Program Overview - Five Year Update
When President Obama took office, America’s automobile
industry was on the brink of collapse. The financial crisis had nearly frozen
access to credit for vehicle loans and sales had plunged by 40 percent. Faced
with that sober reality, the Obama Administration moved quickly to protect the
broader economy by stabilizing the industry. These actions saved more than one
million American jobs, according to independent estimates.
The automobile industry is now profitable and creating jobs
at the fastest pace in 15 years. In fact, since June 2009, when GM and Chrysler
emerged from bankruptcy, more than 340,000 jobs have been created.
Treasury exited its investment in Chrysler in 2011,
recovering 90 percent of the taxpayer funds six years ahead of schedule, and
expects to complete its exit from GM by the first quarter of 2014, subject to
market conditions. September 2013 was a busy month for the auto program. Treasury
announced that it has recouped more than 70% of the initial investment and
reduced the taxpayer’s stake of GM stock from over 60% at the peak to only
7.3%. Treasury also announced that it
will continue its sales of GM common stock by launching a third pre-defined
written trading plan. Finally, Ally, formerly known as GMAC, announced that it
will repay taxpayers an additional $6 billion, subject to Federal Reserve
approval of a transaction.
While the auto industry rescue may end up as a net cost to
the government, the cost of a disorderly liquidation to the families and
businesses across the country that rely on the auto industry would have been
far higher. These actions not only saved GM and Chrysler but they also saved
many businesses up and down the supply. They even helped Ford, as its CEO has
While there is still more to work to be done, the decision to rescue the
American auto industry helped the economy recover from the financial crisis and
enabled the auto industry to come roaring back.