President Obama defended his administration’s decision to take a 60 percent government stake in General Motors as Republicans criticized the president for his interference in the private sector.
The nation’s premier business lobby joined the GOP in its criticism of Obama’s plan, arguing that the government and workers’ unions had the potential to influence business decisions and disrupt trade relationships.
“What I am not doing, what I have no interest in doing, is running GM,” he said.
“They, and not the government, will call the shots and make the decisions about how to turn this company around,” he noted. “In short, our goal is to get GM back on its feet, take a hands-off approach and get out quickly.”
Hours after GM filed for bankruptcy Monday morning, Obama announced the government would purchase 60 percent of the company and also provide another $30 billion in aid.
The administration also argued its stake in GM was the only way to avoid total job loss and further devastation of the country’s economy.
“Understand we’re making these investments not because I want to spend the American people’s tax dollars, but because I want to protect them,” Obama said in the Grand Foyer of the White House on Monday morning in a speech covered by all the news networks.
Republicans, however, began their attacks before Obama started speaking, blasting the president for turning GM into “Government Motors.”
And several GOPers, including potential 2012 presidential candidate and former Massachusetts Gov. Mitt Romney, assailed the administration for its course of action, with some calling Obama the new “president and CEO” of GM.
The U.S Chamber of Commerce, one of big businesses’ largest D.C. advocates, argued that unions could play too big a role in the restructuring.
Thomas Donohue, president of the Chamber, said his biggest concern “is the potential for governments and unions to influence production, product, workforce and management decisions in ways that could jeopardize the automakers’ chances for survival, put politics and special interests above sound business strategy and disrupt our nation’s trading relationships across the world.”
Donohue promised that the Chamber will be monitoring the arrangement moving forward, and it “will expose and fight any counterproductive influence by government, unions or politicians over decisions that should be left to management.”
“And we will continually insist that government reduce and eliminate its ownership stake as soon as possible,” he said.
The GOP was also quick to demonize Obama’s close relationship with unions, questioning how much the United Auto Workers (UAW) union was actually sacrificing compared to the other stakeholders.
Steele said taxpayers will “get stuck with up to a $50 billion tab for the taxpayer dollars Obama is using to pay for his takeover of GM.”
“This is a very sad day for the autoworkers and their families, whose financial well-being will be directly affected by this clear act of an overreaching UAW and overbearing government,” he said.
Romney, in a speech at the Heritage Foundation, added that his “guess is the UAW got a better deal under the administration than it would have gotten under a bankruptcy judge.”
Obama said the new plan “will require the United Auto Workers to make further cuts in compensation and retiree healthcare benefits — painful sacrifices on top of all that they have already done.”
And the UAW put out a fact sheet noting the “enormous sacrifices that have been made by active and retired workers” in order to “save GM billions of dollars.”
Romney did, however, place the blame on both the Obama and George W. Bush administrations for bailing out the company in the first place instead of setting up a structured bankruptcy from the get-go.
“I’m not pointing the finger at only one president, but administration policies of both,” Romney said.
The timing of Obama’s announcement and GM’s bankruptcy was not without a silver lining, though, as a New York judge on Monday morning cleared the way for the bankrupt automaker Chrysler to merge with Fiat.
Obama noted that Chrysler went bankrupt “31 days ago” and will be pulling out of the structure “in the next few days.”
“All in all, it’s a dramatic — an outcome dramatically better than what appeared likely when this process began,” Obama said.
The president warned that a similar turnaround for GM will likely take longer because it is a “larger and more complex company.”
White House press secretary Robert Gibbs declined to offer any specific timeline for how long the federal government might be in the auto business, except to say that “we’ll get out as quickly as possible in order to protect the investment the taxpayer has made.”
“There is an exit strategy — it’s to get this company viable,” Gibbs said.
Reid Wilson contributed to this article.