- Taxpayers may never get back about $16 billion of the bailout money extended to Ally Financial, Chrysler, Chrysler Financial, General Motors, auto suppliers and used to guarantee warranties, says a new White House report.
- The report says that as of June 1, $40 billion out of $80 billion has been returned to taxpayers.
- It also says that the Treasury's loss estimates have "consistently improved — from more than 60 percent in 2009 to less than 20 percent today."
WASHINGTON — Taxpayers may never get back about $16 billion of the bailout money extended to Ally Financial, Chrysler, Chrysler Financial, General Motors, auto suppliers and used to guarantee warranties, says a new White House report entitled "The Resurgence of the American Automotive Industry."
"The U.S. government provided a total of $80 billion to stabilize the U.S. automotive industry through investments in General Motors, Chrysler, Chrysler Financial, Ally Financial, and programs to support automotive suppliers and guarantee warranties," said the report. "As of today, $40 billion has been returned to taxpayers. While the government does not anticipate recovering all of the funds that it invested in the industry, the Treasury's loss estimates have consistently improved — from more than 60 percent in 2009 to less than 20 percent today."
The report comes ahead of President Obama's scheduled visit on Friday to Toledo, Ohio, to tour Chrysler's Jeep Wrangler plant. The report was issued on the second anniversary of GM's bankruptcy filing.
"Two years later, the American auto industry is mounting a comeback," said the report. "General Motors is expanding production and adding jobs, while Chrysler recently repaid its outstanding loans to the U.S. Treasury — six years ahead of schedule."
The White House is expected to capitalize on the auto industry's recovery as part of the president's reelection bid in 2012.
"The actions taken by this administration have laid the foundation for manufacturing's quiet resurgence, but we cannot be complacent," said the report.
Inside Line says: We're getting a clearer picture of the true cost of the auto bailout to American taxpayers.
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northsparrow says:
09:47 AM, 06/04/2011
mk40 says, " I hope the UAW fully cooperates and becomes cost-competitive with foreign rival's factories
in the US ........"
Let's see, the new hires making the Chevy Chronic (Sonic) will make take the bus to work or ride a bicycle
because they will only earn $14 per hour.
Is that your winning formula for the future economic success of the USA , all workers earning Cracker wages ? If that does not work will you bring back share-cropping ?
mk40 says:
01:12 AM, 06/04/2011
only $16Bil loss is pretty good, but only if the Big 3 win in the marketplace and survive... Only time will tell. I hope the UAW fully cooperates and becomes cost-competitive with foreign rival's factories in the US so the Big 3 will have that much better chance of beating the competition & not just compete with each other but competing well against import brands, taking marketshare away from foreign automakers with great price/cost-competitive products. I also hope for product improvements to give customer everything they want... the best of both worlds... I hope they can make those big vehicles that are very profitable for them much much more efficient.. the technology is available to do that.. advanced clean diesel. There's no reason why those vehicle can't be alot more efficient at the prices they go for. The price can absorb the cost of such technology.
smallfield says:
06:06 PM, 06/03/2011
"Well worth it, provided GM and Chrysler keep putting out cars people want to buy. Maybe they can offer Americans a "Thank You, America" rebate towards the purchase or lease of a new car. Walk into a dealership with your 2008 1040 (the year TARP funds were allocated, I believe) showing that you paid Federal income taxes of at least $500, and get a $500 rebate towards your new car."
Ha! Only about half of Americans would qualify.
Can we make it proportional to the taxes you paid? I never understood this tax the rich thing when only the richest half pay any federal income tax at all. Probably should collect from everyone if you are going broke.
Auto bailout turns out to be a good investment. Iraq, Afghanistan, Medicare part D - we'll see, I bet not. Hindsight 20/20.
supra4 says:
05:22 AM, 06/03/2011
For perspective, Fighting in Afghanistan costs our government a billion (1,000,000,000) dollars a week, Iraq was almost 3 billion a week in 2006.
dgmail says:
03:20 AM, 06/03/2011
I wonder how much money Sen. Johnny boy McCain and friends lost, when they couldn't put their "get rid of GM and Chrysler" plan in place?
Do the Japanese companies that padded their coffers want their seed money back too?
litewerk says:
12:38 AM, 06/03/2011
I'm not gonna say anything pro nor against the auto industry. What I'm looking at is Congress, the branch of our Government which passes legislation and appropriates the spending of money (our money). They don't make any effort to live within their means, as we or any business has to. There is absolutely no accountability to us, the taxpayers, when they spend our money. No balance sheet that keeps track of things to honestly and accurately let us know how we as a country are doing. And where all the millions, billions, and trillions of dollars has been going. It just seems that what is lacking is a level of resposibilty and accountablity.
The more I've paid attention to what really goes on I've learned that for the most part, the politicians need money, lots of money to get elected, then re-elected. Then it's essentially a quid pro quo where they have to do favors for who they really represent. Not us, but the big businesses, political action committes, special interest groups, and wealthy donors. So that, in the end, they pass legislation favorable to whoever financed their campaign. It's only around election time when they recognize a need to attempt to care about and do things for us, the taxpayers - and even those citzens who don't pay taxes - in order to get re-elected.
Bottom line is, what we were taught in school is NOT how things really work.
calspecial68 says:
12:08 AM, 06/03/2011
I know this auto bailout greatly contributed to saving our economy, I just hate the idea of the whole system being held up by something so superficial as $16 billion. Not to mention all the bailout money used on Wall Street. That much money being thrown around left and right is asking for trouble later on. Call me stupid, but I think people aren't looking far enough down the line when praising this whole thing. I could go on, but I would fill this whole article up.
morrisg2 says:
11:58 PM, 06/02/2011
Close your eyes and think about this for a moment: all the GM dealerships in your town are gone... closed empty buildings. All the Chrysler, Dodge and Jeep dealerships, same thing. All the parts factories that supplied those automakers, closed up and empty, too. Fewer trucking firms running because those parts aren't getting moved from source factories to assembly plants. Less freight on the railways. And on and on and on.
Yeah, we haven't gotten all the bailout money back yet, but a lot of bullets have been dodged because the US Government backed those car companies. The worst part will be having to listen to all those clueless politicians b--ching about these loans for a full year before the 2012 elections.
skw0123 says:
11:03 PM, 06/02/2011
Aside from allowing GM and Chrysler to live another day, the bailout also saved dependent suppliers which could have folded if the factories had stopped...the reverberations throughout the economy were a serious consideration. Ford didn't get bailout money, but it was a financial basket case and a production shutdown could have finished them if the automotive supply ecosystem collapsed. It's easy to imagine lots of nightmare scenarios that never came to pass. All that said, I never expected Chrysler to ride this out...I thought they were dead for sure.
hollowtek says:
10:13 PM, 06/02/2011
I've said everything that's been said here when this all started. So... I told ya so :)