(WSJ) Government May Lose $14 Billion on Auto Bailout

The White House said Wednesday that taxpayers could lose roughly $14 billion of the money spent on auto industry bailouts, despite the industry’s recent recovery.

The White House cites the potential losses in a report, “The Resurgence of the American Automotive Industry,” released ahead of President Barack Obama’s trip Friday to a Chrysler Group LLC facility in Toledo, Ohio.

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Posted in * Economics, Politics, Budget, Corporations/Corporate Life, Economy, House of Representatives, Labor/Labor Unions/Labor Market, Office of the President, Politics in General, President Barack Obama, Senate, The Credit Freeze Crisis of Fall 2008/The Recession of 2007--, The National Deficit, The Possibility of a Bailout for the U.S. Auto Industry, The U.S. Government

9 comments on “(WSJ) Government May Lose $14 Billion on Auto Bailout

  1. AnglicanFirst says:

    Let’s be honest, the primary motive behind the auto industry “bail out” was in fact to “bail out” the industrywide auto workers’ unions.

    These unions helped to bring the American auto industry to its knees in the first place.

    The exorbitant wages, benefits and retirements of the auto workers make it much more difficult for American car makers to compete against foreign imports.

    These exorbitant worker costs also represent a surcharge created by the unions and placed upon the shoulders of their fellow American car purchasers.

  2. David Keller says:

    Ricky–I am shocked to find gambling going on here.
    Here are you winnings Captain Renneau.
    Oh, thank you.

  3. sophy0075 says:

    Let’s not forget also that this ridiculous scheme took off the market many serviceable used cars, and thereby inflated the price of the remaining used vehicles on the market. Try shopping for a good used car at a reasonable price for a teenager – many of my friends with adolescent kids got hurt by this.

  4. Billy says:

    And does anyone else think the attack by the DOT (Sec. LaHood) against Toyota may have had a little to do with promoting the American auto industry and its unions. Was there ever any proof of an accelerator sticking and causing accidents? If so, I never saw it and the cases that were tried never proved it.

  5. GB46 says:

    Yes and no. The electronic acceleration was proved to not be a cause, but mechanical pedal sticking as well as mat entrapment and driver error were proven. The mechanical sticking and some of the mats (and attachments) were responsible for the recall.

  6. Milton says:

    No, the “government” did not lose a penny. We, the taxpayers of America, collectively lost $14 billion that big unions “found”.

  7. Mitchell says:

    In our state we saw the dangers of unions early. Our textile families and legislators got together and put a stop to unionization before the unions got their hands on our textile companies. It is only now that we can fully appreciate the foresight of our forefathers.

    The big union states have seen their unionized automobile and steel industries lose business to foreign competition to the point they were forced to seek taxpayer assistance to preserve no more than a remnants of their former selves. Without that assistance those companies, except for Ford, would have failed and thousands of union members would be without jobs. So they owe their jobs to the American taxpayer.

    In the nonunionized textile industry, it was entirely different story. Our textile families were able to see the train wreck coming and implement a strategic retreat by preemptively moving their plants to Mexico, China and South America; allowing them to preserve their wealth and our dignity.

  8. Sarah says:

    RE: “they were forced to seek taxpayer assistance to preserve no more than a remnants of their former selves. … ”

    Heh — they were “forced to seek taxpayer assistance” in order to “preserve” their insane amounts of pension and other bloated benefits and wages which they forced onto companies which made those companies have ginormous costs of creating-product.

    RE: “Our textile families were able to see the train wreck coming and implement a strategic retreat by preemptively moving their plants to Mexico, China and South America; allowing them to preserve their wealth and our dignity.”

    Yeh — like Mean Old Roger Milliken, which company is still going strong in Spartanburg, SC, because, you know, he innovated and developed his company.


    And thankfully we’ve got Boeing and BMW rather than, you know, “preserving” the buggy-whip manufacturers that are indeed so incredibly valuable to this day.

  9. Mitchell says:

    Sarah is of course correct about Mr. Milliken. He, unlike many of textile families, fought until the time of his death to end free trade with China. He fought hard to have the US Government impose tariffs on textile imports from China and India, and to reduce tariffs charged by central American nations on US textile imports. The Republican Party’s refusal to impose tariffs on Chinese goods almost cost them his financial support on a couple of occasions. His factories have survived, making carpets; though many contend the carpet industry has been forced to rely heavily on illegal immigrant labor to do so.

    BMW and Boeing have and willl produce jobes for SC, but they both came at a very high price to the taxpayers. Taxpayers subsidizing companies??? Well it isn’t exactly conservative, but we can fudge a little here and there I guess, and exchanging 1 million textile jobs for a few thousand car and airplane jobs may turn out to be a good bargain at some point. Assuming those do not ultimately move to China as well.

    I do wish China and India would stop manufacturing those buggy-whips, however. Back in the days when textiles were made in the US we made pants, shirts, sheets, pillow cases, towels, and underwear. It has been really hard substituting Chinese buggy whips.

    All that aside I did not start this to support goverment subsidizing industries. Generally a bad idea. My point was there really is no correlation between unionization and failed industries. BMW is a good example. It is very profitable, dispite the fact that with the exception of its SC plant almost all of its plants are unionized. Likewise, Ford is completely unionized, took no taxpayer money and is profitable.