Witnessing the Auto Industry Bailout

Floor Speech

BREAK IN TRANSCRIPT

Ms. STEVENS. Mr. Speaker, it is a privilege to be on the House floor this evening, this Valentine's Day, collecting my thoughts and remembering a bit of history.

We had quite the whirlwind year last year in Michigan and in this country. As I think about the fall, we were preparing to appropriate fiscal year 2024's authorizations, and we were stalemated and still in a continuing resolution of funding the government.

At the same time, we were also witnessing our United Auto Workers union set forth a record strike effort, targeting all of the Big Three for what they dubbed as record profits, meaning a record contract. That was, in many respects, a whirlwind time period. Then, to add to it, our beloved ally in the Middle East, the only democratic nation in the Middle East, Israel, was attacked.

Members of Congress, residents in Michigan, and people across this country, our heads were certainly spinning in many respects. For those of us tied to the auto industry, we were looking at the strike that took place, and we were being reminded of a little bit of history. We were being reminded why the UAW, at that moment, was saying we have record profits in the auto industry, but now we are looking for a record contract, because 15 years ago, the UAW made major concessions.

They made major concessions during a strategic effort led by the Obama administration and carried over from the Bush administration. The Bush administration said we are going to leave this to the next administration for how we make decisions impacting the auto industry.

Fifteen years ago, we were in the wake of the Lehman Brothers crash. We saw our economy spinning out of control, unemployment shooting up in ways that we hadn't experienced as a country since the Great Depression. We had pressure on our insurance industry and our housing sector. We had a foreclosure crisis, and then we had the unbelievable challenges that were facing our auto industry.

The Troubled Asset Relief Program was passed through this very Chamber at a time when I was on the campaign trail. I was working to elect the next President of the United States of America. This very Chamber, under the leadership of then-Speaker Pelosi, passed the Troubled Asset Relief Program to stabilize our financial sector that had gotten in trouble due to lack of regulation, to stabilize the insurance industry, to stabilize the housing sector, and some emergency relief dollars for the auto industry, which President Bush gave in a temporary fashion and then said, very famously, whoever is elected President will inherit the ability to make the decisions.

We know that in this country, we used to have a longer transition process. Presidents would get elected in November and then be sworn in in March. Now, you get elected in November and are sworn in in January.

I had the very sincere privilege of working on President Obama's campaign. I was in the policy operation for the Vice Presidential nominee, now President Biden, then-Vice Presidential nominee Joe Biden. President Obama won that election. We were in Grant Park. Then, the next day, the transition began with the Presidential transition team.

It was the year 2008, which is kind of an interesting moment because the internet wasn't as populated with the vast amounts of information it has today. As a young 20-something-year-old, I was working on this transition and hearing about people looking to go into the administration and really having very little understanding of what that meant.

As a daughter of Oakland County, Michigan, as a family member of a former Chrysler engineer who worked on some of the original designs for Jeep, and as a granddaughter of a Ford UAW member, I couldn't help but take the time during lunch breaks, or breaks in the schedule while working on that transition operation for President Obama, to look at the Detroit Free Press, to pause and try to get a sense of what was going on back home because it was head spinning. From September 2008 to January 2009, we were absolutely in a pressure-cooker moment.

You have a brand-new President, a whole new administration, including 8 years of the Bush administration, an Iraq war that many Americans disagreed with, and some true injustices that were taking place back home in my home State. I couldn't help but humbly think that maybe I should go home to Michigan and try to help these automakers, try to help these autoworkers.

In Michigan, we were, in many respects, the example of what was taking place in this Great Recession. It was a capital G, Great Recession, capital R. It was a major challenge for us.

It was not just ``for sale'' signs in front of people's homes. It was massive foreclosures and people wondering if they were going to have their job in the auto industry, an absolutely unprecedented economic whirlwind taking place.

To shine some light on this, what happened to our Big Three automakers, General Motors, Chrysler, Ford--we call them the Big Three. We all know that. The Big Three had 71 percent of market share for the auto industry in 1998, and it dropped to 47 percent in 2008, in 10 years. We saw a dramatic decrease in car sales. We saw a shoring up of capital.

This was pre-Affordable Care Act. They had large responsibilities for healthcare obligations, the right obligations, to workers who had paid their entire lives for that benefit.

We faced the very stark reality that these companies were maybe not going to survive and, with them, millions of jobs.

As it became apparent that President Obama was going to put in place a senior counselor in the Department of the Treasury under these emergency authorities to manage the auto rescue, I had the opportunity, while working on that transition operation, to introduce myself to that individual whose name is Steve Rattner. He was in need of a chief of staff. He received a recommendation to interview me. It was a frenetic time. It was a several-minute interview. I was hired. I was brought in as a political appointee.

We were set up in temporary office space in the U.S. Department of the Treasury, which is right next to the White House on East Executive Avenue over there.

Steve Rattner and myself and some individuals from the National Economic Council and the Council of Economic Advisers, people like Brian Deese, Alan Krueger, Austan Goolsbee, Gene Sperling, Diana Farrell, and, of course, Larry Summers, who was leading the NEC, created a makeshift team.

We realized we needed to hire a team, by the way, but it was kind of a makeshift team to make a series of rapid recommendations to the President of the United States about what to do with General Motors and Chrysler because they were running out of money. They were staring liquidation in the face. It was 15 years ago this month, my friends, 15 years ago this February.

Now, as a kid from Michigan, to be in a room in the United States Government and to hear the words ``GM in bankruptcy'' in a sentence was almost inconceivable. It was unfathomable. It was nerve-racking. It was hair-spiking. It was stressful.

Because of the good faith efforts to ensure the ethical standards of the administration, President Obama had put into place some rules of the road. You couldn't hire people directly out of the auto industry to help run the auto rescue because it is a conflict of interest. We were talking to various candidates, various individuals of talent, and then a name popped up, Ron Bloom. Ron Bloom had been working alongside the national leadership of the United Steelworkers and had a Harvard MBA, a laborer's heart, and a laborer's mindset. He joined as Steve Rattner's deputy.

We also brought on board a man from New York named Harry Wilson, who had a deep background in restructuring and financials. He was so talented, he retired by the age of 40. Matt Feldman was a bankruptcy lawyer. So much of this is captured in a book that Mr. Rattner wrote called ``Overhaul.''

So much is still to be remembered from this time period that books and photos couldn't capture.

I have been a part of a lot of incredible history since arriving in Congress in 2019. I have worked on things that I couldn't even imagine I would have the ability not only to work on but to get done: a renegotiated trade deal, USMCA, and a Chips and Science bill.

My first bill signed into law was the Building Blocks of STEM Act within my first year in Congress in 2019. I formed the first Women in STEM Caucus. I was running the Democratic Manufacturing Working Group alongside our assistant leader, Jim Clyburn. Although he is a longtime Representative from South Carolina, he has an appreciation and an affiliation with his colleagues from Michigan and shares in the spirit of what doing good manufacturing policy means for this Nation.

You see, Mr. Speaker, at the time we were doing the auto rescue, none of this was assured. None of this was guaranteed. This was new policy. It was taxpayer money that came from TARP, the Troubled Asset Relief Program. It was a temporary ownership structure in General Motors and Chrysler. Ford had made some very good decisions 1 year and change prior, 1\1/2\ years prior. They weren't in need of a rescue.

At the time when we were putting together these series of recommendations which ended up becoming a managed industrial bankruptcy and an ownership structure of General Motors and Chrysler without controlling the day-to-day management of the companies, we were hearing from stakeholders, we were hearing from interested parties, and we were hearing from constituents.

Much of this is documented. It was not new information that we had interested buyers in General Motors from the Middle East. We looked at some of Chrysler's ownership structure and their previous Federal investment that they had received. We were hearing from very concerned mayors and municipal leaders primarily across the Midwest, mayors from automotive communities who knew that these factories were the lifeblood of the economic existence of that very town.

What was going to happen?

Suppliers were wondering if they were going to get paid for work that they had done on the front end, expecting it as the system goes and the supply chain, the automotive supply chain, with receivables and payment structures.

We had the Canadians at the table equally concerned, again, about a potential liquidation of General Motors and Chrysler and the jobs that would come with it.

So, of course, not only did our United Auto Workers come to the table, but also the Canadian counterpart of their autoworkers' union came to the table alongside the Canadian Government. The Australians were calling: General Motors might go bankrupt.

Now we were in a unique moment because we had allocated dollars through TARP to say: We can make this investment.

The President was able to do this alongside his Cabinet and alongside our Treasury Secretary, Timothy Geithner. GM stock price went to zero. Chrysler became co-owned by Fiat and the UAW.

The United States Government didn't want to control the day-to-day management of these companies. Car sales were in the gutter.

How do you incentivize people to buy cars when our economy is spinning out of control and people are losing their lifetime retirement in a stock market that was crashing?

So we also made a series of decisions to say that we are not going to leave behind the small businesses. We are not going to leave behind the supply chain that is being challenged and squeezed and that is also experiencing bankruptcies, liquidations, and mergers. We created a supplier support program that just provided assurance similar to what we did in a bipartisan way during another economically and more recent time with COVID-19, just providing assurances through allocated dollars. In the case of COVID-19, the Fed had stepped in largely not drawn down on but money that came from the CARES Act to stabilize our industrial sector.

During some of these interesting and stressful times 15 years ago while working as a staff member of the auto rescue team during very long days and oftentimes sleepless nights, overnights at the Department of the Treasury, I had instructed those who controlled the switchboards at the White House and at the Treasury Department to take the calls from concerned Michiganders and from concerned Midwesterners and just wire them through to my office because these people were scared. They were worried, and they saw themselves losing everything that they had ever worked for.

So in these long, trying, and stressful days we would walk into the office, and every day The Wall Street Journal, The Washington Post, The New York Times, and I think the Financial Times was also there, were laid out on the front desk for all to see, and every single day, the work that we were doing was on the front fold of these newspapers.

Mr. Speaker, do not forget that because this was unprecedented economic action.

I also want to mention that this wasn't just done in a partisan vacuum. You see, Mr. Speaker, when we walked into the halls of the Treasury, weeks--weeks--after President Obama in a very momentous and celebratory way was sworn in as the 44th President of the United States of America while his Cabinet appointees were just getting confirmed, we didn't have as much partisan discord around confirmations.

There were individuals like Neel Kashkari, Jim Lambright, and several others who had had appointments and posts in the Bush administration at the Department of the Treasury. The financial crisis with Hank Paulson as the Treasury Secretary under Bush was very well-documented. Nonetheless, there were individuals who were working under Bush who stayed on for continuity purposes to explain why things were written a certain way or procedures were happening as TARP was being administered to work alongside us.

Members of the team that we put together under Steve Rattner and Ron Bloom weren't partisan. They weren't political appointments. Steve, Ron, and I were the only White House appointees on that initial auto rescue.

This was the best of our country who stepped forward through long, sleepless, and tireless nights working in Excel, managing a host of stakeholders, and sending memos and recommendations to the White House and the President of the United States himself. There were deadlines that had been put into place by the previous administration.

Interestingly, foreign automakers have a presence here in the United States of America. I am personally a Big Three girl coming from Detroit, and I encourage all to look at the benefits and prospects of what the UAW brings with their best-in-class workforce. I am so proud of our UAW workers, particularly my Region 1 workers back home in Michigan.

The foreign automakers came to us and said: You cannot let these companies go bankrupt. You cannot let them fail.

Why would competitors say that in such a moment?

It is because of the supply chain, it is because of the disruption, and it is because of the ricochets. Car sales were eight, nine million. Now they are back up to 17, 18, and 19 million. We never thought we would see million. We never thought we would see those numbers.

All along the way, as these phone calls were coming into our office and as I would carve out the time on Friday nights to return those calls, grown men were breaking down in tears frustrated by what was happening to our country and what was happening to what they had spent their lives working towards. These were amazing small businesses that contributed so much to our auto industry.

One in particular was an individual who owned a small tool and die shop, a third-tier supplier. He made a point of calling me a couple of times. He was one of the ones who wanted the assurance that he was going to get paid on his receivable, his 36-month life cycle. I talked to this individual a couple of times.

Then one time he said: Do you think I could come visit you in the Treasury Department? Could I come meet with you?

The perspective I have always taken into public service is absolutely inclusive and open government. Plus, we were meeting with everybody at that time because everyone was wondering what was going to happen.

Again, this wasn't guaranteed. It wasn't going to be a guaranteed success, and there were tough things that were happening like dealerships closing.

Why?

It was because GM had seven times the dealerships of Toyota. They were winding down two nameplates which, by the way, when they wound down Oldsmobile years prior to this auto rescue period, it was a $2- billion endeavor.

So my supplier asked to come visit.

I said: Absolutely. We have some talented young people on this team, and we would be happy to meet with you. I will take your meeting.

Of course, the Treasury Department, being part of the White House campus, is a Secret Service monitored building, Mr. Speaker, so you have to make sure that you get all the proper information and then get into the system. Then the Secret Service has to call you the day of the meeting, as they did the day my supplier was there, and say: Hey, your appointment is here, please come get him and escort him.

I walked up those hallways with those marble checkered floors and the beautiful, framed dollar bills and $2 bills and some of the moneys that are in the Treasury Department.

And who am I?

I am just a humble Michigander trying to do right by my State, do right by the people I love, the people I didn't even know who were relying on this industry to succeed to keep going. They are the industrial heartbeat of America.

I get up to the Secret Service desk, and they are chuckling a little bit. They are laughing a little bit.

They said: Haley, your appointment is here.

There was the supplier. He was this wonderful man standing there holding 12 pounds of metal because he drove from Michigan to show us what he made and to show us what he was doing and how he was contributing.

Of course, I believe it was Clay Calhoon or Brian Osias or Sadiq Malik, one of these individuals, when I said: Come on, we are coming in for the meeting, they said: Haley, what meeting are you bringing us to?

I said: This is someone who wants to know if his government has his back.

That is the type of work that we bring into Congress now at all the meetings we take, all the constituent requests, all this and that that we are working on here that is impacting and shaping the everyday lives of so many.

We don't need to focus today, 15 years on, exclusively on the hardship of the Great Recession and the economic tailspin that came about at the beginning of this century. In fact, today, I think we can look back and feel very proud that bipartisan action, nonpartisan action, and a commitment and willingness to government and to govern successfully did succeed for the American people.

I think we can look out and see that this century has been full of unique, unprecedented, and defined-by-the-moment challenges.

There is a small business in Birmingham, Michigan, that sells linens. I was talking to the shopowner. I said: How are you doing? He said: It has been exhausting. I opened my business in 2000. We had 9/11. We had the Great Recession. We have had COVID-19.

Yet, he sees through every single one of these global curve balls that get thrown at us, particularly those of us as Michiganders. We have known how to rise to the challenge. We have known how to be resilient.

Mr. Speaker, I believe you remember these headlines: Who is going to shut out the lights in Detroit?

They were singing our swan song. We had a city on the brink. We had a city that felt like it was ripping at the seams. Then we doubled down. We collectively reinvested, and we said we have a new story to tell. Hence, the story of the American worker.

Today, nearly 15 years on, the UAW negotiated a historic contract, and I believe there is more to come. Plants that had closed, and tiered structure for payment--we can see an industry that is ushering in the moonshot of this century, the new mobility technologies being innovated in southeastern Michigan through so many suppliers and larger manufacturers, even down to the smaller businesses.

The innovation, the manufacturing, the technology just seethes through the place I call home, Auburn Hills. It is a community in Oakland County, Michigan. Look around, we have the largest robot in the world headquartered in Auburn Hills. It is absolutely remarkable.

You look out at the new product lineups that the men and women who are making these cars are rolling off the line. You better not look while they are driving because you might swerve a bit because they capture your eyes and your attention. There is so much R&D going into every vehicle, some say it is a billion dollars into every car, a billion dollars of R&D: the quality, the testing, the safety, and the emissions.

Michigan is home to the place that put the world on wheels. Here we still stand as an envy for the world.

I am so proud of what was accomplished in the Obama administration and carried forward into the Biden administration. It was accomplished in the Obama administration during this unique and trying time, the Main Street effort of the economic agenda: the manufacturers, the communities that were relying on it, and a government that made money on that investment. They were repaid in full.

GM reentered the stock market. We were a part of that. We called that Auto Team 2.0. Ron Bloom was the President's senior counselor for manufacturing policy. People like Alan Fu, Kelly Morrell, and Greg Keilin were making recommendations that actually have carried forward throughout all of the administrations since--the National Network for Manufacturing Innovation, research efforts from upstate New York to Youngstown, Ohio, all the way out to California. We have one in Michigan. It is called LIFT. They are doing lightweight metals and workforce development, new standards, chemicals, and testing for the DOD.

We are competing because we made a commitment to our industrial base. We are not over here in the United States of America saying we are going to have state-owned enterprises. That was not the goal in the auto rescue. The goal was public-private partnership.

I meet with these manufacturers every week. It is the effort of sanity in this job, real people doing real work. They don't care what your ideology is or what your affiliation is politically. They are producing product off the line and getting it somewhere on time, whether it is in Michigan, Canada, or over to Europe. They are meeting every roadblock that gets thrown at them. It is absolutely remarkable. It happens in the place that I call home.

Mr. Speaker, we can say bipartisan in this Chamber. We can absolutely say bipartisan. Let's talk about the things that bring us together. Let's talk about a manufacturing economy. Let's talk about real industrial strategies. What we did with Chips and Science--$52 billion.

By the way, in those very auto rescue meetings with Steve Rattner, Ron Bloom, Larry Summers, and President Obama, we talked about these very weaknesses with semiconductors. We knew then we needed to do something. COVID hit, and there was a chips shortage, a chips crisis. Of course, I slammed my fist down on the table so hard I nearly bruised it when we didn't have a CARES Act, when we didn't have a rescue act, when we didn't have a plan for the industrial sector of this country, which we as lawmakers then came up with.

It is not just about being a First World nation but being an innovative nation. Public-private partnerships work. We don't will for another Great Recession and another action like what we had to take with the auto rescue. We can look back and say that the government acted alongside the workers of this country.

We can look even now, a year and change on since the passage of the CHIPS Act, a large-scale investment saying that we are actually going to make chips in this country again. We are going to do it with union work, by the way. We are going to do it in places like Michigan and Ohio.

We innovated the chip, and then it was shipped overseas. Incentive structures, beating us at our own game, low labor costs, and then what?

We are over-reliant on unfriendly markets, high shopping costs, and energy demands. The government with the CHIPS Act, $52 billion allocated, not all of it has been nearly spent or begun to be spent. We are so proud of the chips team's hard at work at the Department of Commerce, resembling, I believe, what took place in the auto rescue because these are very hardworking individuals doing big things with long hours and long days.

That $52 billion beget $200 billion of private-sector contribution without it being required. That legislation paid for itself within a quarter.

Fifteen years on from the auto rescue and as lawmakers, we ask ourselves: What is next?

It wasn't just chips. It is not just semiconductors that we need to bring back here to the United States of America, critical minerals and critical materials. Our environmentalists are talking about permitting reform to achieve the energy revolution of the quarter 21st century that the Inflation Reduction Act is helping to usher in.

Yes, we will beat the game at this. We will renovate. We will do big things. We will succeed. We will lower carbon emissions as a result. The auto industry stepped up. We saw that day arrive. Environmental groups and the auto industry said: We want this bill. We want the Inflation Reduction Act.

The next phase must turn to the industrial policy model that had been adopted under the CHIPS Act for minerals, materials, quantum, and AI, all these exciting and great things. It is a strategic vision for this Nation.

President Biden will be in this very Chamber in less than a month's time, delivering his State of the Union Address, delivering that strategic vision built and building off the successes that we have achieved in many bipartisan ways: infrastructure, chips, and veterans' assistance and benefits.

Where are we going, and how will we continue to be a beacon for this world?

I believe it exists in the place that I humbly and dutifully call home in southeastern Michigan, Oakland County, Michigan. It is home to Automation Alley. It is home to Chrysler's now namesake, Stellantis. It is home to countless men and women of the UAW and the building trades unions, those who are putting the pipes in the ground for hydrogen to succeed. We are looking at battery-electric vehicles.

Be optimistic, my friends. Be proud.

BREAK IN TRANSCRIPT

Source