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Obama’s Auto Industry Bailouts in 2009: Taxpayers Lose, Big Time

Posted on July 31, 2013

Despite surges in revenue and a catalog of new vehicles produced by the U.S. auto industry, taxpayers are still suffering from the 2009 bailouts, as General Motors (GM) would have to peddle their stock for $95.51 per share for taxpayers to break even, according to a government watchdog report published Wednesday. Even with a 25-percent spike in the price this year, that’s still well over twice what shares are selling for today, with the price currently lingering around $37 per share — meaning there’s little faith that taxpayers will break even on the nearly $50-billion GM bailout.

The inspector general for the Troubled Asset Relief Program (TARP) asserts that taxpayers are still at least $18 billion in the hole, which government officials insisted GM needed, to endure its bankruptcy restructuring in 2009. Since its escape from bankruptcy, the automaker has earned about $17.2 billion, and in exchange for its federal endowment, the government secured a bulky portion of the company’s stock.

Over the past couple of years, the government has slowly been liquidating its stock, with a target to fully retire its investment by April 2014; it still owns about 189 million shares, or about 14 percent of the company. But according to many experts taxpayers will remain the ultimate losers.

“There’s no question that the Treasury, the taxpayers, are going to lose money on the GM investment,” Special Inspector General Christy Romero, who delivered the July quarterly report to Congress, noted in a recent interview.

If the government sells its remaining GM shares for its current stock price, it would take in only $7 billion, putting taxpayers on the hook for more than $11 billion on the overall bailout cost. In addition to GM’s bailout in 2008 and 2009, Romero’s report continues, domestic automaker Chrysler was bailed out for $12.5 billion, which cost taxpayers nearly $3 billion.

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3 thoughts on “Obama’s Auto Industry Bailouts in 2009: Taxpayers Lose, Big Time

  1. For over half a century, I have believed it was unpatriotic, and bad overall business sense to buy a foreign car.

    Obama brought change, all right. He completely changed my mind about that.

    Thanks to the unions, Obama, and GM executives, buying an American car to help support the American car industry is like donating a $5000.00 bar of soap to help plug the leak in the Titanic. It was too big to "fail" too.

  2. vampwriterblog says:

    And the CEO of GM, who Obummer put in control when he illegally removed the old CEO said GM was committed to China! So we bailed them out and now they plan on having cars made in China?!! Wow, I guess the Unions that supported Obummer may wake up and have second thoughts…nah!

  3. Davnkatz says:

    I bought a GM car in 2008 (an HHR). It's a great car! BUT – the electronic key had to be replaced at a cost of almost $200. Needed a tire replaced a couple of yrs back. Dealer didn't have one in stock so I went to a tire co. and bought one. Dealer charged me two-times (once for checking the tire and then for mounting it). Needed new tires all around last fall. Chevy cost for four plus balancing and mounting? Almost $1,000.00. Sears cost for same thing? $448.00. Chevy cost for oil change? $78.00 + change. Quick-Change for same service? $21.00 + change. GM is cutting corners and charging outrageous prices for service. GM can now go bust (as well as Chrysler, Jeep, et al) for all I care. I also have a 2004 Dodge PU with about 37,000 miles. Have rarely driven it since obozo bought the company because it only gets about 14 mpg and costs a fortune to service. Looking to trade it for a VW or maybe a Honda. Ford still not government owned, but union has Ford priced way out-of-range.