By Vicki Needham - 09/06/11 05:45 PM EDT
Vice President Biden defended the auto bailout and the Cash for Clunkers program, saying he'd do them again.
The auto bailout rescued all three big auto manufacturers from failure, including Ford, which didn't take any federal money, saving 1 million jobs and preserving the nation's "heavy-duty" manufacturing sector, he told Car and Driver magazine in an interview for the October issue, released Tuesday.
Even without the recession, Biden said the Obama administration would have still provided funds to prop up the companies.
"I would have, just because I don’t accept this proposition that somehow the U.S. cannot handle a heavy-duty manufacturing capacity, that we should shift our focus to service industries," he said. "Look at Japan and Germany — their labor costs are as high as ours. Big countries have to be able to make big things. Have to."
Meanwhile, GM is scheduled to pay off its government loans on time after Chrysler paid off its government loans six years early, he said.
"They’ve paid back a significant portion," Biden said. "We still hold 33.3 percent of GM common equity, but the point is that 33.3 percent is worth something. So taxpayers have an asset."
The Obama administration provided $8.5 billion to Chrysler on top of $4 billion provided by the Bush administration in January 2009. The Treasury Department recovered $11.2 billion of the loan but isn't expecting to recover the difference of $1.3 billion, the department said in June.
The government invested $50 billion into GM and still partially owns the firm; it requires $26.4 billion to recoup its full investment.
Although Biden says he doesn't expect another so-called Cash for Clunkers program, he said the program "makes sense."
"One role of government is to go where venture capital won’t," he said. "We not only won’t get another Cash for Clunkers, but we’re having trouble keeping our friends on the other side of the aisle from doing away with what’s left of the seed money for innovative technologies that bring billions off the sidelines."
Biden said GM is on schedule and is expected to hire back the last of the laid-off workers by year’s end.
"No one ever thought we’d get there," he said.
“GM plans to hire back all of the workers they had to lay off during the recession,” the vice president added.
Since 2006, GM has trimmed down its workforce. The workers up for rehire amounts to about 9,600 who were laid off in the fourth quarter of 2008. About 4,100 were let go for several weeks while the remaining 5,500 were put on indefinite leave.
Through the early part of the summer, all but 1,000 have returned to work, and the rest are expected to be back on the job by year’s end, GM spokesman Greg Martin has said.