WASHINGTON (AP) — Retiring General Motors CEO Dan Akerson says the government bailout of his company was a net gain for taxpayers — even though they lost $10.5 billion in the deal.
Akerson says if GM had gone under, taxpayers would have had to pick up pension plans with a $26 billion shortfall, and the government would have lost billions in tax revenue and would have had to make benefit payments such as unemployment compensation.
He cited a report released last week by the Center for Automotive Research, an Ann Arbor, Mich., research firm, that said if the government had not intervened, nearly 1.9 million jobs would have been lost in 2009 and 2010. Federal and state governments also would have lost $39.4 billion in tax revenue and payments made for unemployment benefits and food stamps, the study said.
GM won't repay the $10.5 billion, Akerson said, because the government agreed to make loans and take company stock in exchange for the $49.5 billion bailout in 2008 and 2009. The government sold the last of its General Motors Co. stock on Dec. 9.
"We paid back all that we owed and someone took an equity position in us," he said of the government.
Akerson, speaking to reporters at the National Press Club on Monday, also said if GM repaid $10.5 billion to the government, it would be unfair to stockholders who invested based on the current capital structure. "I can tell you there would be shareholder suits that would be difficult to defend," he said during a question-and-answer session after his speech.
Bailout critics say saving GM put the government in a position to choose winners and losers when it should have stayed out of private business.
Akerson wouldn't comment on whether the board will restore a dividend for the first time since July of 2008. But he hinted that one is coming, telling reporters that since GM has retired preferred stock that carried high dividend rates and payments, the company now has the "bandwidth" to maintain capital spending while rewarding shareholders.