Auto bailout loss put at $14B; Obama
pleased, had expected closer to $48B
By Jim Kuhnhenn
Thursday, June 2, 2011
WASHINGTON - Taxpayers will lose about $14 billion in the government’s
$80 billion bailout of Chrysler and GM, the White House said yesterday,
portraying the outcome as good news because the losses are far lower
than originally anticipated.
Seizing on the figures, the Obama administration took credit for the
resurgence of the U.S. auto industry, assuring taxpayers that the
government’s bailout of Chrysler and GM was an investment worth making.
A report by the president’s National Economic Council noted that as
Detroit automakers rebound, taxpayers’ loss from the bailout will be
about $14 billion, or less than 20 percent of the $80b illion that the
Bush and Obama administrations used to prop up the companies in 2008.
The Treasury Department had expected losses closer to 60 percent.
Vice President Biden and Treasury Secretary Timothy Geithner have both
promoted the government’s GM and Chrysler interventions as risky moves
by President Barack Obama that paid off.
Obama is making the most of Chrysler’s announcement last week that it
is repaying $5.9 billion in U.S. loans and a $1.7 billion loan from the
Canadian government ahead of schedule. Those payments cover most of the
bailout money that saved the company after it nearly ran out of cash
and went through a government-led bankruptcy.
General Motors Co., which also went through bankruptcy, received $49.5
billion in the U.S. bailout. The federal government has lowered its
equity stake in the company from 61 percent to 26.5 percent after
selling part of the stake in November. Ford did not seek federal
assistance.
The National Economic Council report said that since GM and Chrysler
emerged from bankruptcy last year, the auto industry has created
115,000 jobs.
Read it at the Columbus Dispatch
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