DETROIT, MI- The U.S. government's $85 billion bailout of General Motors Co. and Chrysler Group LLC was more successful than many first anticipated, according to a new study released today.
The Center for Automotive Research study -- called ''The Effect on the U.S. Economy of the Successful Restructuring of General Motors'' --€“ found that the controversial 2008-2009 bailout, saved 2.6 million jobs in 2009 alone and $284.4 billion in personal income was preserved over 2009-2010.
CAR concluded that if the U.S. government had refused to assist GM and Chrysler in their financial crisis of "unprecedented proportions," then the whole U.S. economy would be ''operating without a safety net, with the exception of course, of the banking system.''
The study, which was independently funded by the Ann Arbor-based nonprofit center, comes as the U.S. Treasury is expected to fully exit the Detroit-based automaker by year's end. Once the government completely exits GM the government estimated it will lose about $10 billion, which remains far less than some first predicted.
GM, or "Government Motors" as some critics have called it, has continually been ridiculed due to the government ownership, which was the result of the auto industry bailout that began under President George W. Bush in 2008 and which was expanded by President Barack Obama in 2009.
The bailout of GM alone, according to the study, saved 1.2 million jobs in 2009 and preserved $39.4 billion in personal and social insurance tax collections in 2009 and 2010.
GM North America President Mark Reuss said he believes once the government completely exits the automaker, it will provide a boost for customer consideration and morale inside GM.
"This has been a long, hard road with no repeat customers and the label of 'Government Motors,' and Iā€™m pretty excited for (that to end)," Reuss said in response to a question about the government's exodus during a media event Monday at GM's Customer Experience Center in Warren, Mich. "I think a lot of people who work for the company feel that way."
Once the government exits GM, Reuss said he believes some customers that have not looked at GM's vehicles because of the government's ownership -- particularly pickup truck buyers -- will start considering them "right away."
The Detroit News today reports that the government could sell its remaining shares of GM -- less than 32 million shares -- by the end of this week. A year ago, the government announced it would completely exit by by early-2014. It upped that estimate to the end of 2013 earlier this month.
The Treasury originally owned about 61 percent of GM as part of the auto bailout, which forced GM and crosstown rival Chrysler through a government-backed bankruptcy.
The Obama administration completely exited Chrysler last year after recovering $11.2 billion of its $12.5 billion bailout to the Auburn Hills-based automaker.
The new CAR findings are a follow-up to a November 2008 study from the former University of Michigan research organization
