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Former 'auto czar' defends bailouts

President Obama’s former “auto czar” said this week that the government had no choice but to bail out two of the Big Three major American car companies in 2008 and 2009.

Ron Bloom, the White House adviser who helped craft new vehicle mileage standards and the restructuring of the U.S. auto industry, said in an interview with The Detroit News that the outcome of bailouts given to Chrysler and General Motors has exceeded expectations.

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“The results are better than we had forecast,” Bloom told the paper. “The companies have done a better job on the cost side, on the product side and on the pricing side. That's all good.”

Earlier this spring, Democrats sought to make the bailouts, which were very unpopular when they were first initiated, into a political asset for President Obama as he heads into his bid for reelection next year. The bailouts began under then-President George W. Bush in 2008, but Obama managed them and is often more closely associated with them than is his predecessor.

Republicans at the time accused Obama of wanting to take over the American auto industry, but Bloom, who announced recently that he is leaving the White House, told the paper that the options for the companies were very limited.

“There was no — zero, zero, zero [debtor-in-possession] financing available for a company of this size,” he said. “The idea that there was a free lunch solution, I think, is just really not anywhere near reality.”

In May, Chrysler announced it had repaid $6.7 billion in loans to the federal government and Canada, plus interest. General Motors made a similar payment in 2010, and around the same time as the Chrysler announcement, the company said it planned to invest $2 billion in its U.S. operations.

Critics noted, however, that the United States was unlikely to recover its outstanding $1.9 billion investment in Chrysler.