GM Won't Pay Back Government Bailout Loss

Luke Vandezande
by Luke Vandezande

Soon-to-retire General Motors CEO Dan Akerson maintains that the U.S. government’s choice to bail out the Detroit giant saved money despite losses after the Treasury Department offloaded its remaining shares.

Yesterday, the National Legal Policy Center (NLPC) asked Akerson if GM would pay back the estimated $10 billion in losses from the government bailout. “I would not accept the premise that this was a bad deal,” Akerson said, emphasizing that the government chose to buy shares in General Motors rather than issuing a loan. Akerson will retire as CEO on January 15 to be replaced by GM veteran Mary Barra.

A study by the Center for Automotive Research released last week estimated that in 2009 alone, the bailout saved roughy $40 billion in lost federal revenue and about 1 million jobs. During a speech to the National Press Club yesterday, Akerson said the company’s history is riddled with mistakes.

SEE ALSO: US Government Sells Remaining Shares in GM

“You could pick just about any point in time and find something to shake your head over. For example, in 1978 GM paid almost as much in benefits as it earned in net income,” he said. “Yet the very next year, it agreed to the largest pension increase in UAW history.

“We have been fixing the plane while it’s in the air.” That means sloughing off dead weight and Holden’s Australian manufacturing operations are only the beginning.

“…on the product front, we will reduce the number of vehicle architectures by half over the next decade,” he said.

Last week, GM announced a plan to pull Chevrolet from Europe in an effort to bolster its Opel and Vauxhall brands. Cadillac will continue to be sold there.

Discuss this story at our General Motors forum.

Luke Vandezande
Luke Vandezande

Luke is an energetic automotive journalist who spends his time covering industry news and crawling the internet for the latest breaking story. When he isn't in the office, Luke can be found obsessively browsing used car listings, drinking scotch at his favorite bar and dreaming of what to drive next, though the list grows a lot faster than his bank account. He's always on <A title="@lukevandezande on Twitter" href="">Twitter</A> looking for a good car conversation. Find Luke on <A title="@lukevandezande on Twitter" href="">Twitter</A> and <A title="Luke on Google+" href="">Google+</A>.

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  • Name Name on Jan 09, 2014

    After all that has been done to the stock holders, who have lost all value they had, and the tax payers by the transfer of GM to Union control by the bailout. I, for one, never intend to buy a new GM product again.