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Auto Bailout Loss Estimate Dips – Still Likely to Top $20 bil

GM’s stock rebound helps cut projected cost to taxpayers.

by on Feb.12, 2013

Though it has slipped in recent days, GM stock is up sharply since last summer, meaning a significant decline in likely bailout losses.

With General Motors’ stock rising by as much as 60% since last summer, the long-term cost of the 2009 auto industry bailout has shrunk substantially – but would still top $20 billion at the current GM share price, according to the latest report on the rescue by the U.S. Dept. of the Treasury.

The government began propping up both General Motors and Chrysler – and their finance subsidiaries – in late 2008, under the outgoing Bush Administration, as it became increasingly likely the two makers would plunge into bankruptcy. The rescue effort was ramped up after the Obama Administration came into power, ultimately raising the investment to $85 billion.

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Initially, the Treasury warned that it might lose as much as $44 billion as GM and Chrysler filed for Chapter 11.  The price tag has since risen and fallen repeatedly, largely based on the stock price of the remaining government holdings in General Motors.


Public Still Opposes Auto Bailout

New poll shows Republicans overwhelmingly negative.

by on Feb.23, 2012

GOP presidential contender Mitt Romney hopes to benefit from the continued opposition to the 2008-09 automotive bailout.

While the U.S. auto industry may be “back,” as President Barack Obama recently declared during his State-of-the-Union address, that hasn’t changed the fact that a majority of Americans remain opposed to the 2008 – 2009 bailout of Detroit.

A new Gallup poll finds 51% of those surveyed still disapprove of the $85 billion rescue effort, with only 44% saying they approve.  And the figure is even more lopsided when party affiliation is considered.  The poll, conducted for the public radio program Marketplace, found 73% of Republicans opposed – though 63% of Democrats were supportive of the bailout.

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Though the results are still in negative territory, overall, that’s still a significant improvement from 2009, when various polls showed that the vast majority of Americans, regardless of political persuasion, were unhappy with the use of taxpayer money to save General Motors and Chrysler.