Government intervention paid off in case of GM

Published 10:22 am Friday, September 10, 2010

When first the outgoing Bush administration, then the new Obama administration, intervened to prevent the imminent collapse of General Motors and Chrysler, this page supported those efforts as necessary to preserve a couple of million jobs at a time when the economy was dive-bombing into recession.

Yet we had little faith that bailouts ultimately would change the trajectory of the two troubled companies.

Neither firm is out of the woods yet, and with consumer confidence so low and economic growth so anemic, it’s impossible to make long-range predictions about the fate of any company that has to persuade hundreds of thousands of people a year to part with tens of thousands of dollars each.

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But, in the case of GM in particular — Chrysler’s arranged marriage with Fiat will require more time to judge — it would appear that Washington’s gamble has paid off better than most people had reason to imagine.

After reporting two consecutive profitable quarters for the first time in years, GM executives announced last month that they had obtained a $5 billion revolving credit line and were hoping to raise as much as $20 billion more with a stock offering this fall. …

For too many years, GM was a poster child for American manufacturing’s decline. On this Labor Day, the company and its workers could be positioned to become an emblem of its rebirth.

The Cleveland Plain Dealer