Ford: Why the Bailouts Were Actually GOOD
Ford Motor (NYSE:F) chief executive Alan Mulally said the federal government’s bailouts of rivals General Motors (NYSE:GM) and Chrysler were “the right thing to do” and that the action had indirectly also helped his company. Mulally said that had GM and Chrysler failed, it would have wiped out the auto industry’s entire supply network.
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“If GM and Chrysler would’ve gone into free-fall they could’ve taken the entire supply base into free-fall also, and taken the U.S. from a recession into a depression,” Mulally told Yahoo Finance. “That’s why we testified on behalf of our competitors even though we clearly did not need precious taxpayer money.”
Mulally had testified before the Senate Banking Committee in November 2008 and expressed his support of the rescue. A recent Harris Poll found that 45 percent of Americans believe the government’s rescue of the two automakers “helped” the U.S. economy.
While Ford was “disadvantaged” by having to pay back its debts, the boost to the industry, as well as the intangible benefits to Ford were worth it, Mulally said. “I’m very proud Ford was able to do it without a bailout,” he said. “Everybody watching the hearings could see GM and Chrysler were bankrupt … But they also saw Ford was not and then they started checking out Ford. They started seeing all these new vehicles, best in class.”
Mulally said two weeks after the hearings, 74 percent of Americans said they would consider Ford for their next car purchase.
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