Poof! $20B Likely Lost On GM, Says Former Auto Czar
By Joann Muller
Sep. 20 2010
If you were missing $20, would you be willing to write it off as “lost money”? What if you lost $20 billion?
The thought went through my head as I was perusing Steven Rattner’s new book, “Overhaul: An Insider’s Account of the Obama Administration’s Emergency Rescue of the Auto Industry.” The book recounts in vivid detail the political warfare that occurred during the bleak winter months of 2009 as the U.S. government raced to save General Motors and Chrysler.
Rattner, the Wall Street whiz who headed up President Barack Obama’s auto industry task force at the time, is proud of the work his team did to force painful but long overdue restructuring actions on Detroit automakers. GM’s decision to return to the public stock market just 13 months after exiting bankruptcy “was the strongest and most telling indication that the U.S. Treasury will recover most if not all of the $82 billion the American taxpayer staked on overhauling Detroit.”
In a follow-up interview, Rattner acknowledges the possibility that the Treasury won’t ever be fully repaid for saving Detroit. “Even if the government doesn’t recover all of the $82 billion, it doesn’t mean the investment wasn’t successful. We averted a genuine economic catastrophe,” he says. “If you put that up against all the money the government spent, I think we got a good deal on the auto companies.”
In case you’ve lost your receipt, here’s what we as taxpayers invested in the auto industry:
- $19.4 billion in emergency bridge loans for GM under Bush
- $4.0 billion in emergency funding for Chrysler under Bush
- $5.9 billion in emergency funding for GMAC under Bush
- $1.5 billion in emergency funding for Chrysler Financial under Bush
- $30.1 billion to finance GM’s bankruptcy under Obama
- $8.1 billion to finance Chrysler’s bankruptcy under Obama
- $11.8 billion to recapitalize GMAC under Obama
- $0.6 billion for GM and Chrysler vehicle warranties under Obama
- $0.4 billion to prop up auto suppliers under Obama
So how much will we get back?
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