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GM Reports Profit But Owes USA

Recorded on February 16, 2012

From The Heritage Foundation, I'm Ernest Istook.

General Motors reported a profit of $7.6-billion for last year—a company record.

Since taking bankruptcy in 2009, GM reduced its number of brands, closed factories, closed dealerships and revised its union contracts.

With lower costs, it makes more profit even while selling fewer cars.

Does that mean the auto bailout worked? No. GM still owes government $14-billion, even after paying back part of that debt. And taxpayers spent another $27-billion to buy GM stock. And although GM stock is up, our stake is only worth half of what we paid for it.

So Uncle Sam is still owed $14-billion by GM and has another $13-billion in stock losses. For every one dollar that GM just reported in profits, it cost Uncle Sam about four dollars.

It's good to keep everything in perspective.

From The Heritage Foundation, I'm Ernest Istook.