When the U.S. Treasury announced last month that it plans to sell the last of its General Motors stock by the end of the year, it didn’t just mean an end to sneering at “Government Motors.” It marked a triumphant milestone in one of the most successful government programs in modern history.
Five years ago, when President George W. Bush and then President Obama decided to “bail out” the auto industry, congressional reaction ranged from skepticism to open hostility. Southern senators, many of whose states are home to Japanese auto plants, bellowed that Chrysler and GM should be allowed to go straight to traditional bankruptcy.
Had that happened, it would likely have wiped out Ford Motor Co. as well, since the domestic automakers depend on common suppliers. The Center for Automotive Research estimated that as many as 3 million jobs might be lost.
Fortunately, the two presidents made the right choice. Taxpayers spent $49.5 billion to help GM stay afloat through a cushioned bankruptcy. Stock prices fluctuate, but in the end, the GM bailout will have cost the U.S. Treasury about $10 billion.
But to say that taxpayers “lost” $10 billion on the bailout is like saying you lost $30 because you paid to change the oil in your car, instead of waiting for the engine to seize. Had the domestic auto industry collapsed in 2008-09, the financial cost — and the human misery — would have been incalculable.
Today, GM and Chrysler are solidly profitable, employing tens of thousands of workers and contributing to federal, state, and local tax bases. The auto bailout has been a strategic investment in America’s future — money spent wisely and well.