You’re going to hear and see a lot in the mainstream media over the next few days about how wonderful the TARP program has been, how it saved so many union jobs, how it was the right thing to do, how we taxpayers have gotten such a big return on our “investment” in the auto industry. You probably w0n’t hear that the final GM bailout tally is expected to be a $24 billion LOSS.
From the Detroit News comes a few more inconvenient facts to sully up the media narrative that government intervention into private industry is a sweet deal for everyone.
First, the Treasury Department’s announcement that it will sell a chunk of shares back to GM does NOT mean the U.S. taxpayer is out of this debacle.
The Treasury’s move is intended to minimize the impact of the stock sale on the share price — and the government’s state will shrink from 26.5 percent to less than 19 percent — but the exit could be completed far more quickly.
The exit plan may prove to be a boost to GM’s lagging stock price and to some car buyers, who have avoided GM because of the “Government Motors” label.
Second, recall how offended the pro-Obama forces get when someone points out that the administration plays a role in running GM.
Despite the government ownership, White House officials insisted they would have no role in GM’s management, though there were some exceptions. In one notable move, the Obama administration vetoed a proposal by GM in 2009 to move its corporate headquarters from Detroit to Warren.
Third, think taxpayers are out of the auto industry ownership business, or that we’ve made money on the deals?
Treasury also holds a 74 percent stake in Ally Financial Inc., the Detroit-based auto lender, as part of a $17.2 billion bailout.
Last year, the government exited Chrysler Group LLC and booked a $1.3 billion loss on its $12.5 billion bailout.
The government had planned an initial public offering of Ally in 2011 but put it on hold because of market conditions. Any IPO won’t occur until after Ally’s troubled mortgage unit ResCap completes its bankruptcy restructuring.