The Corner

About that GM Bailout . . .

Democrats have been throwing around the word “lie” quite a bit lately. They have also been praising the (Bush-initiated) auto-industry bailout as a great victory for the Obama administration. The auto industry has not only survived, Rahm Emanuel just said, but is thriving.

Is that true?

GM’s share price is collapsing, having been roughly halved since January 2011, and many observers expect the company to find itself in freefall again.

The Democrats are talking up recent sales increases at Chrysler and GM as evidence of the wisdom of the bailout. It is true that sales have improved at U.S. makers — but those increases have far lagged the increases seen by overseas competitors such as Volkswagen and Kia. GM’s August sales are up about 10 percent over last year; Kia’s are up 21 percent. Volkswagen is up 37 percent. Hell, Porsche is up 40 percent.

And what about the increases at the U.S. firms? Ford’s rebound has been led, to nobody’s surprise, not by anything lean and green but by the venerable, gas-guzzling F-150 series. Chrysler is majority-owned by the Italian conglomerate Fiat these days, and Fiat sales are the growth leader at Chrysler, up 34 percent to a whopping . . . 4,150 units.

So while it is true that sales have increased at U.S. auto firms, they are seriously behind their overseas competitors. Forbes has predicted that GM is headed back to bankruptcy.

The Democrats are not exactly telling the truth, the whole truth, and nothing but when it comes to the auto bailout. 


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