GM Bailout Leaves Taxpayers in the Hole for $10 Billion
April 18, 2014
Every Tax Day is a painful reminder of how all levels of government waste taxpayer dollars. News coverage of an April 15th press event with new General Motors CEO Mary Barra (read here and watch here) is a harsh reminder of the $10 billion taxpayers lost in the federal government bailout of “Government Motors.” And now, the ongoing troubles with their safety recall of 1.6 millions vehicles and the lack of answers made available at a series of Congressional hearings only add insult to injury.
There was much debate when the government bailed out GM back in 2009 and taxpayers were promised a return on the nearly $50 billion investment. However, in late December 2013 the U.S. Treasury Department announced it had sold back its remaining shares of GM stock – at a loss of $10 billion. As reported by USA Today, the now-departed CEO Dan Akerson said at the time that he did not think the automaker should repay the $10 billion:
“The General Motors bailout may have cost the government $10 billion, but GM CEO Dan Akerson rejects any suggestion that the company should compensate for the losses.
He says Treasury officials took the same risk assumed by anyone who purchases stock.”
So $10 billion later, taxpayers also started the New Year to news that GM was recalling 1.6 million vehicles due to a safety issue that is connected to 13 deaths and another 31 injuries. We then learn that the company knew about the safety default and sat on it for nearly a decade.
According to new GM CEO Mary Barra, that was a problem of the “Old GM” and we are now in the era of the “New GM”….That’s right, the 2009 bailout is the line in the sand and government ownership helped the company shed all the problems that brought it to the point of bankruptcy in the first place. It is way too early to make that determination because we don’t know what else will come out.
This just isn’t right and taxpayers (and all Americans for that matter) deserve to know more about how the company put so many American drivers in danger. Congressional investigators agree. Barra’s less than forthcoming answers during the recent House and Senate hearings on the safety recall drew bold responses from Committee members:
“Was last week’s public grilling about a faulty ignition switch or about New GM vs. Old GM? Did Mary Barra show enough emotion, compassion and passion? Does GM operate under a culture of cost or does it view the customer as its compass?
“I am very disappointed, really as a woman to woman, because the culture you’re representing here today is the culture of the status quo,” said Sen. Barbara Boxer, D-Calif., who questioned Barra’s role as a change agent.
TPA will continue to follow this story as it unfolds. For now, we’ll leave you with this Saturday Night Live clip that captures part of this evolving story.