In his first televised interview since winning the election, President-elect Barack Obama spoke with Steve Kroft of CBS’s 60 Minutes about the potential bailout of the American auto industry. He also reminded the American people about the importance of breaking from their addiction to oil—despite the recent and dramatic drop in prices at the pumps.
Kroft: You have a situation right now where you have General Motors, which is in dire straits.
Mr. Obama: Yeah.
Kroft: May run out of cash by the end of the year, maybe by the end of certainly, if we believe what we read in the papers, by the time you take office.
Mr. Obama: Yeah. Well, let’s see how this thing plays itself out. For the auto industry to completely collapse would be a disaster in this kind of environment, not just for individual families but the repercussions across the economy would be dire. So it’s my belief that we need to provide assistance to the auto industry. But I think that it can’t be a blank check.
So my hope is that over the course of the next week, between the White House and Congress, the discussions are shaped around providing assistance but making sure that that assistance is conditioned on labor, management, suppliers, lenders, all the stakeholders coming together with a plan. What does a sustainable U.S. auto industry look like? So that we are creating a bridge loan to somewhere as opposed to a bridge loan to nowhere. And that’s, I think, what you haven’t yet seen. That’s something that I think we’re gonna have to come up with.
Kroft: Are there a lot of people that think that the country would probably be better off and General Motors might be better off if it was allowed to go into bankruptcy?
Mr. Obama: Well, you know, under normal circumstances that might be the case in the sense that you’d go to a restructuring like the airlines had to do in some cases. And then they come out and they’re still a viable operation. And they’re operating even during the course of bankruptcy. In this situation, you could see the spigot completely shut off so that it would not potentially permit GM to get back on its feet. And I think that what we have to do is to recognize that these are extraordinary circumstances. Banks aren’t lending as it is. They’re not even lending to businesses that are doing well, much less businesses that are doing poorly. And in that circumstance, the usual options may not be available.
Kroft: When the price of oil was at $147 a barrel, there were a lot of spirited and profitable discussions that were held on energy independence. Now you’ve got the price of oil under $60.
Mr. Obama: Right.
Kroft: Does doing something about energy is it less important now than…
Mr. Obama: It’s more important. It may be a little harder politically, but it’s more important.
Mr. Obama: Well, because this has been our pattern. We go from shock to trance. You know, oil prices go up, gas prices at the pump go up, everybody goes into a flurry of activity. And then the prices go back down and suddenly we act like it’s not important, and we start, you know filling up our SUVs again.
And, as a consequence, we never make any progress. It’s part of the addiction, all right. That has to be broken. Now is the time to break it.