Q Mr. President, my name is Ellie (ph). I’m from Maryland, but I’m originally from Michigan. I have family members who work for GM and Ford. I know the top executives have made — of the auto companies — have made a lot of bad moves over the years, but I can’t imagine the suffering that we would see in the Midwest if these companies went under. So my question to you is, what specific steps do you see your administration taking about the health of the auto industry?
THE PRESIDENT: Okay. It is a very topical question because I’m going to be making some announcements over the next several days about the auto industry. I don’t want to make all the news here today, so I’m not going to be as specific as you’d like, but I guarantee in the next few days you will have a very extensive answer on what we need to do.
Let me give you my general philosophical approach, and that is that we need to preserve a U.S. auto industry. I think that’s important. I think it’s important not just symbolically; it’s important because the auto industry is a huge employer — not just the people who work for GM or Ford or Chrysler, but all the suppliers, all the ripple effects that are created as a consequence of our auto industry.
But my job is also to protect taxpayers. And you’re right — there’s been a lot of mismanagement of the auto industry over the last several years.
Now, right now we are in such a bad crisis that even Toyota is losing a whole lot of money. So typically you’re looking at $14 million — or 14 million new cars are sold every year. Is that right, Jared, in an average year for our population? It’s gone down to 9 [million]. Everybody has pulled back — partly because the credit-crunch people couldn’t get auto loans; people were worried about, am I going to keep my job, so they decided let’s put off buying the new car. The point is, is that you’ve seen this huge drop-off. So every automaker is getting killed right now.
I think it is appropriate for us to say, are there ways that we can provide help for the U.S. auto industry to get through this very difficult time — but the price is that you’ve got to finally restructure to deal with these long-standing problems. And that means that everybody is going to have to give a little bit — shareholders, workers, creditors, suppliers, dealers — everybody is going to have to recognize that the current model, economic model, of the U.S. auto industry is unsustainable. Even if sales go back to 14 million, which eventually they will, it’s still a model that doesn’t work. Just trying to build more and more SUVs and counting on gas prices being low and that’s your only profit margin, that’s just not a model that’s going to work.