Decision Points

had been experiencing problems for years. Decades of poor management decisions had saddled automakers with enormous health-care and pension costs. They had been slow to recognize changes in the market. As a result, they had been outcompeted by foreign manufacturers in product and price.
    When the economy took a hit, auto sales dropped. Then the freeze in the credit markets stopped almost all car loans. Auto company stocks were battered in the stock market collapse of September and October. Their cash balances dwindled to dangerously low levels. They had little hope of raising new funds in the private markets.
    In the fall of 2008, GM CEO Rick Wagoner started pressing for federal help. He warned that GM would fail, and then the other automakers would follow. I didn’t think it was a coincidence that the warnings about bankruptcy came right before the upcoming elections. I refused to make a decision on the auto industry until after the vote.
    Six days after the election, I met with President-elect Obama in the Oval Office. Barack was gracious and confident. It seemed he felt the same sense of wonderment I had eight years earlier when Bill Clinton welcomed me to the Oval Office as president-elect. I could also see the sense of responsibility start to envelop him. He asked questions about how I structured my day and organized my staff. We talked about foreign policy, including America’s relationships with China, Saudi Arabia, and other major powers. We also discussed the economy, including the auto companies’ trouble.

    With Barack Obama.
White House/Eric Draper
    Later that week, I sat down for a meeting with my economic team. “I told Barack Obama that I wouldn’t let the automakers fail,” I said. “I won’t dump this mess on him.”
    I had opposed Jimmy Carter ’s bailout of Chrysler in 1979 and believed strongly that government should stay out of the auto business. Yet the economy was extremely fragile, and my economic advisers had warned that the immediate bankruptcy of the Big Three could cost more than a million jobs, decrease tax revenues by $150 billion, and set back America’s GDP by hundreds of billions of dollars.
    Congress had passed a bill offering $25 billion in loans to the auto companies in exchange for making their fleets more fuel-efficient. I hoped we could convince Congress to release those loans immediately, so the companies could survive long enough to give the new president and his team time to address the situation.
    My point man on the auto issue was Secretary of Commerce Carlos Gutierrez . Born in Cuba, Carlos had immigrated to Florida as a boy. His parents moved to Mexico, where Carlos took a job driving a delivery truck for Kellogg’s. Twenty-four years later, Carlos became the youngest CEO in that company’s history and the only Latino CEO of a Fortune 500 company. He joined my administration in 2005 and did an outstanding job promoting trade, defending tax relief, and advocating for freedom in Cuba.
    Carlos and the team pushed Congress hard to release the auto loans. We made progress in the House, but the Senate wouldn’t budge. The only option left was to loan money from TARP. I told the team I wanted to use the loans as an opportunity to insist that the automakers develop viable business plans. Under the loans’ stringent terms, the companies would have until April 2009 to become fiscally viable and self-sustaining by restructuring their operations, renegotiating labor contracts, and reaching new agreements with bondholders. If they could not meet all those conditions, the loans would be immediately called, forcing bankruptcy.
    The deal drew criticism from both sides of the aisle. The head of the autoworkers’ union complained that the conditions were too harsh. Grover Norquist , an influential advocate for fiscal conservatism, wrote me a public letter. It read, “Dear President Bush: No.”
    Nobody was more frustrated than I was. While the restrictive short-term loans were better than an outright bailout, it was frustrating to have the automakers’ rescue be my last major economic decision. But with the market not yet functioning, I had to safeguard American workers and families from a widespread collapse. I also had my successor in mind. I decided to treat him the way I would like to have been treated if I were in his position.

    One of the best books I read during my presidency was
Theodore Rex
, Edmund Morris ’s biography of Teddy Roosevelt. At one point near the