FLINT, MI – Top executives at General Motors say taxpayers got a fair shake in the bailout of the automaker, despite estimates the U.S. Treasury lost about $10.5 billion on the rescue effort.
“We did a good job of putting people back to work,” GM North America President Mark Reuss tells WardsAuto after announcing a $600 million assembly plant investment here. “I’m proud of that.”
Earlier this month the Treasury sold the last of its shares in GM stock, which the government received in return for injecting $49.5 billion into saving the automaker in 2008 and 2009.
GM Chairman and CEO Dan Akerson, speaking in Washington about the automaker’s comeback and a broader U.S. investment package totaling $1.3 billion that will create or retain more than 1,000 jobs, puts a finer point on the topic. He says if the Treasury had not helped GM through its bankruptcy and seeded the turnaround about $26 billion in pension liabilities would have been handed over to the government.
Millions of dollars more in tax collections would have been lost, too, Akerson says. The idea of repaying the Treasury’s investment deficit would not work either, he adds.
“There would be shareholder suits that would be difficult to defend,” he says during a televised question and answer session after a speech to the National Press Club.
A newly released study from the Center for Automotive Research in Ann Arbor, MI, recently estimated the bailout saved 1.2 million jobs and $39.4 billion in personal and social insurance tax collections in 2009 and 2010. It saved a financial crisis of “unprecedented proportions,” the study asserts.
Reuss says a healthy GM has the entire economy back on track.
“Everything in this country is being built on things we make,” he says.
Since emerging from its 39-day trip through bankruptcy, GM has put in motion U.S. investments of about $10.1 billion, including $2.8 billion in 2013, which has created or retained more than 26,500 jobs. Over that time the automaker has posted 15 straight quarterly profits, released a number of critically acclaimed products and become the first U.S. automaker to lead the industry in quality in decades.
Reuss thinks that sort of a track record will start winning back consumers boycotting GM products because they opposed the bailout. GM sales so far this year are up 8.8% to 2.6 million units, according to WardsAuto data, but its market share has slipped to 18% from 22.2% prior to bankruptcy.
“As long as we are making cars and trucks that are award winning, we’re going to make that business back,” he says.