'Taxpayers Could Lose up to $20 Billion' in GM/UAW Boss Bailout

A recent editorial in the Orange County (Calif.) Register estimates that federal taxpayers will lose up to $20 billion in the politically motivated bailout of General Motors (GM) by the George W. Bush and Barack Obama administrations.  Moreover, GM’s production employment is now lower by thousands than it was prior to the bailout.  The extraordinarily expensive White House interventions ripped off bondholders as well as taxpayers, and arguably resulted in more jobs being lost than would have been the case if politicians had stayed out of the way.  The biggest beneficiaries of the bailout have clearly been United Autoworkers (UAW) union bosses.  Under the deal, UAW-controlled benefit funds received billions of dollars more from bankrupt “old” GM than they could possibly have done through a normal bankruptcy process:

In the case of GM, the lack of government involvement might have led to a better reorganization than was achieved, Andrew T. LeFevre told us; he’s an auto industry analyst with the Michigan-based Mackinac Center for Public Policy. At worst, parts of GM would have been sold off or merged with other auto companies, such as Chrysler or Ford.

We would add that, while under government control, GM axed several divisions with thousands of jobs, including Hummer, Pontiac and Saturn.

Editorial: GM bailout proves a clunker for taxpayers – The Orange