General Motors Bailout Cost Taxpayers $11.2 Billion (2024)

FAQs

General Motors Bailout Cost Taxpayers $11.2 Billion? ›

U.S. taxpayers lost more than $11.2 billion as a result of the federal bailout of General Motors, according to a government report released Wednesday. The $11.2-billion loss includes a $826-million write-off in March from government investments in the “Old GM” before the company's 2009 bankruptcy, the report said.

After receiving a $49.5 billion taxpayer funded bailout during the last financial crisis, a bailout that cost U.S. taxpayers $11.2 billion and led General Motors (GM) to subsequently make more than $22 billion, GM is now warning that it will move more production overseas.

DETROIT — The U.S. government ended up losing $10.5 billion on the General Motors bailout, but it says the alternative would have been far worse.

The U.S. government spent about $50 billion to bail out GM. As a result of the company's 2009 bankruptcy, the government's investment was converted to a 61 percent equity stake in the Detroit-based automaker, plus preferred shares and a loan.

In fact, GM did not repay the loans with money it earned from selling cars. Instead, GM repaid the TARP loans with money it withdrew from another TARP fund at the Treasury Department. The day before the GM story broke, Neil Barofsky, the government TARP watchdog, testified before the Senate Finance Committee.

GM's Bailout Cost Taxpayers $11.2 Billion | Time.

Despite the billions paid back by GM today, there are billions more bailout dollars still outstanding.

The U.S. government spent $50 billion to bail out GM, meaning it recovered 77.6 percent of its investment amount.

Ten years later, Zandi is unequivocal that the auto bailout was crucial to reviving U.S. industry in the Great Recession. For one thing, the U.S. recovered all but about $9 billion of the auto bailout money.

"With the final sale of GM stock, this important chapter in our nation's history is now closed," Lew said, announcing the sale. The net? Taxpayers lost $10.7 billion on the deal.

What was the most expensive bail ever? ›

Number 1 Highest Bail Amount In History- Robert Durst

In 2003, Robert Durst found himself in a jail cell with a grand total of 3 billion dollars over his head. The court set his bail this high not only because of the nature of his crimes but also because he was considered a flight risk.

Apologists for the bailout assert that were it not for the federal government's emergency intervention, America would have lost one of its premier industries, along with a critical mass of skilled labor, physical plants, technology, and suppliers.

The Coronavirus Aid, Relief, and Economic Security Act cost $2.2 trillion, making the CARES Act the most extensive financial rescue package in U.S. history.

General Motors annual net current debt for 2022 was $0.373B, a 87.19% decline from 2021. General Motors annual net current debt for 2021 was $2.912B, a 951.26% increase from 2020.

Long term debt can be defined as the sum of all long term debt fields. General Motors long term debt for the quarter ending March 31, 2023 was $77.411B, a 0.84% increase year-over-year. General Motors long term debt for 2022 was $75.921B, a 0.35% increase from 2021.

Each share of GM stock became a share in Motors Liquidation. While it was widely reported that the shares were worthless, those shares still traded, then and now, over the counter. It was as though people just couldn't believe GM shares could actually be worthless.

GM's income tax. There are a couple of reasons why GM has not owed federal income tax and has received rich refunds over the past decade. First, U.S. tax law allows companies to deduct past losses to offset current profits. It's called "net operating loss carryforwards," said Gabrielsen.

The U.S. bailout of GM and Chrysler, which received about $12.5 billion, saved 1.5 million jobs in the United States, according to the Center for Automotive Research.

GM's full-year 2022 revenue was $156.7 billion, net income attributable to stockholders was $9.9 billion and EBIT-adjusted was a record $14.5 billion.

Ford Motor Company was able to survive without entering bankruptcy partly due to a large line of credit which it obtained in 2007. The U.S. automakers were more heavily affected by the crisis than their foreign counterparts, such as Toyota.

Was the 2008 bailout repaid? ›

After the government essentially took over the companies to stabilize the housing market in 2008, the Treasury pumped in nearly $200 billion over the following years. While the companies haven't yet repaid any of the principal, they have been making sizeable dividend payments every quarter.

(NYSE: GM) saved 1.2 million U.S. jobs and preserved $34.9 billion in personal income and social insurance (Social Security, Medicare) payments.

President Bush signed the bill into law within hours of its enactment, creating a $700 billion dollar Treasury fund to purchase failing bank assets. The revised plan left the $700 billion bailout intact and appended a stalled tax bill.

In total, U.S. government economic bailouts related to the global financial crisis had federal outflows (expenditures, loans, and investments) of $633.6 billion and inflows (funds returned to the Treasury as interest, dividends, fees, or stock warrant repurchases) of $754.8 billion, for a net profit of $121 billion.

During the financial crisis of 2007–2008, the Federal Reserve bailed the company out for $180 billion and assumed controlling ownership stake, with the Financial Crisis Inquiry Commission correlating AIG's failure with the mass sales of unhedged insurance.

Though GM and Chrysler eventually did get a bailout — Ford did not need help because it had fortuitously secured a large amount of financing shortly before the crisis — it was not all sweetness and light.

In late 2008, the combination of an historic recession and financial crisis pushed the American auto industry to the brink of collapse. Access to credit for car loans dried up and auto sales plunged 40 percent. Auto manufacturers and suppliers dramatically curtailed production.

The automotive industry was weakened by a substantial increase in the prices of automotive fuels linked to the 2003–2008 energy crisis which discouraged purchases of sport utility vehicles (SUVs) and pickup trucks which have low fuel economy.

As a result, some retirees' pensions were cut by as much as 70%. But GM did step in to cover pension losses for union workers. Those who lost benefits were 4,044 workers in Indiana, 5,181 in Ohio, 5,859 in Michigan and thousands of others around the country.

During the '80s and more so in the '90s, the push towards fuel efficiency crippled GM in another way. Because the company was accustomed to making the biggest profit on its larger, less fuel efficient models, it failed to innovate on the product development front and was left behind.

Is GM getting rid of gas engines? ›

General Motors is one of few automakers that's said it will stop making internal combustion engines entirely by 2035 to focus on electric powertrains.

Robert Dust – $3 billion

Currently holds the record for the highest amount of bail set in the history of America. He was accused of murdering his first wife, Kathleen McCormack, his old-time friend Susan Berman and his neighbor Morris Black.

FTX co-founder Sam Bankman-Fried, who is accused of misappropriating billions of dollars deposited in the cryptocurrency exchange, walked out of a federal courthouse in New York on Thursday after he posted a $250 million personal recognizance bond.

Likewise, average bail amounts have increased from $25,400 to $55,500, a 118% change increase for the same population. the average bail amounts doubled. people could be released from pretrial detention.

In September 2009, Ford entered into an agreement with the Department of Energy and borrowed $5.9 billion as part of a loan program created to finance automotive projects designed to help vehicles built in the U.S. meet higher mileage requirements and lessen U.S. dependence on foreign oil.

U.S. taxpayers no longer own any of automaker General Motors. The Treasury sold the last of its remaining 31.1 million GM shares today. It started with 500 million shares in 2010.

The Associated Press reports things are so bad that General Motors has been forced to park 95,000 unfinished vehicles. According a regulatory filing by GM, most of the vehicles sitting in storage were built in June but are waiting on components that are scarce due to the global shortage on semiconductor chips.

NEW YORK (Reuters) - Wells Fargo & Co, the fourth-largest U.S. bank by assets, on Wednesday said it repaid the $25 billion government bailout it received during the financial crisis, after last week selling $12.25 billion in stock.

In the years since the collapse, the key regulators have claimed they could not have rescued Lehman because Lehman did not have adequate collateral to support a loan under the Fed's emergency lending power.

What percentage does China own of General Motors? ›

This is further underlined on further inspection of the companies' Revenue Growth Rates [YoY]: while GM's is 23.41%, Ford's is 15.93%. Ford's Total Debt to Equity Ratio of 325.42% is significantly higher than GM's (160.36%), which serves as an indicator that Ford is the higher risk investment of the two companies.

Currently, Ford has a total long-term debt of $140 billion, while GM is right behind with $115 billion in the same category. Tesla, on the other hand, has just $5 billion in long-term debt, and plenty of cash to show for it.

GM Financial was accused of violating the Servicemembers Civil Relief Act by illegally repossessing 71 servicemembers' vehicles and by improperly denying or mishandling over 1,000 vehicle lease termination requests, the Justice Department said in a statement on Wednesday.

Amount of investment

A February 18, 2009 CNN article said the bailout could cost U.S. taxpayers $130 billion, but this number does not consider that monies recovered later. As of early June 2009, the Bush and Obama administrations had invested $80.3 billion.

President Bush signed the bill into law within hours of its enactment, creating a $700 billion dollar Treasury fund to purchase failing bank assets. The revised plan left the $700 billion bailout intact and appended a stalled tax bill.

Apologists for the bailout assert that were it not for the federal government's emergency intervention, America would have lost one of its premier industries, along with a critical mass of skilled labor, physical plants, technology, and suppliers.

In 2021, hamstrung by the global microchip shortage, the automotive industry lost more than $200 billion. Eleven million fewer vehicles were produced; manufacturing plants idled.

Why did the government bail out the auto industry? ›

The fear of millions of jobs being lost, along with resurgent German and Japanese auto industries, had many concerned that an already weak economy could be pushed into a depression. All these factors eventually led to Chrysler's 1979 bailout by the federal government.

The Coronavirus Aid, Relief, and Economic Security Act cost $2.2 trillion, making the CARES Act the most extensive financial rescue package in U.S. history.

The U.S. response to the coronavirus has already been the costliest economic relief effort in modern history. At $4 trillion, the assortment of grants, loans and tax breaks exceeded the cost of the Afghanistan war.

After the government essentially took over the companies to stabilize the housing market in 2008, the Treasury pumped in nearly $200 billion over the following years. While the companies haven't yet repaid any of the principal, they have been making sizeable dividend payments every quarter.

U.S. taxpayers no longer own any of automaker General Motors. The Treasury sold the last of its remaining 31.1 million GM shares today. It started with 500 million shares in 2010. The taxpayer loss on the GM bailout is $10.5 billion.

General Motors annual net current debt for 2022 was $0.373B, a 87.19% decline from 2021. General Motors annual net current debt for 2021 was $2.912B, a 951.26% increase from 2020.

Though GM and Chrysler eventually did get a bailout — Ford did not need help because it had fortuitously secured a large amount of financing shortly before the crisis — it was not all sweetness and light.