The Center for Automotive Research (CAR) has been studying the effects of the General Motors and Chrysler bailouts in 2009. Now that the US Treasury has officially sold off the rest of its stake in GM (and Chrysler has already paid back its loan), CAR has released its study on the effects of the bailout with this concluding note: "CAR is confident that in the years ahead, this peacetime intervention in the private sector by the US government will be seen as one of the most successful in US economic history."

Big words, for sure, but there's plenty of evidence to back up the claim. Bailing out GM alone saved 1.2-million jobs. If both GM and Chrysler hadn't been bailed out, US employment would have been reduced by 2.631-million jobs in 2009 and another 1.519-million jobs in 2010, according to the study. If both automakers were allowed to fail, personal income in the US would have decreased by $173.5 billion in 2009 and $110.9 billion in 2010. Instead, the study found that $284.4 billion of personal income was saved by the bailouts.

The Federal government's budget would have been affected due to higher transfer payments, lower social security receipts and lower personal income taxes paid, according to the study, which would have cost the Fed $64.7 billion in 2009 and $40.6 billion in 2010. That's much more money than what the government spent on GM's bailout ($49.5 billion) and Chrysler's bailout ($12.5 billion). It's also much less than the the US Treasury's loss of about $10 billion on GM's bailout. The US Treasury lost $1.9 billion on Chrysler's bailout.

If the numbers seem high, it's because the auto industry is linked at many levels, and the survival of parts suppliers (and their employees' jobs) largely is dependent on the survival of US automakers. For example, the study found that 51 percent of GM's parts suppliers also sell parts to Ford, 56 percent to Chrysler, 58 percent to Asian automakers and 37 percent to European automakers. A failure of virtually any major US automaker would have severe consequences in the global automotive industry.



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  • 145 Comments
      Avinash Machado
      • 1 Year Ago
      So many bailout related stories here in the past few days.
      Mazdaspeed6
      • 1 Year Ago
      Haters gonna hate. Do you Obama.
      AngeloD
      • 1 Year Ago
      The potential loss of jobs is tremendously exaggerated in the report. Beyond any over capacity in auto manufacturing that would have been wrung out of the system, other more successful companies like Hyundai, Ford, Toyota, would have increased production to make up the deficit. And, ever notice how the hard-left socialist Obama knob-gobblers can blame Bush for every one of Obama's failures, but can never quite bring themselves to credit Bush with approving the auto company bailouts that they laud. "If you like your doctor, you can keep your doctor, period!" "If you like your health insurance, you can keep your health insurance, period!" "If you like our socialist idiocy, you can expect more of it, period!"
        haz
        • 1 Year Ago
        @AngeloD
        Bush approved the bailout after Obama campaigned on it and won the presidential election. Romney ran on "let Detroit fail." If Romney won, Bush would have gladly washed his hands of the problem and claimed that the American people had spoken. Also, you state that the report exaggerated potential job losses. Unless you have some technical background that makes you qualified to comment on the validity of the document, just keep your mouth shut and spare us the teatard blather.
          cpmanx
          • 1 Year Ago
          @haz
          JFC, you think Obama was running against Romney in 2008? And anyway, the big Bush bailout began in September. Maybe he was trying to start the Obama administration early. Maybe Bush is secretly Obama's campaign strategist. Maybe they are the same person. http://www.cnn.com/2008/POLITICS/09/24/bush.bailout/ Bottom line: You are not in a position to be discussing anything about facts.
        cpmanx
        • 1 Year Ago
        @AngeloD
        Funny, I see an Obama supporter speaking out on behalf of Bush just three comments below. There were plenty of similar comments on the previous post about the government sell-off of GM shares. So the real question is--why should we believe anything you say when you are being blatantly dishonest about something as simple as reader comments?
          AngeloD
          • 1 Year Ago
          @cpmanx
          @cpmanx: The time stamps for the posts you are referring to are either after of concurrent with mine. So the real question is--why should we believe anything you say when you are being blatantly dishonest about something as simple as reader comment time stamps? Has being lied to so often by Obama made you cynical and jaded, LOL. "If you like your doctor, you can keep your doctor, period" Yeah, I'm going to believe a report based on data from the Obama Dept. of Labor statistics.
      IfIWereObama
      • 1 Year Ago
      LOL..was this article written by Jay Carney? It's full of lies & assumptions. The assumption that all GM jobs would just go away in a bankruptcy is a such a joke. Large corporations do that all the time & come out stronger. They STILL went bankrupt after they got our money. The government then took over the bankruptcy, instead of allowing it through the normal bankruptcy proceedings and favored it heavily towards the unions...absolutely screwing millions of Americans who had 401k's, Pensions, and life savings that invested in GM stocks and bonds. What's ironic is that they also screwed many other union pension plans to help auto unions.
        cpmanx
        • 1 Year Ago
        @IfIWereObama
        Shareholders almost always lose their money in bankruptcies. Jobs do disappear when companies go bankrupt. If demand always kept the market humming evenly there would be no such things as recessions or depressions. And 2008-2009 was not a normal time. There was no liquidity available to support a conventional bankruptcy of this size.
      Kabayo
      • 1 Year Ago
      Left wing propaganda, repeated as fact. Give me a break.
      carboy55
      • 1 Year Ago
      Shhh... you are ticking off the perpetually angry Teabillies!
      SooooRight
      • 1 Year Ago
      Blah, blah, blah. There is nothing saying those jobs wouldn't have largely been rehired after a bankruptcy and reformation. Instead, largely nothing was done to change what is going on and we will revisit this again. Money down the drain.
        Txdesign
        • 1 Year Ago
        @SooooRight
        Right, during a recession other companies would have fallen all over themselves to hire laid off auto workers.
          Val
          • 1 Year Ago
          @Txdesign
          so those workers were just paid salaries to sit idle and twiddle their thumbs or what??? If that is the case, then there is no excuse for the bailouts.
      brandon
      • 1 Year Ago
      Huffpo propaganda machine in full force the last couple of days.
        mikeybyte1
        • 1 Year Ago
        @brandon
        Do you have any facts to share to dispute the article? Or are you just trolling?
          brandon
          • 1 Year Ago
          @mikeybyte1
          I have the same amount of actual hard facts as the article does. Does that answer your question?
          Val
          • 1 Year Ago
          @mikeybyte1
          Where are the facts that none of those workers would have been rehired or kept heir jobs after the assets were sold at an auction to pay the creditors??? Suddenly all of those plants would just sit idle, despite the huge demand???
          Val
          • 1 Year Ago
          @mikeybyte1
          yes, you have no facts at all, thank you
        • 1 Year Ago
        @brandon
        [blocked]
        tump
        • 1 Year Ago
        @brandon
        Attacking the messenger is a logical fallacy. Your message has no content.
          brandon
          • 1 Year Ago
          @tump
          Neither does the AB post. So your point is what?
      Seal Rchin
      • 1 Year Ago
      Dear Autoblog, elections will be next November..................save your lies until that time. BTW will you be bringing up all the anti Romney articles or is Ariana telling you to drop those?
        • 1 Year Ago
        @Seal Rchin
        [blocked]
      FIDTRO
      • 1 Year Ago
      We can argue all day about the bailouts. I personally think they were a good idea, because if GM wasn't too big to fail, it certainly is too important to lose. What I'm really anxious to see is whether GM has learned from its mistakes. Best of luck to Barra in the future.
      Eta Carinae
      • 1 Year Ago
      could you just imagine what the economy would be like if these companies failed.....republicans saying they dont higher taxes.....imagine paying unemployment for 2.6 million more people on top of the amount we have now....the bailouts were smart decision and saved alot of people from suffering....
        DawgByte
        • 1 Year Ago
        @Eta Carinae
        Investor's got screwed by Obama in the GM deal. It remains to be seen whether a bloated, heavily unionized GM will be a long term success, so your chest pounding is a bit premature. A far better scenario would have been for GM to go under a managed bankruptcy to restructure it's debt, restructure high union costs, relocate plants to more competitive areas of the country (Southeastern U.S.) and perhaps even move the company out of Detroit. No, the jury is still out on this case regardless of what CAR says in their report.
      Ducman69
      • 1 Year Ago
      What nonsense, it didn't save any jobs. The airline industry is proof of this. The market will not tolerate a vacuum, and the only way you can create or lose jobs is by creating or destroying demand. GM still could have gone through bankrupcy restructuring without the American people footing the bill, and even if they had to sell off some brands (ala Chrysler) they wouldn't disappear. And even in a worst case scenario, it likely would have simply translated into a boom for Ford sales. Not to mention that these days there are many Hondas that are made right here with more domestic parts content than GM's made in Mexico with parts from South Korea.
        icemilkcoffee
        • 1 Year Ago
        @Ducman69
        \'GM still could have gone through bankrupcy restructuring without the American people footing the bill\" Not so. During the 2008-2009 time frame, all lending came to a screeching halt. Noone could have loaned money to GM to come out of bankruptcy. Besides- most of the banks were being bailed out themselves by the government at the time. Also- Ford themselves said that they could not survive if GM went under - because the common suppliers would have gone under as well.
        mikeybyte1
        • 1 Year Ago
        @Ducman69
        Who would have done the bankruptcy at the time? How would Ford have benefited if the suppliers all went bankrupt? Ford went side by side with GM and Chrysler to support them and testify that if those two failed Ford would have gotten sucked under.
          Klimo
          • 1 Year Ago
          @mikeybyte1
          So let me get this straight. If GM goes down then all the suppliers go down, then Ford goes down and every other manufacturer that builds cars here? So no new cars? The entire industry is gone? Color me skeptical. Also, Goverment backed private lending was one of the best ideas being talked about to ensure that GM got private lending and could restructure normally. Worst case the govt steps in anyways.
          lasertekk
          • 1 Year Ago
          @mikeybyte1
          Ford rep was there on the Hill, testifying before Congress, pleading for loans for the other automakers...there's video on it if you don't believe it. GM falling would have cut down Ford suppliers as well, eventually forcing Ford out of business.
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