• Jun 2, 2011
The auto industry bailout will end up costing taxpayers... The auto industry bailout will end up costing taxpayers about $14 billion (Saul Loeb, AFP / Getty Images).
From the very beginning, the Obama administration made it clear that they'd never recoup all of the money they invested in the auto industry bailout. They just didn't know how much they'd lose.

Now they've put a figure on it: The government will lose about $14 billion in taxpayer funds, out of the $80 billion it spent to bail out Chrysler and General Motors in 2009.

That's a drop in the bucket compared to what the government has spent on bailing out the banks: About $4.6 trillion, with $2 trillion of that still outstanding, according to some estimates.

The administration has been taking several victory laps over the past week, since Chrysler announced it was paying back its $5.9 billion in loans early. GM previously announced that it had repaid a little more than half of the $50 billion it received in federal aid.

Tomorrow, President Obama will be at a Chrysler plant in Toledo, Ohio, to talk about the auto rescue and its aftermath. It is a theme that will likely continue as the run up to the 2012 presidential elections heats up.

Although a $14 billion loss doesn't sound much like a victory, the administration has argued that the alternative would have been much worse: Millions of jobs lost and the collapse of American manufacturing.

Just because the companies have been saved doesn't mean they will last forever, said Ron Bloom, assistant to the President for manufacturing policy. The government got them back on track, forcing them to cut costs, close plants, shut dealerships, restructure their debts and focus on more fuel efficient vehicles. Now it is their responsibility to keep going, he said.

"The fate of these companies rests with the men and women who work there, the managers, the boards of directors, and many things in the external environment," he said. "We are pulling back from these companies, and so I won't make any prediction about their ultimate fate."

GM and Chrysler were on the verge of collapse in the final days of the Bush administration after Congress failed to approve an emergency loan package. The Bush administration gave the companies $17.4 billion in loans and required them to develop a restructuring plan by mid-February 2009.

Obama's administration pumped billions more into the carmakers later that spring but won concessions from industry stakeholders, allowing it to push GM and Chrysler through bankruptcy court in the summer of 2009.

The government still has a stake in General Motors – it sold about half of what it owned when the company held its initial public stock offering in the fall – and has a small stake in Chrysler, as well as a stake in Ally Financial, the former lending arm of GM.

Bloom says the government is going to ease out of those stakes as soon as it can, but will do it slowly. The government won't try to time the market, to get the greatest price for its shares as it can, because that could mean staying owners of private companies for much longer than Obama is comfortable with, Bloom said.

"He's said many, many times, 'I did not run for office to be CEO of an automobile company,'" Bloom said. If they try to sell only when the stock price is at its peak, "then all of a sudden you wake up two, three, four, five years from now and you still own a big stake in a private company."


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    • 1 Second Ago
  • 3 Comments
      • 3 Years Ago
      Providing government loans to the auto companies was clearly among the best things that President Obama--and President Bush--have done. It seems that only the ideologues are still against the government saving millions of jobs, even as successful as the auto companies have become. They are simply in denial as to how close to a severe Depression we were. The economy still has challenges, but it is 10 times better than it was two years ago.
      • 3 Years Ago
      Id just love to hear pulosi....going ebu bfgt ah ah but seems good its really not the 14 bilion its the jobs themillions of jbs we saved///i mean the unuted states had300 billion people according to Nancy..and no not just one occasion many so to her billion trillion its emantics no biggy....only thing it says the government will lose 14 billion not so they still have theri perks and salaries and prestige(WHY I HAVE NO CLUE) its we the people who lose,,they always say the american people the american people...I always wonder when i hear that are they not excluding themselves by not saying we americans....i guess they are excluding themselves ok 14 billion lost.....they should make law it they blunder our money example...dont know where it went ?? as usual or spend it like they did to save an industry a gamble and lose situation then the next years busget should include a 14 billion dollar cut from their benefits and salaries and perks....ite time we stood up to this Tyranny soft as it is its still TYRANNY......just what the first revolution was fought over...matbe its time for a second.
      Gloria Ness
      • 3 Years Ago
      higher gas prices?? "Auto Insurance Clearance" is one very cool site! who would've known that browsing for auto insurance companies here in California would be this fast and easy? great concept and i got quotes with just a few clicks of my mouse!