need for Wall Street Reform

WASHINGTON – In his weekly address, President Obama said that while the government is ending many of emergency programs put in place to stabilize the financial sector and restart lending, Wall Street reform remains urgently needed.  General Motors announced that it has repaid its loan to taxpayers with interest five years ahead of schedule, and Chrysler Financial has already fully repaid with interest its loan as well.  While this is good news, it is also a reminder that the crisis in the auto industry was caused in part by problems in the financial sector.  To help prevent another crisis, Congress needs to enact reforms to hold Wall Street accountable and protect consumers.

The full audio of the address is HERE. The video can be viewed online at www.whitehouse.gov.

Remarks of President Barack Obama
Saturday, April 24, 2010
Weekly Address
Washington, DC

It was little more than one year ago that our country faced a potentially devastating crisis in our auto industry.  Over the course of 2008, the industry shed 400,000 jobs.  In the midst of a financial crisis and deep recession, both General Motors and Chrysler – two companies that for generations were a symbol of America’s manufacturing might – were on the brink of collapse.  The rapid dissolution of these companies – followed by the certain failure of many auto parts makers, car dealers, and other smaller businesses – would have dealt a crippling blow to our already suffering economy.  The best estimates are that more than one million American workers could have lost their jobs. 

The previous administration extended temporary loans to both companies.  Even so, when I took office, the situation remained dire.  We had to determine whether or not we could justify additional taxpayer assistance.  After all, many of the problems in the auto industry were a direct result of poor management decisions over decades.  So it wasn’t an easy call.  But we decided that while providing additional assistance was a risk, the far greater risk to families and communities across our country was to do nothing.  We agreed to additional help, but only if the companies and their stakeholders were willing to break with the past.  They had to fundamentally reorganize, with new management that would reexamine the decisions that led to this mess and chart a path toward viability.  I knew this wasn’t a popular decision.  But it was the right one. 

So, GM and Chrysler went through painful restructurings: ones that required enormous sacrifices on the part of all involved.  Many believed this was a fool’s errand.  Many feared we would be throwing good money after bad: that taxpayers would lose most of their investment and that these companies would soon fail regardless.  But one year later, the outlook is very different