91.7 Ann Arbor/Detroit 104.1 Grand Rapids 91.3 Port Huron 89.7 Lansing 91.1 Flint
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

"Successful Bankruptcies" - report says Detroit bailouts were worth it

GMC SUVs in a car lot
user ep_jhu
Creative Commons
GM and Chrysler suffered through bankruptcy in large part because it relied so heavily on SUV sales.

The Center for Automotive Research released a report today that analyzed the government bailouts of General Motors and Chrysler.

$80 billion was given to the auto companies. To date $13.4 billion has been repaid.

Tomorrow the GM "initial public offering" is expected to raise another $22 billion.

The reports authors say that even if the government doesn't get all of the $80 billion back, the government's investment will still have been worth it.

The report concludes:

The updated analysis contained in this memo demonstrates that even if the net return to the U.S. Treasury is $28.6 billion... lower than the outstanding public investment in these two companies... the public will have at least met a two-year break-even. This means that if the Treasury recovers $0.57 on the dollar or more in upcoming equity sales, the public will have been made fully whole. Additionally, the government’s actions avoided personal income losses totaling over $96 billion, 1.1 million net job losses in 2009, and another 314,400 in 2010.

Mark Brush was the station's Digital Media Director. He succumbed to a year-long battle with glioblastoma, an aggressive brain cancer, in March 2018. He was 49 years old.
Related Content
  • General Motors (GM) will be in the news a lot this week, so if you sat out the GM story up until this point, here's a quick summary to get you caught…
  • General Motors says it’s raising the price range for its initial public stock offering.The stock will sell for $32 to $33 per share.That price range is…
  • The Wall Street Journal is reporting that GM's IPO tomorrow could be a biggy:The automaker's biggest investor, the United States Government, is anxious to…