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David Kiley Headshot

Saving GM Was a Great Investment

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This week marks the end of so-called "Government Motors." Now, let us consider the math.

Now, that the U.S. Treasury has exited its partial ownership of General Motors, the bill to the tax-payer is reported to be $10.5 billion. Libertarians and many a tea party Republican decry the bill. But are we forgetting the $24 billion the Republican-led government shutdown cost the economy?

How about we tally up the number of unneeded weapons systems and other military hardware approved by Congress and signed for by Presidents of both parties. A lot of that hardware goes unused until it rusts away, or gets sold off at auction for pennies on the dollar.

We are in a legitimate discussion now about the minimum wage and whether or not a too-low wage is really a subsidy to McDonald's, Burger King and the rest of the fast-food industry, Walmart, etc. Why? Because the wages and benefits are so low, the tax-payer ends up subsidizing those companies' workers pay with Medicaid, food stamps and the rest.

And that brings me to the weird and unfair characterization of General Motors the last four years as "Government Motors."

While it is true that the U.S. Treasury bankrolled General Motors' bankruptcy restructuring to the tune of $49.5 billion and took stock in the automaker in order to one day (this week) get some of that back by selling stock, it is also true that this was one of the best investments the government has made in decades.

Why? Because the $10.5 billion gap between what the Treasury laid out and what it recouped in the stock market is a lie. The government will see a clear profit if it hasn't already.

It is difficult to know how many of the GM employees that would have been furloughed had GM gone into liquidation would have been ended up on unemployment and food-stamps, but I reckon it to be in the tens of thousands. Instead, workers -- blue collar and white -- have been paying taxes to the Feds and their states and communities for the last four years, and will continue to do so. Take all that together, and you are well above $10.5 billion.

I have also heard that President Barack Obama decided to rescue GM and Chrysler merely to help the UAW and to win Ohio in the 2012 election cycle. He did both. But to call the rescue a subsidy for the UAW is a pretty small-beer analysis of what happened and why.

As I was on Facebook this week, I had a sponsored post on my newsfeed from Chevy Malibu. I perused the comments. Many people commented about how happy they were with their Malibu. A few talked about other Chevrolets they owned and liked. Many took to the comment board to decry "government motors," and how they would never again buy a GM vehicle because it had become a socialist company with government ownership.

Those people are entitled to their opinions. GM believes that the government exit from GM ownership will boost sales, especially for Chevy Silverado and GMC Sierra pickups -- the idea being that a lot of would-be pickup truck buyers in the red-state South have been boycotting GM the last four years.

GM execs are probably right. But I wonder if those same people resent their tax money being spent on military hardware that ends up being scrapped or rusted before it ever gets used, or think about the Walmart employee selling them cheap jeans from Vietnam or a discount hammer that comes from China and who needs their taxpayer funded food stamps and Medicaid to keep food on the table, all that while Walmart makes huge profits and could afford to pay their workers more if it chose to. The jeans were $9, sure, but GM boycotters aren't counting their tax dollars that go into keeping them that cheap.

Before we boycott a company or brand, it seems like we ought to be a bit more circumspect, and do a little light math. Having a vibrant GM producing top-shelf vehicles that are winning prestigious awards by decently paid employees who support their U.S. communities seems like a very good investment indeed.