By Peter Schroeder - 06/01/11 12:35 PM EDT
But thanks to the government intervention, the two companies have added over 100,000 jobs and paid back over half of their investment. But such a positive turnaround was no guarantee.
"The industry is mounting one of the most improbable turnarounds in recent history," he wrote. "The outcome was anything but assured."
Geithner painted the decision to step in and save the companies as a tough choice for the president that ultimately paid off.
"It may have been more politically expedient to let Chrysler fail," he wrote. "But the president knew that if Chrysler collapsed, tens of thousands of jobs would have been shed in the near term — a body blow to an economy already on the ropes."
Geithner describes a domestic auto industry that was "burning" during the financial crisis, and on the brink of failure before government intervention.
"It was not clear whether there was a responsible way to put taxpayer dollars on the line in a way that helped ensure the companies emerged stronger, not weaker," he said. "In the balance hung thousands of auto dealerships nationwide and small businesses in communities with concentrations of auto workers."
But by pushing for major concessions and driving the companies through the bankruptcy process, Geithner said, the government took the right steps to return the companies to stability and profitability.
"The choice to stop the American automobile industry from unraveling was the right one," he wrote.