The bailout of the auto industry initiated by President George W. Bush and expanded on by President Barack Obama was “the right thing to do,” longtime auto executive Dick Dauch tells Newsmax.TV.
Dauch, the chairman, CEO, and co-founder of American Axle and Manufacturing, is the author of a new book, “American Drive: How Manufacturing Will Save Our Country.” Dauch was working for Chrysler when the United States initiated its first auto bailout in 1979 when it gave the company a $1.5 billion loan.
Watch the exclusive interview here.
He noted that under the leadership of Lee Iacocca the company was resurrected in four years and the money paid back, adding, “it was a very huge good investment.”
“The present investment was one that was really initiated by President Bush and then greatly expanded by President Obama,” he said. “At the time it was the right thing to do and now it’s important for them to pay the American people back, the taxpayer back and that’s still quite a hurdle for those that are owned by the United States Treasury like General Motors, still 30 percent owned by the U.S, Treasury, and also the UAW has a huge equity stake in there that was provided to them.”
He said the key now is for the auto industry to get back to a point where it can stand alone and be independent and for Washington to enact “policy reformation that takes away this 20 percent disadvantage of cost against America versus our nine most favored trading nations.”
“I’m talking about employee benefits such as health care and or pension and third I’m talking about things such as tort legal costs, our tort costs here are 300 to 400 percent higher than any other nation we’ve got because of this culture and litigious society,” he added.
Regardless of the bailout, Dauch said the American auto industry has “absolutely become world class” in the things that we had difficulties with in the previous 30 years such as “quality and productivity and design, modernity, fuel efficiency, safety, the whole value package.”
Dauch said the most important thing learned in his manufacturing career was building the workforce.
“So I’m a great believer in people, I’m a great believer in the individual and building a workforce in an organization is number one priority, so that’s the first thing I learned is we’re in a people business,” he said. “The second most crucial thing is that you never ever want to lose your modernity as it relates to product portfolio and offering cause that’s the only thing that buying consumer public gets is your product.”
He said that in order to compete in today’s global economy the United States needs to “restore America’s absolute global leadership in manufacturing as our top economic priority.” He said to do that business tax must be reduced, “they’re far too high.”
“We need to take them down at least10 to 12 percent so we can have ability to compete with these other folks on their global scale of tax,” he said.
To keep the American automotive industry competitive the “bloated cost structure has to be eliminated or brought under control,” he said.
“The number one issue is no longer quality issue where it was for decades, number two is not design and modernity, we’ve got very sophisticated cars, trucks, by segment subcompact, compact, intermediate, full size, luxury, full size trucks, SUVs, CUVs, you name it we have fabulous designs, fabulous package ability, fabulous productivity, very good affordability, good quality, good service, what we’ve got to do is get that cost structure under control most of which is by policy that has to be reformed,” he said.
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