A Successful Bailout?

Tuesday, July 20, 2010

I ran across this article. Auto industry payback may surprise U.S. taxpayers, this morning. Looks like the auto industry really was serious about paying The People back. From the article:

A Free Press analysis suggests that taxpayers could get back about $74 billion of the $86 billion the government made available in 2008 and 2009 to save General Motors, Chrysler and Ally Financial, the former GMAC.

So far, the industry has paid the government $18.3 billion in debt, interest and dividends, and the prospects for payback have improved thanks to a rebound in vehicle sales and profits at the three companies. That includes the $1.5 billion Chrysler Financial has paid off and a $5-billion aid plan for suppliers that turned a profit.
I am sure Bob, our Senior Auto Industry Correspondent, will have some more comment, but I'll leave it with this graphic depicting how much has been paid back...and how much more there is to go.
I also posted this because I just couldn't stand to look at that Michelle Bachmann pic any more.

11 comments:

Bob 8:32 AM  

Even IF the government breaks even, GM will be forever known as Government Motors.

The U.S. Government backed loans to Chrysler in the the early 1980's, which Chrysler paid back early with interest, but still never lived it down.

steves 9:07 PM  

I am willing to forgive Chrysler for their loans, but the K Car I am not.

Subtlety is better than force.

The hell it ain't.

Monk-in-Training 7:51 AM  

Hey! I loved my 1983 Dodge Aries K Wagon! That lil thing was a brute! Esp after the trashing my wife and kids gave it.

Streak 11:13 AM  

So will this mean that the bailout was a good idea? It seemed like one at the time to me. I kept hearing conservatives say, "let them fail," which seemed idiotic to me.

Rickey Henderson 8:31 PM  

Well this is all nice and good, but are they actually manufacturing quality vehicles at this point?

steves 8:32 PM  

I think it was a good idea, but I will admit that I am somewhat biased.

Monk-in-Training 5:38 PM  

Ricky,
According to JD Power, two recent (this summer) studies are saying consumers are rating US automakers above imports for the first time in the 24 years the "Initial Quality Study" has existed.

So.. it appears the answer to your question is - yes.

steves 9:03 PM  

I think some are and some aren't.

Bob 10:04 PM  

"Well this is all nice and good, but are they actually manufacturing quality vehicles at this point?"

By multiple standards, the average American brand now has fewer defects than any other country of origin. This actually happened a couple years ago.

Even before then, the "worst cars" on the road (VW, Jeep, Kia, etc.) weren't that much less reliable than the "best cars" Lexus, Buick, Caddy, etc.

About every five years the quality of the entire industry was doubling, so buying the worst car of 2005 was like buying the best car in in 2000 or so.

In my opinion over the last decade or two, there were two solid import brands: Honda and Toyota. From those two brands all Japanese and some other brands gained a solid reputation, often undeserved and at the expense of American brands.

Anecdotally:
My family has always bought American brands and with few exceptions has had good luck. I have put only $31 in unscheduled maintenance in my 9 year old Chevy since I bought it new.

I often get lectured by import owners about how smart they were by not buying American. Upon questioning almost every one of them have had significant problems, but make the assumption an American car would have been worse. A co-worker bragged to me about her “better engineered” Toyota van. Upon questioning it has had engine issues, sliding door issues and tailgate problems. I will drive my Chevy thanks.

Bob 11:12 PM  

"I think some are and some aren't."

True. No country has a lock on the best cars. Each country has cars ranging from generally bad to great.

楊儀卉 2:40 AM  

與人相處不妨多用眼睛說話,多用嘴巴思考. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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