The evidence is at hand, and the government bailout of General Motors in 2009 hasn't turned out to be the death of democracy and the onslaught of socialism, as opponents claimed. In fact, it's working.
The successful General Motors IPO brings one of the biggest rubber industry customers back to being a publicly held company. And, lo and behold, it looks like the People's money, in the form of the $50 billion bailout, will be returned ahead of schedule.
Bailing out the auto industry was a tough sell. Free marketers, the Republican party, talk radio demagogues, and people who just don't like any government intervention hated when Obama and the Democrats saved GM and Chrysler from death. The fact that a million jobs could have been lost in a domino effect wasn't enough for many people—perhaps some of the same people who welcomed the bailout of the banks under the Bush administration.
In his new memoir, incidentally, Bush said the auto bailout had to be done, no matter who was president, with so many jobs at risk and the potential for an even worse recession possible. This from a former president who opposed Carter's bailout of Chrysler in 1979.
Automotive rubber component suppliers—not so much the Tier Ones, but the subcontractors—would have been decimated by the potential protracted bankruptcy by the two auto makers. If your major customer folds, you're in trouble, period.
If a bank bailout was necessary to save the nation's financial system and Wall Streets' bacon, then saving a key manufacturing industry that had a more direct effect on so many Americas was just as vital.
There was plenty of blood spilled in the GM reorganization. Plants closed, layoffs occurred, entire GM divisions were eliminated. Management heads rolled.
Today there is a new, publicly held GM under, hopefully, better management. Rubber industry automotive suppliers, from tire and hose makers to producers of NVH products, need GM and the other two Detroit-based auto makers to thrive if they expect to succeed themselves.