Skip to Content
Streetsblog San Francisco home
Streetsblog San Francisco home
Log In
Streetsblog.net

GM Bailout Will Cost Taxpayers as Much as $12 Billion

"Government Motors" no more. The federal government is calling in its loans to General Motors, which received a taxpayer-funded injection of almost $50 billion at the height of the financial meltdown in 2008.

false

Over the next 12 to 15 months, President Obama says the world's largest automaker, which has been turning a healthy profit since 2010, must buy back its remaining 500 million shares from the government. But, unlike the bank bailouts, the government rescue of GM won't result in a payout for its taxpaying saviors.

The federal government will receive only the going share prices, currently about $27, for its investment -- about half of the purchase price of roughly $54 a share. US News and World Report estimates the bailout of GM will cost taxpayers between $10 and $12 billion.

So, chalk up another big subsidy for driving. Taxpayers also lost $1.3 billion on the bailout of Chrysler. And then there was the $3 billion Cash for Clunkers program -- another stimulus-era subsidy for the auto industry.

There's a fair argument to be made that the economic fallout from the dissolution of General Motors -- which employs 202,000 people worldwide -- during the lowest point of the worst recession in generations would have been disastrous. But the $10-$12 billion bailout is another indication of the high cost of America's auto dependence.

Remember, this wasn’t the first time U.S. taxpayers bailed out the domestic auto industry. In 1980, Chrysler — reeling from the U.S. oil embargo — received $1.5 billion from the government. It will be interesting to see whether the American auto industry, when it faces the next collapse in demand for its product, will again be the beneficiary of a taxpayer-financed insurance policy against financial collapse.

Stay in touch

Sign up for our free newsletter

More from Streetsblog San Francisco

Op-Ed: It’s Time to Extend the Central Subway to North Beach

There are abandoned tunnels under Stockton Street: here’s how they could transform San Francisco’s subway system.

May 8, 2025

Talking Headways Podcast: ‘Normal’ is Not Correct, Someone Died Here

After a crash, the debris is quickly cleaned up and everyone moves on (usually too quickly). But these two experts are asking us to all slow down.

May 8, 2025

LA Metro Names Former SFPD Chief Bill Scott as Chief of Police

Chief Scott and Metro leadership emphasized that keeping Metro transit safe would require a multi-faceted approach that included the deployment of officers as well as collaboration with the community, ambassadors, and service providers. "Sometimes enforcement is the answer," Scott said. "Sometimes it's not."

May 7, 2025
See all posts