Skip to Content
Streetsblog USA home
Streetsblog USA home
Log In
Auto Makers

GM Bailout Will Cost Taxpayers as Much as $12 Billion

"Government Motors" no more. The federal government is calling in its loans to General Motors, which received a taxpayer-funded injection of almost $50 billion at the height of the financial meltdown in 2008.

The auto bailout cost taxpayers a bundle, but it helped Obama win reelection. Photo: ##http://www.usnews.com/news/blogs/rick-newman/2012/12/19/its-official-taxpayers-will-lose-big-on-the-gm-bailout## U.S. News and World Report##

Over the next 12 to 15 months, President Obama says the world's largest automaker, which has been turning a healthy profit since 2010, must buy back its remaining 500 million shares from the government. But, unlike the bank bailouts, the government rescue of GM won't result in a payout for its taxpaying saviors.

The federal government will receive only the going share prices, currently about $27, for its investment -- about half of the purchase price of roughly $54 a share. US News and World Report estimates the bailout of GM will cost taxpayers between $10 and $12 billion.

So, chalk up another big subsidy for driving. Taxpayers also lost $1.3 billion on the bailout of Chrysler. And then there was the $3 billion Cash for Clunkers program -- another stimulus-era subsidy for the auto industry.

There's a fair argument to be made that the economic fallout from the dissolution of General Motors -- which employs 202,000 people worldwide -- during the lowest point of the worst recession in generations would have been disastrous. But the $10-$12 billion bailout is another indication of the high cost of America's auto dependence.

Remember, this wasn’t the first time U.S. taxpayers bailed out the domestic auto industry. In 1980, Chrysler — reeling from the U.S. oil embargo — received $1.5 billion from the government. It will be interesting to see whether the American auto industry, when it faces the next collapse in demand for its product, will again be the beneficiary of a taxpayer-financed insurance policy against financial collapse.

Stay in touch

Sign up for our free newsletter

More from Streetsblog USA

Friday’s Headlines Drink From the Firehose

A key DOT nominee's role in Project 2025, more dubious executive orders, climate change accelerates and more headlines.

February 7, 2025

Friday Video: It’s Been a Week! Take A Breath And Watch People Bike In Utrecht

Take a break, regulate yourself, and get back to fighting for a better future for transportation in America.

February 7, 2025

Commentary: It’s Time for Newsom to Bring it Home on High Speed Rail

Oil-funded, Trumpian Republicans long-ago decided to turn California's HSR project into a political football. If they want to play games, then it's long past time for California Democrats to stop jerking around and play to win.

February 6, 2025

Talking Headway Podcast: 20 is Plenty in Wales

Welsh MP Lee Waters and the University of Sydney's Dr. Jennifer Kent on how Wales passed a national 20 mph speed limit.

February 6, 2025

Who is Trump’s FTA Pick Marc Molinaro — And Will He Kill Congestion Pricing?

If confirmed, Trump FTA pick Marc Molinaro can do a lot to gum up funding for mass transit across the country. Here's a look at his record.

February 6, 2025
See all posts