GM IPO: Auto Bailout Saved More Than 1 Million Jobs, Study Says
November 17, 2010
by Shira Ovide
No matter what happens with Government Motors, the taxpayer intervention in the auto business appears to be a win for Americans, a new research report asserts.
The Center for Automotive Research said today the government’s bailouts of the U.S. auto industry spared more than 1.14 million jobs last year alone, and prevented “additional personal income losses” of nearly $97 billion combined for this year and last.
Another 314,400 jobs were saved this year thanks to the $80 billion in taxpayer lifelines extended to GM, Chrysler, and the GMAC and Chrysler Financial financing businesses, CAR said. The research organization based its conclusions on the potential impact of auto-industry collapse for jobs at U.S. auto makers and suppliers, and cascading effects on the economy at large. See more on CAR’s methodology here.
Government officials and former White House car czar Steve Rattner also have said they believed the auto bailouts were worth it for the jobs they saved and the financial toll spared to the swirl of businesses tied to the U.S. auto business.
This isn’t a universally held view. A late August poll by the Wall Street Journal and NBC News found 37% of respondents believed the GM and Chrysler bailouts “made things worse.” About one-third of people said the bailouts “made things better.” (The bank bailouts were less popular, according to the poll.)
At the rough pricetag of $80 billion in government assistance, each job CAR said was saved during the last two years cost taxpayers nearly $57,000.
But on the eve of General Motors’ wildly popular return to public markets, CAR figures Washington only needs to recoup $38 billion more on the taxpayer bailouts to “achieve a two-year break-even.” Put another way, if the Treasury recovers 57 cents on the dollar or more in IPOs of GM and Chrysler, “the public will have been made full whole,” CAR concluded.
Full article at link.