The federal bailout of General Motors and Chrysler cost U.S. taxpayers roughly $80 billion back in 2009, but only two years later, it appears Uncle Sam will get most of its money back. The Associated Press reports that the Obama Administration now estimates that the bailout will "only" cost taxpayers $14 billion. That's down significantly from the projected 60 percent loss estimated by the Treasury Department back in 2009, and the money is also expected to arrive much sooner than originally expected.

The Obama Administration released the more optimistic view of bailout payback prospects in advance of a visit by the President to a Chrysler plant in Ohio. Conveniently, Chrysler last week paid off its $5.9 billion in U.S. loans and $1.7 billion in Canadian loans, putting the bailouts back in the news, albeit with a positive spin. GM, meanwhile, has already paid back more than half its $50 billion in loans, and the government still holds a significant portion of GM stock, which it can sell to further cut the cost of the bailout.

Treasury Secretary Timothy Geithner points to the bailouts as a cornerstone of the resurgence of manufacturing jobs, adding "While we will not get back all our investments in the industry, we will recover much more than predicted."


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  • 53 Comments
      • 4 Years Ago
      [blocked]
        mikey683
        • 4 Years Ago
        Laser you know the UAW isn't an evil cabal it represents actual working Americans, remember them? The people republicans are so eager to strip of their rights? Republicans are responsible for the huge debt the U.S. has, then they have the nerve to blame unions? F.U pal! The auto bailout has been a huge success. it's saved hundreds of thousands of jobs. Isn't that what government is for?
        mikey683
        • 4 Years Ago
        Oh also Laser, you know FOX news isn't really news right? You have an internet connection, you don't have an excuse to be this stupid.
          • 4 Years Ago
          @mikey683
          [blocked]
          • 4 Years Ago
          @mikey683
          [blocked]
          Shiftright
          • 4 Years Ago
          @mikey683
          FOX News is anything but news. The Onion News Channel has more credibility and facts.
      Mike K
      • 4 Years Ago
      So I had to fork out tax money to help keep 2 companies I don't buy vehicles from in business?? Awesome.
        warren,
        • 4 Years Ago
        @Mike K
        Your contributions to the bailouts probably amounts to less than one cent, so is it really worth complaining about?
        TORO Rojo
        • 4 Years Ago
        @Mike K
        You did, and good for you. because if they didn't, the economy would lose more than just GM and Chrysler. Their whole dealer network and suppliers would go bust. The same suppliers that you buy your transplanted car from (toyota, Honda, Hyundia, Kia, BMW, MAZDA, Mercedes, etc) would go bust as well. Small price to pay to keep the whole manufacturing system in the country running strong.
      Jeffrey Smith
      • 4 Years Ago
      Didn't Bush start the auto bailout?
        flammablewater
        • 4 Years Ago
        @Jeffrey Smith
        So condemning the bailout has to be directed at Obama while praising the bailout has to be directed at Bush?
        dukeisduke
        • 4 Years Ago
        @Jeffrey Smith
        No, the TARP bailout was under Bush, while the auto bailout was after he left. I still think the auto company bailouts were a good idea (something like one in seven American jobs are directly or indirectly tied to the auto industry), but I'm not sure we'll ever get all of our money back.
          montoym
          • 4 Years Ago
          @dukeisduke
          Bush gave the initial funds to GM and Chrysler to keep them going. He did not fully orchestrate the bailouts since it was all at the end of his term. He did get the ball rolling though and left it to his successor to work out the details.
      KBCfromGA
      • 4 Years Ago
      Why do we have a Capitalism based system? We have bankruptcy laws to handle companies in trouble. Seems to be a forgotten fact that Delta Airlines went through bankruptcy back in 2005 and emerged from it in 2007 as one of the strongest airlines. No bailouts, just good fiscal restructuring. I guess they weren't "to big to fail". The more government intervenes, the harder it is for the market has to correct because it doesn't have a clear sense of the outcome. GM and Chrysler could have gone through standard Chapter 11 bankruptcy, restructured, and come out leaner more efficient companies, all without costing the taxpayers a dime ! With all the trillions talked about these days, I guess billions are no big deal. WE STILL LOST 14 BILLION OF OUR TAX DOLLARS. We're now paying for all these bailouts at the pump, grocery stores, etc. because our dollar has less buying power. Let the system work... that's what it's there for !
        Making11s
        • 4 Years Ago
        @KBCfromGA
        We're not really capitalists and it's not a free market system. If someone says we do laugh in his or her face. It's simply not true. Also, we bailed out the airlines in 2001 to the tune of almost $19B.
      Zoom
      • 4 Years Ago
      Don't those millions of autoworkers pay income taxes now? Is that even considered? If they had been fired, they'd be collecting unemployment, causing even greater losses in services that not only support automakers directly, but in businesses which those workers patronize. Think of the appliances, homes, cars, clothes, food those workers buy. The restaurants they support. The vacations they take. The economic effects of those folks having jobs goes way beyond $14B.
      • 4 Years Ago
      [blocked]
      flammablewater
      • 4 Years Ago
      For the millions that the auto industry employs (directly and indirectly) that sounds reasonable, especially with more money to come.
      Fancy Sauce
      • 4 Years Ago
      So WHY are we not getting back ALL of the loan? When we get loans from the bank, they ask for all of the money back
        BipDBo
        • 4 Years Ago
        @Fancy Sauce
        I think that this is the answer, but if I'm wrong, someone will correct me. We are getting or have already received all of the "loaned" money back, but some of the bailout was to buy stocks and bonds from these companies that were going into bankruptcy. My understanding is that not only did this save the companies, but many retirement portfolios.
        axiomatik
        • 4 Years Ago
        @Fancy Sauce
        Because the Autoblog writers have poor comprehension skills. The $50 Billion to GM wasn't a 'loan', it was an equity investment. In other words, the government gave GM the money and got ownership shares in return. It is not money that GM is obligated to pay back (if it wants, it could choose to buy back the shares). However, that is unlikely, most of the shares will be sold on the open market, some of which was at the IPO. How much the government gets back will be determined by the share price they are sold at.
      Todd Dunning
      • 4 Years Ago
      It's a tragedy for all of us, but a huge win for the Chinese: 1. That portion of your tax money now can't be used to buy products that benefit you and the economy; it was just thrown out the window. 2. You could have used that money for something you needed, from another company that deserves the business too...benefiting both you and that company's employees. 3. Since this was another loan from the Chinese (We don't make enough to cover the existing debt) it will cost us for many years. Directly out of our pockets and into the Chinese economy. For nothing. 4. All the other deserving car companies ( that don't get our free tax money ) could have got our business had GM been allowed to die peacefully. Instead, they get no business, we get taxed more, and the Chinese laugh to the bank. By the same logic, we should have taken out a $10B loan to save Buick or Pontiac. This is exactly what destroyed the Soviet Union. Communism works until you run out of other people's money.
        axiomatik
        • 4 Years Ago
        @Todd Dunning
        Guess what? The money doesn't disappear into a vacuum. The money that was given to the automakers financed the payroll of hundreds of thousands of workers, who then took that money from their paycheck, and bought goods and services with it, and paid taxes on that same income. That money was also paid to suppliers, who paid their employees with that money. Who paid taxes on that money. Those suppliers also bought raw materials and other services with that money, paid taxes on their profit. Their suppliers received that money, and used it too. That money also prevented hundreds of thousands of people from having to collect unemployment, or foreclose on their house, etc. Despite what you seem to think, that money was injected right back into the economy.
      Jonathan Arena
      • 4 Years Ago
      Does this include the amount of increased tax revenue that we are getting from these companies being in business rather than bankrupt? If not, I bet we would actually be MAKING money off the bailout...
        • 4 Years Ago
        @Jonathan Arena
        [blocked]
          rlog100
          • 4 Years Ago
          Liquidated companies pay no taxes. And how much taxes do you think the companies are generating since that tax break given to them in 2009 (same tax break they would have had if they didn't go through bankruptcy) is still hanging around unused?
          axiomatik
          • 4 Years Ago
          Yes, GM is enjoying a tax holiday due to it's billions of dollars of losses, but it isn't some sweetheart deal just for GM. It was a ruling applied to all the companies that were bailed out via TARP funds. That means all the banks that were bailed out got the same tax deal. Besides that, corporate income tax is only 1 source of tax revenue saved. Don't forget personal income taxes for everyone who wasn't laid off thanks to the bailout. Or Corporate taxes on suppliers and dealers that didn't fail, personal income taxes on the employees of those affiliated companies, etc.
        throwback
        • 4 Years Ago
        @Jonathan Arena
        We have actually made money on TARP. The banks profits have been great the last 2 years. I assume the "only 14 bIllion" takes into account the borrowing cost of the bailout money. it's not like the money came from a tree on the south lawn of the Whitehouse.
      William
      • 4 Years Ago
      Until the United Auto Workers has zero stake in GM and reparations are made to the the people who actually did have equity and walked away with nothing, I will not buy a GM car. I want to buy American, so I will go with Ford. I think the presidential candidate I will vote for is the person who demands a "date certain" for the U.S. withdrawel from General Motors. Someone should challange the constitutionality of what was done by the current administration in its handling of GM.
        carboy55
        • 4 Years Ago
        @William
        Newsflash: The UAW has plenty of stake in Ford too.
          • 4 Years Ago
          @carboy55
          [blocked]
        montoym
        • 4 Years Ago
        @William
        You won't even get that chance. The current administration is so eager to wipe their hands of GM, they will sell the remaining shares long before the next election even if the stock market is still trading low. We don't have to lose a lot of money on GM, but this administration will make sure of it by selling the remaining shares while GM is still trading at IPO levels. The entire market is in flux right now. Give it some time and I have no doubt that the market (and GM with it) will rise as the economy improves and the US could achieve a better payback than what they'd get based on current trading levels. It all hinges on when the Feds decide to sell. I have absolutely no confidence though that the sale date will extend beyond the election next year regardless of where the market is at that point. GM is too much of a political liability for this administration in their eyes.
      Zach Hudson
      • 4 Years Ago
      We should have NEVER bailed out any company. The bailout resulted in GM and Chrysler both filing for bankruptcy (which would have happened without the bailout money) and then they reorganized and have been successful thus far. The only thing the bailout did was cost the government a lot of money and destroy the concept of capitalism. In a capitalist society government DOES NOT own any portion of any company. We aren't a capitalist society, we are a half baked capitalist/socialist society with a socialist leaning.
        john
        • 4 Years Ago
        @Zach Hudson
        Yep.. that's called a mixed economy, and it's what we've been for quite a while.
        Robert Kyle
        • 4 Years Ago
        @Zach Hudson
        And your right-wing bats love huge tax breaks to companies that offshore jobs and oil companies that goudge us? yeah, that's fascism.
        axiomatik
        • 4 Years Ago
        @Zach Hudson
        Sorry, but in the height of the crisis, when all of the country's largest banks were on the verge of collapse, no one else would have lent the automakers money. And without billions of dollars to finance a re-organization, the only option left would have been liquidation. The choices were bailout or liquidation. There was no other option. In a normal economy, a bank or consortium of banks would have stepped in and financed a chapter 11 bankruptcy. The shareholders would have lost everything, but the banks would then have an ownership share in the new, post-bankruptcy company in return for their investment. However, it was nothing like a normal economy at the time. No private enterprise would be willing to risk that kind of money (tens of billions of dollars) when the economy is melting down, car sales are plummeting, hundreds of thousands of people are losing their jobs every month, the banks are losing billions of dollars every quarter on bad mortgages, etc. So the government stepped in as a lender of last resort, because the economic impact of the automakers failing would have been catastrophic.
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