The $80 billion federal gamble on General Motors and Chrysler that began five years ago this month has paid off, according to Sen. Joe Donnelly, D-Ind.
What we have seen is nothing short of a rebirth and an explosion in manufacturing in this sector, Donnelly said Tuesday during a conference call with reporters.
Fresh off a tour of Indiana auto plants, including the GM pickup assembly operation in Allen County, Donnelly said the number of Hoosier auto manufacturing jobs has bounced back to more than 100,000, nearly as many as in early 2008.
The industry had shed 33,000 jobs in Indiana by June 2009 before beginning to rebound from the nation’s recession and financial crisis of that time.
The state’s automakers and workers have done an extraordinary job in coming back and making the best-quality vehicles in the world. We have seen their market shares continue to increase, Donnelly said.
A report issued Tuesday by Donnelly, who voted in favor of federal loans to the two automakers as a member of the House, noted that Chrysler has invested nearly $1.65 billion and GM $465 million in their Indiana operations since 2010. GM’s spending included a $275 million expansion of its Allen County factory.
In the same time, Honda, Subaru and Toyota have combined to invest $145 million in Hoosier plant upgrades, the report said.
Chrysler paid back its federal loans in 2011. And on Monday, the Treasury Department announced it had sold the last of the nearly 61 percent stake it once held in GM as part of the rescue package started by then President George W. Bush and continued under President Barack Obama.
Donnelly said he was touring the GM plant in Marion last week when an executive mentioned a burst of trading in the automaker’s shares.
One of the folks on the management team looked and said, Boy, the stock action is really up today. The government must be selling.’ And they looked at me, and I said, I have no idea,’ Donnelly recalled with a laugh.
We always said right from the start, Look, our goal is to put these (companies) back into private hands as soon as we possibly can,’ and that’s what we’ve done, he said.
The nonprofit Center for Automotive Research in Ann Arbor, Mich., issued a report Monday contending the federal government lost nearly $14 billion on the bailout but averted a potential loss of about $105 billion in tax revenue during 2009 and 2010 had GM and Chrysler gone out of business.
Those shutdowns would have cost the national economy more than 4 million jobs and $284 billion in paychecks, the report said.