Say goodbye to “Government Motors.”
The Obama administration announced Monday the Treasury Department has sold its remaining shares in General Motors at more than a $10 billion loss for taxpayers, about five years after providing the country’s top automaker with a $49.5 billion bailout in exchange for a majority stake in the company that helped it earn the nickname “Government Motors.”
“I think that’s a big deal,” General Motors North America President Mark Reuss told reporters Monday. “I’m not talking about markets or stock price or anything else. I’m talking about internally. This has been a long, hard road with no repeat customers and the label of ‘Government Motors.’”
The government spent $85 billion overall to bail out the auto industry, including giving money to Chrysler and a handful of smaller companies, a controversial move that analysts say was tough, but necessary to avoid the loss of millions of American jobs and letting the economy collapse even more.
President Obama, who expanded on the original bailout package from the Bush administration, said his administration didn’t lose any money on the deal.
“GM has now repaid every taxpayer dollar my administration committed to its rescue, plus billions invested by the previous administration,” Mr. Obama said.
The president gave himself credit for helping to save the auto industry from collapse when he took office.
“I refused to walk away from American workers and an iconic American industry,” he said. “Less than five years later, each of the Big Three automakers is now strong enough to stand on its own. They’re profitable for the first time in nearly a decade.”
He added, “When things looked darkest for our most iconic industry, we bet on what was true: the ingenuity and resilience of the proud, hardworking men and women who make this country strong. Today, that bet has paid off.”
Treasury Secretary Jack Lew says the rescue was necessary to save 1 million jobs and stop the American auto industry from collapsing.
This comes more than two years after the Treasury Department closed the books on Chrysler — which had received its own $12.5 billion bailout — at a $1.3 billion loss to taxpayers.
The Center for Automotive Research released a study that claims the U.S. would have lost 2.6 million jobs in 2009 if the Obama administration had let GM and Chrysler fail. The Ann Arbor, Mich.-based group estimates the government “saved or avoided the loss of” $105 billion.
“When people are not working, not only does the government not collect money, it must spend money,” Sean McAlinden, senior economist at the Center for Automotive Research, told the Detroit Free Press. “Short run losses are real losses. They don’t go away in the long term. Even if the industry does come back.”