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23 Oct 2009

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The US government's stake in General Motors is currently worth around $25 billion. That sounds like a lot of money, but it’s only about half the amount that has been poured into the flailing carmaker. So says Steven Rattner, Obama’s former auto czar.  Rattner says there's "a good chance" the US can recover the $30 billion invested in GM by the Obama administration. As a condition of getting the money, the company had to shrink itself and reorganise. However, of the $20 billion lent during the Bush years, Rattner says, "I don't think we are going to see [it] again." More banks should be as forgiving. Rattner made these observations in a speech describing how US government figures decided to oust the GM head, Rick Wagoner, put GM and Chrysler through the bankruptcy wringer and ultimately take ownership stakes in the two wounded corporations. The alternative would have been appalling – the collapse of the two would have cost more than a million jobs in the short run and pushed unemployment rates in several states above 20%, he explained. Read more: Washington Post

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