By Justin Sink - 12/09/13 06:13 PM EST
President Obama proudly declared that “the American auto industry is back” on Monday, after the Treasury Department announced it had sold its outstanding shares of General Motors stock.
Defending the controversial auto bailout, Obama said in a statement that he “refused” to allow GM and Chrysler — “the heartbeat of American manufacturing” — to collapse after the recession in 2008.
In total, the government invested some $49.5 billion into the leading auto manufacturer, and recovered $39 billion from selling 31.1 million shares of GM stock — for a loss of $10.5 billion.
But the president chose instead to stress that “GM has now repaid every taxpayer dollar my Administration committed to its rescue, plus billions invested by the previous Administration.”
And, Obama argued, the health of the Big Three auto manufacturers validate that investment.
“They’re profitable for the first time in nearly a decade. The industry has added more than 372,000 new jobs – its strongest growth since the 1990s,” Obama said.
Many Republicans opposed the auto bailout, charging that the assistance was the equivalent of the government picking winners and losers in the free market. 2012 Republican presidential candidate Mitt Romney famously wrote an op-ed in The New York Times headlined “Let Detroit Go Bankrupt.”
The bailout also proved consistently unpopular throughout the recession. Surveys showed a majority of Americans did not support the assistance until 2012.
The president heralded the sale as “closing the book” on the auto bailout, although the Treasury Department retains its investments in Ally Financial, which helps to underwrite car sales.
But the sale of GM stock does bookend the 2011 divestment from Chrysler, which revived a $12.3 billion bailout. The government recovered $11.1 billion of that amount.
GM CEO Dan Akerson said that the company “will always be grateful for the second chance extended to us and we are doing our best to make the most of it.”
“Continued investments, innovation, and job creation are just some of the 'returns' of a healthy GM and domestic auto industry,” he added.
The government’s exit from the auto manufacturer will also end restrictions on employee compensation. GM leadership had complained that the limits had made it difficult to attract top-shelf talent to the automaker. Still, the auto company reported earnings of $700 million on revenue of $39 billion in the third quarter.