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Chrysler Bailout Loans Cost Taxpayers $1.3 Billion


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The formalities behind the sale of the government’s remaining stake in Chrysler were completed this morning, and Fiat SpA is now the official majority owner of Chrysler Group LLC. Counting purchases from both the United States and Canadian governments, Fiat now owns a 53.5-percent stake in Chrysler.

Assistant secretary for financial stability Tim Massad called the government’s exit of Chrysler, six years earlier than projected, a “major accomplishment” that “helped save a million jobs during the worst economic crisis since the Great Depression.”

We’re not sure how Massad arrived at his “million jobs saved” estimate, since the Big Three domestic automakers employed less than a quarter of that number in 2008. Regardless of potential jobs saved, this major accomplishment came with a significant price tag. Per the Treasury Department’s own estimate, the Chrysler bailout will end up costing taxpayers some $1.3 billion. In total, Chrysler received some $12.5 billion in bailout funding, of which approximately $11.2 billion has been recovered.

The initial $4 billion in bailout funding came under the Bush administration, and was given to Chrysler in December of 2008. Another $8.5 billion in funding was approved by the Obama administration, and the Chrysler bailout success will be the focus of the president’s 2012 re-election campaign.

[The Detroit News]

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Comments (3)
  1. President Obama's economic policies have been a major failure, no doubt, but the program to save the US auto industry had merit. Had GM and Chrysler gone away, thousands of jobs would have been lost and the foreign car companies had no capacity to fill the demand for cars without domestic production. What to do ? Maybe not the best plan, but a plan that eventually cost taxpayers 1.3 billion. I call that a bargin if we compare it to the billions and billions that were at risk.
    Yes, clearly the Obama administration has been a dismal failure on most issues, but this one seems to have worked out for Chrysler and the auto industry and most importantly,for Americans in general.
     
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  2. @Bill, I certainly don't disagree. What throws me is the grandstanding number of "a million jobs saved," when only a quarter of that number worked for domestic automakers at the time of the crisis. Even if you factor in every possibly connection (vendors, suppliers, service workers, etc.) the numbers don't add up.

    Drawing attention to "jobs saved" is simply sleight of hand, drawing it away from "other jobs lost" or "jobs not created". Just my 1/50 of a dollar.
     
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  3. You can thank the Obama Administration who forced both Chrysler and General Motors into the "quick", bankruptcies instead of allowing them to file a Chapter 11(Reorganizational Bankruptcy),like other Corporations do. This is payback for the "Commie" UAW and its' members for voting for the POC! Don't blame Chrysler and General Motors for this.
     
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