On June 1, 2009, General Motors filed for bankruptcy, backed by $30 billion in support from the federal government. The same day, in the same New York courthouse, a judge approved Chrysler’s plan to forge an alliance with Fiat and emerge from bankruptcy as a restructured business with an uncertain future.
Two years later, all three American automakers have returned to profitability, the industry has added new shifts and 115,000 jobs, and GM and Chrysler have returned more than 50 percent of the government’s investment. The industry is mounting one of the most improbable turnarounds in recent history.
Friday, June 3, 2011
As a follow-on to my call for the Right to repeat endlessly that we won the Iraq War, we also need to start repeating that, no, the auto bailouts didn't "work," except in the very limited sense you can throw enough $$ into anything and keep it going.
That's The Indispensable Man himself writing in the Washington Post. The Obama Administration is crowing about how they "saved" the American auto industry while simultaneously admitting that they have lost $16 billion saving 75,000 auto jobs (actually union dues paying sinecures). If they admit to $16B, then the real number must be quite something. Even worse, we are intentionally losing money on the government's stock holdings because the Obamites don't want to be holding a Government Motors stock position going into 2012.
Jim Manzi offers the real world perspective
As others have pointed out, if the point was to "help" the auto workers, it would have been cheaper to give GM's 75,000 pre-BK employees $250,000 to start over. That's the In Our Hands plan. But that wasn't the point of the bailouts. The point was to reward allies, preserve the Wagner Act, and expand the government's sway over heavy industry. Sure, GM and Chrysler are still in business and their factories are still pumping out cars, but it's still an open question whether the bailed out will return to profitability.
Not only that, a very specific part of the bail out doesn't seem to be working at all. Back in 2009, we were hearing all about how GM was developing the Chevy Volt, that this was the car of the future, and that we should bail out GM to give them a chance to bring this Green Wonder Car to market. Have you ever seen a Chevy Volt on the road? I live in San Francisco, a "green" city filled with hybrids, whether Prius's, Camry's, Lexus HS's, Ford Escape's, or what have you. It's very easy for me to just walk around my neighborhood and encounter all manner of exotic cars: Bentleys, Maseratis, Lotuses, Porsche Panameras, Teslas. Even Ferrari's are a fairly common sight (by that I mean one or two per week).
I have seen one Chevy Volt.
Now, I'm just one guy living in one neighborhood in one city. But, if there's one place in the United States that you would expect to buy into the GM bailout via the Volt, this would be it. They're not buying it.
The government has lost billions on GM.
The Volt is not "saving" the planet.
We are going to have to bailout GM again.
It shouldn't be difficult for the Right to repeat these very basic facts.