What about Obama's saving of the US automobile industry by giving government bailouts in 2009? A lot of people regarded it as a bad move and waste of tax payer's money.
However, General Motors is now one of the most profitable companies in the world. GM has earned a stunning $22.6 billion in the 5 years since the bailouts in 2009 and has repaid everything it was obligated to repay the US gov.
Chrysler Group LLC has also repaid their $7.5 billion debt from the 2009 federal bailout to the U.S. and Canadian government in 2011, when the deadline that they had been given was 2017. They managed to pay 6 years early.
For all concerned, Obama's bailout plan was a success. If he had taken down those companies instead through the 'controlled bankruptcy' plans a lot of his political opponents were advocating, there'll be millions of jobs lost from american soil and more money flowing out of the country buying more imported cars which will further raise the national debt level.
So this was indeed a far sighted move by Obama.
More than 60 percent of respondents said the fact that GM had taken bailout money would influence their decision on what brand of truck to buy. This news comes as GM says it hopes to send 40 percent of new Chevrolet Silverados to dealerships in Texas.
If the bailout was such a big success that President Obama could use it as a major issue in his reelection campaign last year, why isn’t GM’s stock isn’t worth more? Why is it increasingly unlikely that Obama’s prediction that taxpayers will make money on the bailout will come true?
After all, when the government used our money to “buy” GM stock, it was because the company was in such dire straits that it was about to collapse. Now, it’s supposedly back on its feet and making a profit. One would think it would have outperformed the market, but it’s selling for just about the same price as the 2010 IPO for the “new” GM, around $35 a share when the rest of the market is up 40 percent.
The significant government stake in the company has hindered recovery. The White House forced policies on GM’s management that were oriented toward its own ideology rather than market factors. Obama himself bragged about it at a town hall meeting in Minnesota in 2011: “What we said was, if we’re going to help you, then you’ve also got to change your ways. You can’t just make money on SUV’s and trucks….And so what we’ve now seen is an investment in electric vehicles.”
That “investment” gave us the money-losing Chevy Volt, and political control of the company led to a series of other policy decisions that sapped the energy out of GM’s rebirth. These decisions including everything from union pension policies to advertising campaigns that did more for Obama’s reelection than GM’s market share.
We’ll never know where GM would be today if it had been allowed to go through bankruptcy in the ordinary way. But there’s no reason to believe the current management, appointed by Washington politicians, has been more competent than the executives who might have taken over following a Chapter 11 reorganization. Remember, the Dow Jones Industrial Average is up 40% since the GM bailout, and the 30 companies in the index are being run by executives hired without Washington’s help.
Obama’s Minnesota remarks also point to another reason why government ownership has hurt GM. It alienated SUV and truck buyers, hardening attitudes they already had for Obama, GM and the bailout.
The National Legal Policy Center survey underscores the prevalence of the distaste in one state alone. Clearly, the “Government Motors” moniker is still hurting GM. For the company, the bailout resulted in bad business policies and bad public relations. The government never should have done it, and should get out as fast as it can. Maybe then, General Motors can begin its real recovery.
http://www.forbes.com/sites/realspin/2013/11/14/the-governments-bailout-of-general-motors-is-strangling-gm/[...]
GM is now one of the 40 most profitable companies in the nation. It's more profitable than a third of the companies in the Dow, including Verizon (VZ), American Express (AXP), Boeing (BA) and 3M (MMM).
But the costs related to its controversial ignition switch recall essentially wiped out its profit in the first quarter of this year. GM estimates that repairs to the 15.8 million vehicles it's recalled this year will cost at least $1.7 billion. And that doesn't include any legal costs, fines or victim payouts that it will face.
http://money.cnn.com/2014/05/29/news/companies/gm-profit-bailout/index.html
