General Motors Still Losing Billions (Letter to the Editor)

General Motors Still Losing Billions (Letter to the Editor)

April 29, 2010
Originally published in The Washington Times

The Washington Times was right to criticize the Obama administration for its
misleading hype about General Motors repaying $6.7 billion of the $50 billion it
got from taxpayers (“Government Motors repayment fraud,” Comment & Analysis,
Monday). The bailout of GM was unnecessary, and taxpayers will never get their
money back.

Most of the $50 billion taxpayers gave the company was converted into
overpriced stock that will be worthless if GM goes under. The GM bailout, which
is still losing billions of dollars, is similar to a failed British bailout in
the 1970s that ruined England’s ailing automakers. GM might have had a better
chance of survival if it had just filed for bankruptcy without seeking a
bailout, as economists and bankruptcy experts have noted. That would have let GM
shed its rigid, costly collective-bargaining agreements with the United Auto
Workers union (UAW), which has crippled it financially.

But the Obama administration used the bailout to keep such red tape intact
while giving much of GM to the UAW at taxpayer expense and forcing
GM to make unprofitable car models. It also inflicted heavy losses on GM’s
used-car and parts dealers through a wasteful “cash for clunkers” program that
destroyed used cars.