Tuesday, December 10, 2013

Study: U.S. Bailout of GM Prevented Free-Fall Into Depression

Posted By on Tue, Dec 10, 2013 at 9:31 AM

Even though opponents of government bailouts of any kind are expected to push back, a new report indicates that the U.S. government's rescue of General Motors saved approximately 1.2 million jobs and preserved $34.9 billion in tax revenue.

The analysis comes from the Center For Automotive Research. This morning's USA Today reports that " for the record, CAR gets nearly 80 percent of its funding from sources other than the auto industry."

The report came out Dec. 9, the same day that the U.S. government announced that it no longer owned any GM stock, four months sooner than the Treasury Department estimated.

The bulk of saved jobs and tax payments would have been lost in 2009 and 2010. And Ford Motors, which didn't accept any federal bailout funds, announced Monday that if GM and Chrysler would have gone into free-fall, then the "entire supply base would have gone into free-fall and taken the U.S. from a recession into a depression," according to Ford CEO Alan Mulally.

In addition to GM and Chrysler jobs, the report estimates that 90 percent of U.S. employees at Ford, Toyota, Honda, Nissan, Mercedes and BMW would been laid off for at least a year.

Meanwhile, General Motors announced this morning that 51-year-old Mary Barra would become the auto giant's new CEO in January when Dan Akerson steps down. Barra is executive vice president of GM's global product development, purchasing and supply chain and will be the first woman to hold the top job at a major automaker.

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