Forum Europa

Full Version: Why the Big 3 Needed a Bailout and What It Cost the U.S. Taxpayer
You're currently viewing a stripped down version of our content. View the full version with proper formatting.
Auto Industry Bailout (GM, Ford, Chrysler)

Why the Big 3 Needed a Bailout and What It Cost the U.S. Taxpayer

The government ended its $80 billion bailout of the U.S. auto industry on December 18, 2014. That's when the Treasury Department sold its last remaining shares of Ally Financial (formerly GMAC) for $19.6 billion. By selling when the stock market was high, Treasury made a $2.4 billion profit on its $17.2 billion initial investment in GM's former financing arm. (Source: WSJ, Bank Bailouts Approach Final Reckoning, December 19, 2014)

The federal government took over GM and Chrysler in March 2009. It fired GM CEO Rick Wagoner, and required that Chrysler merge with Italy's Fiat SpA. It took advantage of the take-over, setting new auto efficiency standard to force the companies to become more competitive against Japanese and German firms.

In return, it bailed out both companies by loaning them enough to stay afloat and providing incentives to spur new car purchases. In effect, the government nationalized the two auto-makers just as it did AIG, Fannie Mae, and Freddie Mac. [...]
The U.S. taxpayer: the most oppressed and underappreciated slave of modern times. The government funds its stupid schemes off of the sweat of our brow.
Reference URL's