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Obama says taxpayers will get auto bailout money back

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Obama says taxpayers will get auto bailout money back

David Shepardson / Detroit News Washington Bureau

Washington -- President Barack Obama said taxpayers will be repaid for the $85 billion bailout -- at least the portion awarded by his administration to automakers.

"We are going to get back all the money that we invested in those car companies," Obama said in an interview broadcast on ABC's "The View," apparently referring to the $60 billion portion his administration used to restructure the auto industry. "You now have all those U.S. companies showing a profit."

The most recent government estimate is that taxpayers will lose $24.3 billion on the bailout of General Motors Co., Chrysler Group LLC and Ally Financial Inc. Treasury Secretary Timothy Geithner said this month he thinks that estimate will decline further.

"That progress is significant, but we've still got a long way to before we're all the way back," Obama said.

The Bush administration loaned GM and Chrysler $17.4 billion in December 2008. The past administration also infused nearly $6 billion in Detroit-based auto and mortgage finance company GMAC, which is now known as Ally Financial.

Obama is set to visit two auto plants Friday in Detroit to tout the success of GM and Chrysler. He will visit GM's Detroit-Hamtramck Assembly plant and Chrysler's Jefferson-North Assembly plant.

Chrysler CEO Sergio Marchionne and GM chairman and CEO Edward Whitacre Jr. will lead him on short tours of the plants. United Auto Workers President Bob King will also take part.

Transportation Secretary Ray LaHood, auto czar Ron Bloom and auto recovery czar Ed Montgomery will accompany the president.

Obama plans to tout the fact that he agreed to rescue the companies -- a move that saved 1 million jobs or more, he will argue.

But many Republicans still oppose the decisions to save the companies -- or at least the way the government rescued them.

Former Arkansas Gov. Mike Huckabee told the Charlotte Observer this month that both Bush and Obama were wrong to save GM. Both tapped the $700 billion Troubled Asset Relief Program, known as TARP, to fund the auto rescue.

"I disagreed with President Bush on TARP. I thought that was a horribly wrong-headed decision. And I think history will prove that it teed up the even greater insanity of the stimulus and the bailouts. As tragic as it would have been (to let GM fail), the greater tragedy is setting up an entitlement mentality where nobody has the risk of failure except the people who pay," Huckabee said.

Sen. Debbie Stabenow, D-Lansing, said Michigan should be grateful to Obama.

"We need to thank him," Stabenow said in an interview this week. "This was extremely difficult and he stepped up and was very courageous to make a commitment to having an American auto industry. But she said the government needs to keep working on manufacturing. "There's more to do."

The government owns a 61 percent stake in GM, a 10 percent stake in Chrysler and a 56 percent in Ally Financial Inc.

The nearly four-hour visit to Michigan will be Obama's first trip to Detroit as president.

Previewing a message for tomorrow, Obama said on "The View" the new clean car technology that the government is helping to fund will make U.S. companies world leaders.

"Don't bet against American workers. Don't bet against American ingenuity," Obama said. "We still have the best workers in the world, the best technology in the world."

GM spokesman Greg Martin said the company is happy Obama is coming to visit.

"We're proud to update the president of the United States on our progress," Martin said. "There are a lot of great things going on at GM today. We're a new company with a bright future where our focus on designing, building and selling the world's best vehicles is generating strong sales and profits."

The Obama administration infused about $60 billion into the automakers, finance companies and an auto supplier support program that has since been ended.

Obama will visit Ford Motor Co.'s Chicago assembly plant next Thursday.

From The Detroit News: http://detnews.com/article/20100729/AUTO01/7290447/1148/auto01/Obama-says-taxpayers-will-get-auto-bailout-money-back#ixzz0v62xqa9S

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Obama: Taxpayers to recover auto industry bailout funds

Staff and wire reports July 29, 2010 - 2:42 pm ET

President Barack Obama said in an interview broadcast today that the U.S. government will recover taxpayer money spent to bail out the auto industry.

The auto industry “tells a good story” of how the United States is rebounding from the worst recession since the 1930s, Obama said during an appearance on the ABC daytime program "The View."

The program was taped Wednesday in New York.

In exchange for U.S. bailout money that reached $85 billion, the auto industry has been restructured, and “you now have all those auto companies showing a profit," Obama said.

“They've re-hired 55,000 workers,” he said. “We are going to get all the money back that we invested.”

To tout the auto industry's recovery, the president is scheduled to visit General Motors Co. and Chrysler Group LLC auto plants in Michigan on Friday.

"That progress is significant, but we've still got a long way to go before we're all the way back," Obama said.

"And the best thing is we're now creating an entirely new clean energy, clean car technology around advanced batteries and whatnot that will make us a world leader,” he added.

The White House issued a 5-page report on the state of the auto industry today.

"In the year before GM and Chrysler emerged from bankruptcy, the auto industry shed 334,000 jobs," the report said, citing the Bureau of Labor Statistics. "In the year since, auto industry employment has increased by 55,000 jobs. This is the fastest year-over-year growth in auto employment since 1999."

The White House also credited the Treasury Department's Automotive

Supplier Support Program for stabilizing the battered automotive parts and supply industry.

"After experiencing 54 bankruptcies in early 2009, bankruptcy filings have largely subsided since October 2009," the 5-page report said. "Based on industry surveys, only 10 percent of suppliers are in violation of their debt covenants."

The $5 billion supplier support program was terminated in early April.

The most recent government estimate is that U.S. taxpayers will lose $24.3 billion on the bailout of GM, Chrysler and Ally Financial Inc.

Treasury Secretary Timothy Geithner said this month he thinks that estimate will decline further.

The new report issued today also said the prospect of taxpayer repayment and a faster-than-anticipated exit from government involvement in the industry has improved.

The Obama administration pumped about $60 billion into the automakers, finance companies and the program for ailing automotive parts makers.

The Bush administration initially loaned GM and Chrysler $17.4 billion in December 2008 to keep the automakers afloat until the Obama administration could create a restructuring plan. In addition, the Bush White House pumped nearly $6 billion into auto and mortgage finance company GMAC, now Ally Financial.

GM and Chrysler were also quickly ushered in and out of bankruptcy under the Obama administration's turnaround.

GM plans an initial public offering by year-end. The stock sale will be the first step toward undoing the government's 60.8 percent stake in the automaker.

Chrysler, now controlled by Italy's Fiat SpA, does not anticipate going public until 2011. The U.S. government owns 9.9 percent of Chrysler.

GM has paid back $7.7 billion in loans and interest, including a $6.7 billion payment in April, on the $50.7 billion spent on its rescue, while Chrysler has returned $2.5 billion of the $12.5 billion it was granted under the government's bailout.

In May, Chrysler Financial repaid $1.9 billion to the Treasury that was made available through the Trouble Asset Relief Program. In addition, Chrysler Financial has already fully repaid the $1.5 billion TARP loan that it received to support auto financing.

Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20100729/OEM/100729845/1142#ixzz0v7EgGvLP

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Obama to tout Detroit prospects, payback

By Justin Hyde

Free Press Washington Staff

WASHINGTON – President Barack Obama will tout on Friday the prospects of General Motors and Chrysler adding jobs and repaying much of the aid they received last year during his first visit to Detroit since taking office.

The visit, along with a stop at a Ford plant in Chicago next week, represents a large wager by his administration that the unpopular $86-billion salvage of Detroit's auto industry can be turned into a political profile in courage ahead of tough mid-term elections. In a new report today, the White House contended the U.S. auto industry as a whole had added 55,000 jobs since June 2009, the largest employment growth since 1999.

"The president didn't think that walking away from a million jobs and people in these communities made a lot of sense," said White House spokesman Robert Gibbs. Noting that radio host Rush Limbaugh and other critics had called for letting GM and Chrysler collapse, Gibbs added: "I'll let those that sat in the cheap seats a year ago and wanted to walk away from a million explain to every one of those workers why they made that decision."

Obama said in an interview on ABC's "The View" that he expected GM and Chrysler to pay back the roughly $60 billion that his administration had put into their bankruptcies. The government’s most recent official estimate of its return on the rescues forecast a loss of $24.3 billion; a Free Press analysis suggested it could be half that given the improvement in the U.S. auto industry.

Obama said before his administration shepherded GM and Chrysler through bankruptcy in 2009, the government "had been bailing them out for years before that, just asking nothing in return."

“You now have all those U.S auto companies showing a profit," Obama said on "The View," in an interview taped Wednesday. "They've rehired 55,000 workers. We are going to get all of the money back that we invested in those car companies."

“And the best thing is we're now creating an entirely new clean energy, clean car technology around advanced batteries and whatnot that will make us a world leader,” he added.

The Bush administration lent GM $13.4 billion and Chrysler $4 billion in December 2008, money Obama auto task force officials have maintained was unlikely to ever be recovered.

Obama will stop at Jefferson North first, followed by a quick tour around GM's Detroit-Hamtramck plant where the automaker will assemble the Chevrolet Volt. He will be accompanied by top officials from both automakers and the UAW.

Ron Bloom, head of the administration's auto task force, declined to provide more specific estimates of the government's return on its spending or divulge details of GM's upcoming public stock offering.

"Right now the trajectory is positive," he said.

GM is expected to launch a public stock offering later this year, the first step towards unwinding the government's 60.8% stake. Chrysler has said it would not consider a stock sale until 2011; the U.S. government owns 9.9% of its equity.

GM has paid back $7.7 billion in loans and interest on the $50.7 billion spent in its rescue, while Chrysler has paid back $2.5 billion of the $12.5 billion it received. The U.S. Treasury also spent $16.3 billion stabilizing Ally Financial, formerly GMAC.

LINK:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100729/BUSINESS01/100729038/1210/Obama-GM-Chrysler-will-repay-cost-of-restructuring&template=fullarticle

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Obama to tout Chrysler, GM repaying aid, adding jobs

BY JUSTIN HYDE

FREE PRESS WASHINGTON STAFF

WASHINGTON -- President Barack Obama will tout today the prospects of General Motors and Chrysler adding jobs and repaying much of the aid they received last year during his first visit to Detroit since taking office.

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The visit, along with a stop at a Ford plant in Chicago next week, represents a large wager by his administration that the unpopular $86-billion salvage of Detroit's auto industry can be turned into a political profile in courage ahead of midterm elections.

• RELATED: Obama visits Detroit, looks for love in factories

In a new report today, the White House contended the U.S. auto industry as a whole had added 55,000 jobs since June 2009, the largest employment growth since 1999, and that Detroit's three automakers could add 11,000 jobs by the end of this year.

"The president didn't think that walking away from a million jobs and people in these communities made a lot of sense," said White House spokesman Robert Gibbs. Noting that radio host Rush Limbaugh and other critics had called for letting GM and Chrysler collapse, Gibbs added: "I'll let those that sat in the cheap seats a year ago and wanted to walk away from a million explain to every one of those workers why they made that decision."

Obama said in an interview on ABC's "The View" that he expected GM and Chrysler to pay back the roughly $60 billion that his administration had put into their bankruptcy reorganizations. The government's most-recent official estimate of its return on the rescues forecast a loss of $24.3 billion; a Free Press analysis suggested it could be half that given the improvement in the U.S. auto industry.

Obama said before his administration shepherded GM and Chrysler through bankruptcy in 2009, the government "had been bailing them out for years before that, just asking nothing in return."

"You now have all those U.S. auto companies showing a profit," Obama said on "The View," in an interview taped Wednesday. "They've rehired 55,000 workers. We are going to get all of the money back that we invested in those car companies."

"And the best thing is we're now creating an entirely new clean-energy, clean-car technology around advanced batteries and whatnot that will make us a world leader," he added.

The Bush administration lent GM $13.4 billion and Chrysler $4 billion in December 2008, money Obama auto task force officials have maintained was unlikely to ever be recovered.

Obama will stop at Chrysler's Jefferson North first, followed by a quick tour around GM's Detroit-Hamtramck plant where the automaker will make the Chevrolet Volt. He will be joined by top officials, including the CEOs of GM and Chrysler, Gov. Jennifer Granholm and the UAW.

Ron Bloom, head of the administration's auto task force, declined to provide more specific estimates of the government's return on its spending or divulge details of GM's upcoming public stock offering. "Right now, the trajectory is positive," he said.

GM is expected to launch a public stock offering this year, the first step toward unwinding the government's 60.8% stake. Chrysler has said it would not consider a stock sale until 2011; the U.S. government owns 9.9% of its equity.

GM has paid back $7.7 billion in loans and interest on the $50.7 billion spent in its rescue, while Chrysler has paid back $2.5 billion of the $12.5 billion it received.

The U.S. Treasury also spent $16.3 billion stabilizing Ally Financial, formerly GMAC.

link:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100730/BUSINESS06/7300359/1210/Business01/Obama-to-tout-Chrysler-GM-repaying-aid-adding-jobs&template=fullarticle

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