Updated
A study authored by Thomas Hopkins, an economics professor at the Rochester Institute of Technology, and published by the National Taxpayers Union, claims that taxpayers kick in $12,200 for every GM vehicle sold in the U.S. And for every Chrysler vehicle sold here, the bill comes to a claimed $7,600.
Hopkins didn't use any terribly complicated math to come up with these figures. Rather, he's taking the bailout totals thus far ($50+ billion for GM, $13+ billion for Chrysler and $12+ billion for GMAC, which finances both of them) and dividing them by actual and projected sales for both companies for all of 2009 and 2010. Easy-peasy.
But possibly oversimplified. The study doesn't include either company's sales outside the U.S. Or the many and complicated financial obligations each automaker has. Nor does Hopkins have any apparent interest in the economic fallout that would have come from a total collapse of either GM or Chrysler... no one really knows how dark that reality might have been. But this is beyond the scope of what Hopkins is trying to accomplish, which seems to be to shed light on the true cost of propping up the weak, instead of bolstering the strong (er, the less weak).
Snippet: "Auto producers whose products American consumers find most appealing have been notably missing from the roster of bailout recipients. Our subsidies instead have gone to the poor performers, firms whose past management decisions proved faulty. As a result the bailout has created moral hazard problems, inadvertently handicapping the progress of stronger, non-subsidized producers. The problems extend beyond just the auto industry, as favored status for one financial company and its bank necessarily complicates prospects for non-subsidized rivals."
So the money's gone. The loans have been made. We own 61 percent of GM. All we can do now is hope the markets are in a buying mood at the initial public offering (IPO) for GM shares. That could come as soon as the fourth quarter of 2010, Ron Bloom, chair of the government's automotive task force told Reuters today.
