- Efforts Saved Jobs, Helped Stabilize Economy During Financial Crisis
WASHINGTON – As the Troubled Asset Relief Program (TARP) continues to wind down, the U.S. Department of the Treasury today announced that it has sold all of the remaining shares of General Motors (GM) common stock.
“The President’s leadership in responding to the financial crisis helped stabilize the auto industry, and prevent another Great Depression. With the final sale of GM stock, this important chapter in our nation’s history is now closed,” said Treasury Secretary Jacob J. Lew. “The President understood that inaction could have cost the broader economy more than one million jobs, billions in lost personal savings, and significantly reduced economic production. As a result of his efforts, which built on those of the previous Administration, more than 370,000 new auto jobs have been created, and all three U.S. automakers are profitable, competitive, and growing.”
Treasury has recouped a total of $39 billion from the original GM investment. To date, Treasury has recovered a total of $432.7 billion on all TARP investments – including the sale of Treasury’s shares in AIG – compared to $421.8 billion disbursed. Treasury will continue to wind down the remaining investments in a manner that balances maximizing the taxpayer’s return on investments with the speed of our exit.
GM STATEMENT ON U.S. TREASURY FULL OWNERSHIP EXIT
DETROIT – The following statement is attributable to General Motors Chairman and CEO Dan Akerson:
“The U.S. Treasury’s ownership exit closes just one chapter in GM’s ongoing turnaround story. We will always be grateful for the second chance extended to us and we are doing our best to make the most of it. Today is not dramatically different from the hundreds of preceding days during which we have worked to make GM a company our country can be proud of again.
“Continued investments, innovation, and job creation are just some of the “returns” of a healthy GM and domestic auto industry. Our work continues uninterrupted, and we will keep our sights squarely on our customers and transforming the way we do business.”
NEW STUDY SAYS GM BAILOUT SPARED 1.2 MILLION JOBS
Auto industry would have recovered, but Midwest would have been devastated
DETROIT – The U.S. government bailout of General Motors spared 1.2 million jobs in 2009 and preserved $39.4 billion in personal and social insurance tax collections in 2009 and 2010, according to a Center for Automotive Research study released Monday.
“Any complete cost-benefit assessment of the federal assistance to GM in its restructuring must consider the total net returns to the public investment…” researchers Sean McAlinden and Debra Maranger Menk wrote in “The Effect on the U.S. Economy of the Successful Restructuring of General Motors.”
The infusion of money into GM and Chrysler by the administrations of Presidents George W. Bush and Barack Obama avoided loss to the U.S. of $105.3 billion in transfer payments and personal and social insurance tax collections. Additionally, 2.6 million jobs were saved in 2009 alone and $284.4 billion in personal income was preserved over 2009-2010.
“If the U.S. government had refused to assist (GM and Chrysler)… in a financial crisis of unprecedented proportions, then the whole U.S. economy was operating without a safety net, with the exception of course, of the banking system,” McAlinden and Maranger Menk conclude.
The center independently funded the new study as a follow up to a November 2008 analysis.
For more details on Treasury’s lifetime cost estimates for TARP programs, please visit Treasury’s Monthly 105(a) Report to Congress on TARP (.pdf)
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