Bush book says Obama told about motor industry bailout plan before he enacted it

Former President George W. Bush defends his US$17.4 billion ($22.2 billion) bailout of the US motoring industry in his memoir, Decision Points.

The Detroit News, citing an advanced copy of the book, reports that Bush knew he would bail out Chrysler and General Motors on November 11, 2008 - four days after GM announced it was teetering on the edge of bankruptcy.

Bush made the decision to rescue the troubled carmakers earlier than people realised.

In fact, the paper reports, Bush told then President-elect Barack Obama about his decision days before he informed his advisers.

Saying he had to "save American workers and families from widespread collapse", Bush also considered his successor in the decision.

"I told Barack Obama that I wouldn't let the automakers fail," Bush writes. "I won't dump this mess on him."

Bush says he favoured the US$25 billion retooling plan sought by the carmakers but it was shot down by Senate Republicans.

He circumvented Congress by diverting funds from the Troubled Asset Relief Programme, originally intended to rescue Wall St. "Nobody was more frustrated than I was. While the restrictive short-terms were better than an outright bailout, it was frustrating to have the automakers' rescue be my last major economic decision."

But in the end, Bush writes, he had little choice. "With the market not yet functioning, I had to safeguard American workers and families from widespread collapse.

Bush blames the car industry's woes on decades of poor management.

"They had been slow to recognise changes in the market. As a result, they had been outcompeted by foreign manufacturers in the product and price."

He also discloses that he rejected a request for a bailout before the 2008 presidential election from then-GM chief executive Rick Wagoner.

The former President says he reversed his stance that government should stay out of the car business when he saw how a bankruptcy would leave the economy.

"My economic advisers had warned that the immediate bankruptcy of the Big Three could cost more than a million jobs, decrease tax revenues by US$150 billion and set back American's GDP by hundreds of billions of dollars," he writes.

After taking office, Obama expanded the bailout, funnelling an additional US$60 billion to the industry while forcing GM and Chrysler to restructure under government-led bankruptcy.

- AP