One of the great mysteries to many inside the auto industry is why is GM’s stock price so low? Though the company had a weak third quarter, its stock price has been stuck well below its IPO price for much of the last year, despite a return to profitability. Though GM faces challenges, few inside the auto industry understand why its stock price remains so low. One theory: the government’s mere continued presence as a major stockholder creates uncertainty around the company. If this is the case, it creates something of a vicious cycle: the lower the stock price, the less likely the government is to sell its  shares, leaving it lingering with no exit strategy, in turn driving the stock lower. Though that’s not likely to be the whole story, one thing is certain: the government has been forced to increase its loss estimate for the GM bailout. The Detroit News reports that the Treasury’s losses on GM are now estimated at $23.6b, up from $14.4b. And with an election looming, it seems likely that the White House will sell within the next six months. But will the government’s desire to protect itself politically trade off with GM’s PR? After all, whatever the Treasury’s final loss is, that number will be pinned to GM as a symbol of what it owes the American people. On the other hand, with most analysts insisting that GM stock is undervalued, another year of government ownership could convince investors to bid up the price, greatly reducing GM’s public debt. Too bad electoral politics will probably prevent that from happening….

Whether or not the White House pressured or even contacted Ford Motor Company after the company released their recent ad appealing to anti-bailout sentiments we’ll probably never know. We’ll also probably never know if this was all just a symphony of leaks and disclaimers orchestrated by Ford. What we do know, thanks to a Rasmussen opinion poll [Sub. required, some data here], is that Ford had good reason to stoke American consumers’ resentment against it’s domestic competitors because they were bailed out by the government. The poll shows that the bailout is clearly a factor, sometimes an overriding one, in automobile purchase decisions. Not only did nearly one in five recent Ford buyers say that they or family members specifically chose Ford products because they didn’t take a government bailout, about half of all consumers surveyed said that they were more likely to buy Fords than GM or Chrysler products specifically because Ford didn’t get bailed out. [Note: Yes, Ford took Dept. of Energy loans and other government funds, but this survey was looking at people's opinions, not facts.]

To be clear, this was a political opinion poll of likely voters, not market research, and the questions were worded to provoke a response but the results were pretty consistent.

Nineteen percent of those questioned responded “yes” to the question: Have you or anyone in your family bought a car from Ford because it didn’t take a government bailout? Of people age 18 to 29, that figure rises to 33%.

When asked: Has the bailout and government takeover of GM caused you or anyone you know to avoid buying a GM car?, 25% of respondents said yes.

To “Does the fact that GM took bailout money make you more or less likely to buy a GM car?”, 50% said less likely. I’d really be interested in interviewing some of the 4% that said “more likely”. How does the fact that a company had to be bailed out make its products more desirable? Perhaps that’s a sympathy vote.

To the question: “Ford didn’t take bailout funding. Does this make you more or less likely to buy from Ford?”, 51% said more likely and 12% said less likely. Perhaps those 12% don’t think Ford needs their help.

Either way, the survey results quantify the subjective experience of Chris McDaniel, the F-150 owner who was featured expressing anti-bailout sentiments in the commercial at the center of this brouhaha. Politics aside, this Rasmussen poll shows that Ford would have missed a marketing opportunity had it not exploited those sentiments.

In a report released earlier this week [PDF], the EPA Inspector General criticized the Technical Support Document for the portion of greenhouse gas regulation dealing with “Endangerment,” or the possible effects of greenhouse gasses. Inspector General Arthur A. Elkins Jr. summed up his office’s findings [PDF], writing

The OIG evaluated EPA’s compliance with established policy and procedures in the development of the endangerment finding, including processes for ensuring information quality. We concluded that the technical support document that accompanied EPA’s endangerment finding is a highly influential scientific assessment and thus required a more rigorous EPA peer review than occurred. EPA did not certify whether it complied with OMB’s or its own peer review policies in either the proposed or final endangerment findings as required. While it may be debatable what impact, if any, this had on EPA’s finding, it is clear that EPA did not follow all required steps for a highly influential scientific assessment. We also noted that documentation of events and analyses could be improved.

Oy vey. Greenhouse gas science controversy. So, what’s the problem really about?

The question basically comes down to the way the EPA assesses outside data, and whether data assessments were worthy of the Technical Support Document (TSD)’s importance. Or, to put it into DC style “summary.”

In our opinion, the TSD was a highly influential scientific assessment because EPA weighed the strength of the available science by its choices of information, data, studies, and conclusions included in and excluded from the TSD. EPA officials told us they did not consider the TSD a highly influential scientific assessment. EPA noted that the TSD consisted only of science that was previously peer reviewed, and that these reviews were deemed adequate under the Agency’s policy. EPA had the TSD reviewed by a panel of 12 federal climate change scientists. This review did not meet all OMB requirements for peer review of a highly influential scientific assessment primarily because the review results and EPA’s response were not publicly reported, and because 1 of the 12 reviewers was an EPA employee.

EPA’s guidance for assessing data generated by other organizations does not include procedures for conducting such assessments or require EPA to document its assessment. EPA provided statements in its final findings notice and supporting TSD that generally addressed the Agency’s assessment factors for evaluating scientific and technical information, and explained its rationale for accepting other organizations’ data. However, no supporting documentation was available to show what analyses the Agency conducted prior to disseminating the information.

But, there’s one more thing that the Inspector General wants to make perfectly clear:

We made no determination regarding the impact that EPA’s information quality control systems may have had on the scientific information used to support the finding. We did not test the validity of the scientific or technical information used to support the endangerment finding, nor did we evaluate the merit of EPA’s conclusions or analyses.

Accordingly the major Republican attack on the back of this report hasn’t been on the basis of GHG regulation science, but at procedural issues, most especially concerning transparency. With more than a dash of the requisite economic populism. In a statement today, House Oversight Committee Chair Darrell Issa argued

Improved fuel efficiency is a worthy goal. Unfortunately, the path pursued by the Obama Administration has the potential to increase vehicle costs for consumers, reduce passenger safety and ultimately impact American jobs. We cannot afford job-killing regulations forced through the process without regard to these consequences at a time of economic vulnerability. Further, there are real questions about the transparency of new standards negotiated in secrecy without adequate public input or concern for jobs and consumer choices.

With the news that they have delayed the release of these standards until November, it would seem the Administration is having difficulty fitting a pre-determined conclusion driven by outside special interests and the California Air Resources Board into the statutory structure created by Congress.

The general conclusion of that last sentence may seem like nothing more than a twist of the partisan knife, but there’s truth there. Earlier in the year the EPA had to coax CARB into waiting for “studies examining the technological and financial ramifications” before announcing new CAFE standards, indicating that the recent delay of the new rule until mid-November could be related to those studies. And this EPA Inspector General report just adds fuel to that fire. On the other hand, the DetN reports that the Obama Administration has already addressed Issa’s transparency concerns, noting

White House counsel Kathryn Ruemmler told Issa the government will conduct a traditional rule-writing process.

“The agencies have made clear that they intend to conduct a public rulemaking with additional opportunity for public comment,” she wrote in the Sept. 8 letter obtained by The Detroit News that has not been made public.

But Issa’s not just going after the EPA. Bloomberg reports he’s taking on NHTSA (the other agency tasked with writing CAFE) as well. Issa fired off a letter to Transportation Secretary Ray LaHood, in which he thundered

“I am concerned about the negative impact these standards could have on the safety of automobiles, the possibility that the National Highway Traffic Safety Administration acted outside the scope of congressionally delegated authority and the lack of transparency in the process leading up to the agreement”

Transparency? Scope of powers? Not my department. Safety? Well, there again Issa has done his homework. As an EPA supplemental Notice Of Intent notes

for the 2017-2025 NPRM, NHTSA and EPA will conduct an analysis of the effects of the proposed standards on vehicle safety, including societal effects. CARB is undertaking and coordinating with EPA and NHTSA on a study of how a future vehicle design that incorporates high levels of mass reduction complies with vehicle safety standards and voluntary safety guidelines. NHTSA is also initiating a new study of the feasible amount of mass reduction based on a mid-size passenger car platform, and the effects of several advanced mass reduction design concepts on fleet safety. The NHTSA studies are being coordinated with EPA, DOE, and CARB.The agencies expect that several, but not all of these studies will be completed in time to inform the NPRM. Others are expected to be completed in time to inform the final rule [Emphasis added]

In other words, Issa is concluding that a delay in the final rule could be related to this study… which could affect safety. But lets face it, cars have never been safer… and unless the EPA has a mess on its hands with this report, this could easily end up being seen as what the kids call “concern trolling.” And some will likely conclude that’s the case based on the sheer scope of Issa’s assault on GHG regulation. Issa also sent a letter to EPA Administrator Lisa Jackson today, in which, Bloomberg tells us

Issa also questioned the EPA’s role in writing a previous fuel-economy rule that takes effect next year, saying it negotiated with automakers around the same time General Motors Corp. and Chrysler LLC were getting U.S. bailout money. The timing “heightens the concern that the administration used the promise of taxpayer dollars to obtain GM and Chrysler’s support for the new fuel economy standards

This is probably the bridge too far. Issa has been harping on that theory for well over a year now, and it’s got him nowhere. And no surprise: the Obama Administration has always given the auto bailout a thin green veneer, so a successful investigation by Issa would only prove that the greenwashing had something behind it. Furthermore, the CAFE rules he’s talking about are riddled with loopholes,  and the subsequent version is even more riddled, and with larger loopholes. And that jives with what I’ve heard from industry lobbyists, who generally downplayed CARB’s power to pull the White House to the left, let alone the White House’s ability to set impossible standards. The line I got was that overhauling GM and Chrysler gave the government a “look under the hood,” which helped it see the OEM perspective on regulation.

Be that as it may, Issa is launching investigations into how the EPA and NHTSA handled auto GHG emissions regulation, adding to his ongoing investigation of the Obama Administration’s role in CAFE [PDF letter of investigation here]. He says his staff will “further review” the “serious questions” raised by the EPA Inspector General’s report. Say what you want about the guy’s politics, when he moves on something, he moves on something. And he’s definitely earning his title as Obama’s “Annoyer-in-Chief.”

The Detroit News reports that the only Republican in Washington with subpoena power, Rep Darrel Issa has written a letter asking Ford CEO Alan Mulally for “a full and complete explanation of Ford’s decision” to stop running an advertisement that was critical of the TARP-funded auto bailout.

In a letter, Issa asks Ford if any White House, Treasury or other federal employee discussed the ad with any Ford employee “at any time via any manner of communication” and asks the automaker to turn over any documents connected to any discussion by Oct. 12.

Spokeswoman Meghan Keck said Ford will cooperate, but reiterated that the White House didn’t pressure the Dearborn automaker.

Ford took the ad off of Youtube after “individuals inside the White House questioned whether the copy was publicly denigrating the controversial bailout policy CEO Alan Mulally repeatedly supported in the dark days of late 2008,” according to Daniel Howes of the Detroit News. The same day Ford restored the video, and denied that White House pressure led to the takedown. Color us curious as to how Mulally is going to explain this little episode…

UPDATE: The Washington Post’s Plum Line reports

The White House has not yet commented on the situation, but hit the jump for more details on Ford’s curious response…

UPDATE: Ford’s Craig Daitch has responded in the comments at Autoblog, saying

Regarding the ad, as you know it contains unscripted comments from a Ford owner and is part of a series featuring customers telling their story and views about Ford and our products. The ad has stopped running as part of its previously planned rotation. We simply don’t make advertising decisions made on pressure – political or otherwise. The ad cycled out of rotation, as we do with all ads in this series, and will continue showcasing our Drive One testimonials, just like those that preceeded it.

Regarding the thread comments on bail out support, we did back emergency government support for our competitors in 2008 and 2009 and continue to support the decisions we made. Had that support not been provided, a number of suppliers could have been negatively affected, which would have had an equally negative impact on our business.

Ford Motor Company stands by its products, its customers, and our marketing. We thank those who stand with us.

Craig Daitch
Digital Communications
Ford Motor Company

Still no word on why the ad disappeared from Youtube today, only to reappear hours later as if nothing had happened. Perhaps, like the phonecall from the White House, these are all simply unconnected coincidences…

[UPDATE: Ford has restored the video to Youtube. More details here.]

Detroit News columnist Daniel Howes reports in a column that Ford has pulled its controversial “bailout ad” after the White House asked “questions” about it. And apparently the take-down decision makes this a threatened piece of footage: in addition to yanking the spot from the airwaves, the version of the video we posted two weeks ago has been taken down from YOutube as well [a home recording of it can still be found here]. So what happened that Ford would throw its most popular ad in ages down the memory hole? Howes is cryptic…

Ford pulled the ad after individuals inside the White House questioned whether the copy was publicly denigrating the controversial bailout policy CEO Alan Mulally repeatedly supported in the dark days of late 2008, in early ’09 and again when the ad flap arose…

With President Barack Obama tuning his re-election campaign amid dismal economic conditions and simmering antipathy toward his stimulus spending and associated bailouts, the Ford ad carried the makings of a political liability when Team Obama can least afford yet another one. Can’t have that.

The ad, pulled in response to White House questions (and, presumably, carping from rival GM), threatened to rekindle the negative (if accurate) association just when the president wants credit for their positive results (GM and Chrysler are moving forward, making money and selling vehicles) and to distance himself from any public downside of his decision.

In other words, where presidential politics and automotive marketing collide — clean, green, politically correct vehicles not included — the president wins and the automaker loses because the benefit of the battle isn’t worth the cost of waging it.

Who were these “individuals inside the White House?” What questions did they have for Ford? And why on earth would Ford not stand up for itself in this situation? That GM was “carping” about the ad only makes this worse: the White House wasn’t just trying to smooth over the campaign trail, it was protecting its investment (remember, the government still owns a significant stake in The General) by “asking” a competitor to kill a successful ad. So, just how aggressively did the White House “ask” about this ad? Again, Howes is cryptic:

“This thing is highly charged,” says an industry source familiar with the situation. Ford “never meant it to be an attack on the policy. There was not any pressure to take down the ad.”

Maybe not technically. But the nexus of politics and the auto business in today’s Washington is bigger, broader and more complex than it arguably has been in who knows how long.

Gosh, if I had a reporter in the White House press corps, I’d be sure to have them ask about this. After all, this situation highlights perfectly why bailouts are so un-American. I don’t care who you are or how you felt about the bailout in the first place: at the point that the President is pressuring competitors to government-owned companies to yank truth-telling ads, you’ve got to wonder what happened to this country.

At the height of “bailout fever,” after TARP had been instituted but before the automakers had been completely bailed out, one argument that we heard a lot of from Detroit’s defenders was “how can you begrudge the manufacturing base a few billion when speculators at the banks are receiving far more support?” At the time, the argument seemed to me like a convenient way to shift attention away from Detroit’s failures and undercut the argument that consumers, not a credit crunch, were responsible for killing off GM and Chrysler… but at least then it still had some validity. Fast forward to today, and history has stripped it of all relevance, as it turns out the banks will likely be picking up the automakers’ bailout tab.

The Detroit News‘s David Shepardson reports that the Obama Administration has resurrected its “Financial Crisis Responsibility Fee” as part of its new deficit-reduction package, which, in the words of Treasury Secretary Tim Geithner,

 is designed to make sure that if there are any losses from the emergency actions we took to put out the financial fires of ’08 and ’09, that we recover those losses in the form of a fee on the institutions that benefited most directly from those programs… If Congress did not legislate a fee like this, then if we ultimately realize losses on the emergency programs, then those would add to the deficit. So by proposing this fee, we try to make sure that doesn’t happen.

Sounds good, right? Well, here’s the problem with expecting payback for bailouts: the firms that “benefit most directly” from them are least likely to be able to pay them back. As a result, the big bad banks that have not only paid back most of their loans but also lent Chrysler the cash to pay back its TARP loans are the ones in line for a soaking. The automakers, which received less up front but are paying back a lower percentage of their loans, are in line for a free pass. Think of this as a handy reminder of all that “moral hazard” stuff people were talking about a few years ago.

The Freep explains the details

The fee would be restricted to firms with more than $50 billion in assets, according the Obama administration plan – and is estimated to raise $30 billion over 10 years.

By “firms with more than $50b in assets,” the Freep means the biggest banks. With the exception of AIG, Ally Financial (formerly GMAC, GM’s once-captive finance arm), and the Fannie/Freddie twins, this refers to banks that were the quickest to recover post-bailout, and have repaid most or all of their TARP loans. And the last time the Obama Administration proposed this Fee, the heads of those banks were not amused. In early 2010, the WSJ reported that

[J.P. Morgan Chase CEO James Dimon] said it felt like the banks which have already paid back taxpayers, were being asked to subsidize the bailout of General Motors and Chrysler.

At the time, I wrote

The real irony is that the bank bailout allegedly took place because nobody understood the real nature of the crisis, shrouded as it was in the opacity of financial industry jargon. Now that the moment of crisis is over, the banks are back to making money, while the automakers are still dreaming of that first post-bankruptcy profit. Which one turned out to be the more difficult, complex industry?

But now that Detroit is making big profits, what’s the excuse? By my count, Chrysler still owes the American people around $5.3b that it shows no interest in ever repaying. At current stock prices, the taxpayers are likely to lose around $15b on the GM bailout. And GM is already making so much money it has to shell out nearly a quarter-billion dollars to the union that helped drag it from industry-dominator to federal charity case. But rather than putting GM and Chrysler on a payment plan until they square up with the American people, we’re going to shake down the banks for their share? Is this making sense to anyone?

“Chris” from Ford’s “Press Conference” commercial, which has received extensive media play recently from TTAC to Fox News, has uploaded a Youtube video in order to give his own, non-Ford-approved perspective on the controversy. He claims to be “just a guy who loves his F-150,” and insists that the commercial wasn’t staged or intended to be about the bailout. And based on his spontaneous thoughts in this video, the ideological component of his views do seem genuine. But don’t take my word for it, watch for yourself.

Wow. I don’t know if Ford is broadcasting this particular commercial [Ed: They are, although possibly not in the Detroit area], but it’s part of a series of ads that Fred Goss directed for Company Productions. The ads were set up by recruiting recent Ford buyers to come in and answer some market research questions. Those Ford owners did not know that they would be walking into a press conference with, apparently, real journalists [Ed: Huh?] asking them about their purchase. Company Productions released a video on the making of the ads. In this particular case Ford got lucky when a F-150 owner named Chris sat behind the microphone. Answering a reporter’s question, “Was buying American important to you?” Chris came up with something that advertising copy writers dream of writing.

He took that softball question (Chris’ F-150 was parked next to the dias at the press conference. About 94% of full size pickup buyers buy American brands.) and hit it out of the park:

I wasn’t going to buy another car that was bailed out by our government. I was going to buy it from a manufacturer that stands on their own, win lose or draw. That’s what America’s about, it’s taking the chance to succeed and understanding that when you fail you’ve got to pick yourself up and go back to work. Ford is that company for me.

It seems to me that this is about as blunt as Ford has been on the topic of their domestic competitors’ bailouts and that it is the first time Ford has explicitly used GM and Chrysler’s bailouts as a marketing tactic. The ad hits so many notes and because it’s a real person, not an actor, it resonates well. I also think it’s interesting that Ford and their ad agency included Chris’ reference to Ford’s “fail” in the past. This is the first time that I can recall that any American car company has at least implicitly acknowledged in some kind of advertisement that their previous products were not great.

Reuters reports:

Republican leaders in the House of Representatives want to halve the balance of a U.S. government loan fund established to help the auto industry make more fuel efficient cars and trucks.

If plans to shift some $1.5 billion from the Energy Department advanced technology fund to disaster assistance are carried out, serious questions would be raised about Chrysler’s ability to fully capitalize on its bid for new financing.

That the DOE loan program is under attack comes as no surprise: it’s been savaged by both the GAO (twice) and the Center for Public Integrity for a lack of clear goals, weak oversight, misappropriation, and political patronage (more on the patronage bit here). And with the Solyndra DOE loan scandal blossoming, it’s no surprise to see ATVM going under the axe (although Rep Steny Hoyer is leading the Democrat pushback). What’s worrying about this development, however, is that Fiat-Chrysler CEO Sergio Marchionne has said that the DOE loan was “a crucial part” of negotiations over its recent Wall Street bailout loan refinancing. When GM quit the program earlier this year, Marchionne also said that

I have neither the arrogance nor the cash to show any disdain toward the DOE process.

Chrysler also cites its ability to secure the DOE loans as a major risk factor in its latest 10-Q SEC filing. And with only about $10.2b in cash and equivalents on hand at the end of June, there’s a chance that this attack on the ATVM loan program could deal a body blow to Chrysler’s finances. Here’s hoping Sergio has kept the runt of the bailed-out automaker litter from dependence on this apparently corrupt, and politically vulnerable loan program.

The Detroit News reports that former Vice President Dick Cheney claims to have opposed the decision to bail out GM and Chrysler, writing in his forthcoming memoir:

“The president decided that he did not want to pull the plug on General Motors as we were headed out the door… Although I understood the reasoning, I would have preferred that the government not get involved and was disappointed — but not surprised — when the Obama administration significantly increased the government intervention in the automobile industry shortly after taking office.”

Cheney notes he had voted against the 1979 $1.5 billion loan guarantee for Chrysler Corp. in the House. “I had continued throughout my career to be philosophically opposed to bailing out specific companies or industries,” he wrote.

But lest you think the 1979 vote makes Cheney a model of consistency, consider his defense of the $700b TARP expenditure:

Providing sufficient support to avoid the collapse of our banking system was something only the federal government could do. But, all things considered, companies in the private sector should be judged in the marketplace. Having the government intervene was not, in my opinion, a good idea.

I’ve been thinking about the bailout era a lot recently, as GM’s stock slumps towards an inevitable and significant government loss in the near future. I’m sure that when the government finally writes off the $14b+ loss, a political knifefight will ensue with all sides seeking to justify their positions on the matter. But where will that get us? After all, both political parties bear some responsibility for the decision, and it’s impossible to say what would have happened without the bailout. And if politicians and partisans make the final chapter of the auto bailout about politics, they’ll have missed the entire point… and provide a smokescreen for the real culprits.

GM and Chrysler have to live with their outstanding moral (if not legal) debt to the American people, and all eyes should be on those companies rather than the posturing politicians. How these private firms relate to the taxpayers who bailed them out will be the defining issue of their post-bailout existence, and one that should be taken extremely seriously in Auburn Hills and the Renaissance Center. I’m not sure I can say exactly what they should do about it, but the first step is to not run from reality (as has already happened too often in the past). The final tallying of the bailout bill will be a defining moment for these two companies… let’s hope they realize it, and act accordingly.

“New GM did not assume liability for old GM’s design choices, conduct or alleged breaches of liability under the warranty, and its terms expressly preclude money damages,” the response says.

The suit “is trying to saddle new GM with the alleged liability and conduct of old GM.”

The suit alleges that GM issued a service bulletin for police-fleet 2007-8 Impalas, which were eating through rear tires due to faulty spindle rods. In that bulletin, GM instructed its dealers to replace the rods as well as rear tires, where appropriate. But GM argues that police versions are different than civilian models, and has not issued a bulletin for regular-duty Impalas… and now, on top of it all, its arguing that the “new” post-bailout GM “only agreed to warranty obligations of cars assembled before 2009.” As many as 400,000 Impalas could be affected by the spindle rod issue (which GM says is a manufacturing problem, not a design defect), which could cause rear tires to wear out in as few as 6,000 miles. And despite the clear evidence that GM knew about the problem and fixed police-fleet versions, the bailout liability dump defense could just work: at least one lawsuit (regarding OnStar failure) has already been dismissed on the grounds that New GM is not liable for Old GM’s mistakes. The bailout, it seems, is the shafting that just keeps on shafting…

It’s getting a little predictable. Go to a big car event like the North American International Auto Show or the Society of Automotive Engineers (SAE) World Congress and you’re going to see politicians and government officials. I suppose that’s to be expected, but to be honest, I’m a little ticked off at how our public servants get a large megaphone at those events without bearing any of the costs that you, I, or a car company would have to pay for for the same treatment.

For the past three years particularly because of the meltdown of the domestic automakers, the bailout and the US Treasury’s subsequent stakes in GM (still held) and Chrysler (divested so that Fiat could own more), but really since the beginning of time, politicians and auto shows went together. I remember, after a press conference where Wayne County (MI) executive Robert Ficano exchanged gifts with the chairman of the People’s Army owned automaker Changfeng, asking Mr. Ficano just how many Changfeng employees voted in Wayne County. During the ’08 presidential election, most of the primary candidates on the Republican side visited the show’s press preview.

That was before ‘carmaggedon’ in Detroit. Now the politicians are as thick as flies, drawn like moths to the lights of the tv crews and the chance to have a free soapbox in front of over 5,000 reporters. You should have seen them rush to preen next to Sergio Marchionne. Like I said, it ticks me off. Marchionee and Fiat had to spend big bucks to be on the floor at Cobo Hall. Rental for a large exhibit at the NAIAS must surely run into 7 figures, plus construction costs. If our esteemed ed Ed wanted to have a press conference at the Detroit show, it would have cost our corporate overlords beaucoup bux. However, when Nancy Pelosi and Steny Hoyer want to hold a press conference at that same show, the organizers, most likely out of a sense of self-preservation, make that lecturn, microphone and CCTV available gratis.

That’s not bad enough. This past January, a congressional delegation of more than two dozen members of congress and over a dozen support personnel, led by then Speaker Pelosi and including, it should be pointed out, members of the Michigan delegation like representatives Gary Peters, Sander Levin, Fred Upton, Pete Hoekstra, and John Dingell as well as senators Levin, Stabenow visited Detroit for the NAIAS. The government accountability group Judicial Watch filed a Freedom Of Information Act request for the cost of that delegation. It turns out that you and I paid over $34,000 for travel, food, ground transportation in Michigan, and incidentals so that Mrs. Pelosi and her colleagues could get that free microphone [Ed: for that amount, we could have covered that show]. To be sure, some of that money stayed in Detroit. Metro Cars, the livery service, and Fishbone’s restaurant, along with the Old Shillelagh, a bar, did okay. They spent $128.77 on hospitality room supplies like Doritos, Cheetos and Coke. Fourteen hotel rooms were booked at $275/night.

Pelosi had asked for military jets, but that was turned down and the delegation flew commercial which cost $24K, except for the congressional physician and some military support staff. At the show, one member of the delegation, I think it was Steve LaTourette from Ohio, told me that he drove himself, in his own car, which as car enthusiasts I suppose we should salute. A request for reimbursement for $228 for use of a personal car was submitted.

At the time, Pelosi’s office explained the need for the trip in the following terms:

Our bipartisan delegation will visit Detroit to see first-hand the innovative technologies the industry is investing in to create the jobs of the future and to ensure our national competitiveness,” Speaker Nancy Pelosi said. “We go to Detroit with our commitment to continue to preserve our manufacturing base, which is essential to our economic and national security

In the wake of Judicial Watch’s investigation, Drew Hammill, a Pelosi spokesman, defended the trip.

“Congress made an historic commitment to the auto industry to drive innovation and modernization, and to save hundreds of thousands of jobs.It was critical that taxpayer dollars received proper oversight and the bipartisan visit was critical to that process.”

You can read the complete FOIA response here.

With CAFE negotiations heating up, safety regulation coming down the pipe and the UAW pushing for another round of “retooling” loans, GM is upping its profile in the nation’s capitol with a new ad campaign aimed at policymakers. The DetN reports

A Washington-based spokesman for the automaker, Greg Martin, said the effort is to make sure policy makers “are aware of GM’s contribution to our nation’s economic and competitive strength.”

GM has a broader story than just profits and sales, he said.

“GM has started an ad campaign in select Washington publications because there’s more to GM’s resurgence than just increased sales and profitability,” Martin said. “GM is also an auto company investing heavily in America’s future, creating new jobs and inventing solutions and technologies that will make a real difference in energy and safety.”

But the waves of coming auto-related regulations may not actually have motivated the ad so much as the fact that the government is likely to sell off its remaining 26% share in GM by the end of the year (if not by the end of the Summer), and they’re facing an $11b loss at current stock prices. By emphasizing that the auto bailout created a positive corporate citizen rather than just a newly-profitable company, GM likely hopes to convince the government that the political downsides of taking a big loss on The General was ultimately worth it. And that’s an important PR step in the short term as well, as CAFE negotiations are giving rise to bailout-tinged rhetorical attacks on the automaker. For example, Ralph Nader tells the Freep

We give GM billions of dollars, and what do taxpayers get in return? Opposition to a policy that will clearly save them money and give them better cars,

Video from Chrysler’s last “new day,” shortly after being bought by Cerberus in 2007

According to Chrysler Group’s latest 8K, filed with the SEC today

On July 21, 2011, Fiat North America LLC, a wholly-owned subsidiary of Fiat S.p.A. (collectively, “Fiat”), acquired beneficial ownership of the membership interests in Chrysler Group LLC (the “Company”) held by the U.S. Department of the Treasury (“U.S. Treasury”) and the Canadian government’s special purpose entity, the Canada Development Investment Corporation (“Canadian government”). Fiat acquired 98,461 Class A membership interests in the Company from the U.S. Treasury, representing approximately 6 percent of the fully-diluted ownership interest in the Company for cash consideration of $500 million. Pursuant to a separate agreement, Fiat paid $125 million to acquire 24,615 Class A membership interests in the Company from the Canadian government, representing approximately 1.5% of the fully-diluted ownership interest.

Pursuant to these self-funded transactions, Fiat became the owner of a majority of the membership interests in the Company. Fiat now holds 55.3% of the Company’s outstanding equity, or 53.5% on a fully-diluted basis, taking into account the occurrence of the third and final Class B Event described in the LLC Operating Agreement which is expected to occur by the end of 2011. The remaining equity in the Company is owned by the UAW Retiree Medical Benefits Trust, a voluntary employees’ beneficiary association trust (the “VEBA”).

That’s right, the United States taxpayers are now fully-divested from their “investment” in Chrysler, which is now a majority-owned division of Fiat. Once the EPA certifies that Dodge’s new Fiat-based compact car gets 40 MPG unadjusted combined (about 30 MPG in “window sticker” EPA mileage), Fiat will get another 5% of Chrysler’s equity, bringing its stake in the company to 58.3%. In a statement, the Treasury estimated the final cost of the bailout to be $1.3b (as it does not expect any meaningful recovery from Old Chrysler’s liquidation), although that does not include several taxpayer outlays, without which the rescue of Chrysler would not have been possible. By our math, the total bill for Chrysler’s rescue is closer to $4.7b.

So, after all the drama was it worth it? For now I’ll leave that one to the comment section… and history.

When Fiat and the US government collaborated to bail out and restructure Chrysler, many hailed the news as nothing less than the rescue of the American auto industry. Though Fiat CEO Sergio Marchionne became CEO of the Auburn Hills-based automaker, he maintained much of its management corps on the strength of brief interviews, only relieving a few key members of the old guard. But the debate over whether the rapidly-aligning Fiat-Chrysler is more Fiat or Chrysler is going to be resolved “pretty quickly” according to Marchionne, as Bloomberg reports that a unified management structure is in the works.

Marchionne is working on management changes as he steps up the integration of the two companies. He plans to merge the carmakers to reduce costs and achieve a target of more than 100 billion euros ($140 billion) in combined revenue by 2014. The executive said in May that the timing of a merger hasn’t been decided yet, adding that a combination isn’t likely this year.

But just as there was furor in Italy when Marchionne suggested that the unified Fiat-Chrysler could be headquartered in Detroit, the unified management structure could be yet another source of controversy. It will, after all, be the most direct signal yet as to whether Fiat-Chrysler is an Italian firm with global operations, an Italian-American alliance or a truly global firm. For one thing, unified management should force Marchionne to commit to a single headquarters for the group, reviving a controversy he temporarily cooled by fatuously suggesting there be four Fiat-Chrysler “headquarters,” in Turin, Detroit, Brasil and “Asia.” Having masterfully finessed the PR messaging transition from “rescue of an American automaker” to “wholly owned subsidiary” thus far, a unified management could bring up a lot of unresolved issues. In short, it’s a branding challenge that makes the Chrysler-Lancia transformation look like child’s play…

I love General Motors. I’m bringing this age-discrimination suit action because it’s the right thing to do — for me, my family, as well as my GM peers who have been severely affected by GM’s conduct.

A critical aspect of GM’s turnaround was breaking a culture that has been held up for decades as an example of insularity, stagnation and inefficiency [for more read Ron Kleinbaum's classic four-part editorial on the subject here], a task that various recent CEOs have gone about differently. Fritz Henderson had a “change agent” vanguard approach, while Ed Whitacre took more of a “set tough goals and fire regularly” tack towards GM’s culture wars. But regardless of differences in tactics, everyone’s agreed that GM’s culture needed to be seriously retooled if the company’s huge advantages after a government-backed bankruptcy-bailout weren’t going to be pissed away, and as a result a lot of GM’s “lifers” found themselves on the outside looking in. And rather than slinking away, one of those jilted lifers is suing GM for age discrimination.

The Freep reports

[Daniel Plouffe's] lawsuit says that when GM emerged from bankruptcy in 2009, it embarked on a campaign to replace older executives with those under 50 by encouraging older executives to retire.

Many of those who didn’t retire were demoted out of the executive ranks with no chance of being considered for future promotions, regardless of their qualifications.

Plouffe, who has worked for GM since 1971, said he was demoted to a level 9 position, resulting in a 20%-25% pay cut, even though he assumed the responsibilities of three other executives who left.

He said a succession of GM officials told him that he was being demoted because the company wants to promote younger people — those under 50 — even though his last performance evaluation said he far exceeds expectations.

Plouffe is seeking class action certification, but legal experts say he’ll “face a daunting task.” After all, to defend itself GM simply needs to prove that there were business advantages to thinning the executive ranks. Still, perhaps this will make current CEO Dan Akerson think twice about saying things like

It’s just like the Communist party in China in the 1960s: There has to be a cultural revolution here.

Well, I just wrote about 1,500 words on this topic which our post editor just obligingly disappeared into the digital void, wiping out over an hour of work. This was, perhaps, an appropriate turn of events, however, as the majority of those 1,500 words were used to describe the frustrating political stalemate that played out over the last two days of hearings on “The Lasting Implications of the GM Bailout.” The dynamics of the government’s exit from GM seem to have changed little since I wrote “Government Motors: The Exit Strategy,” and the hearings focused on the political implications of the bailout. Having determined that the bailout will help the President’s reelection in midwestern states, the White House (as represented by auto task force member Ron Bloom) sought to retrench its “things would have been worse” position, and Republicans attacked on all fronts for the very same reason. The government’s favorable treatment of UAW-represented workers, especially in comparison to Delphi’s non-UAW retirees was a major point of attack, and the committee caused Bloom deny (under oath) having ever said that “I did this all for the unions,” despite the fact that both the Detroit News’s David Shepardson and Bloom’s task force colleague  Steve Rattner have quoted him directly. Emails obtained by The Daily Caller were also presented as (more) evidence that the government intervened in a number of day-to-day decisions at GM, including the Delphi retiree issue.

Ultimately, the Republicans landed some serious body blows on the policy, although nothing radically new was presented. Bloom, meanwhile, defended the bailout by arguing that the alternative would have been much worse. In short, the political stalemate over the auto bailout continues… much to GM’s dismay. And since insiders are indicating that any collusion to boost GM’s stock price in order to improve the taxpayers’ return would be worse than a larger loss, a $10b+ loss is as good as guaranteed. Which means the Republican attacks will continue and the political trench warfare over the issue will only continue.

[Watch the bailout hearings here]

How many former Saturn buyers do you figure have come back to GM for their next car? What about consumers who last purchased a Pontiac? How about HUMMER? Since we’re not bound to a strict inverted pyramid around here, why don’t you think of an answer (in terms of percentage of customers retained) for each brand and then hit the jump to see how close you were.

OK, pencils down. According to the Detroit News:

In 2010, GM retained 36 percent of Pontiac owners who bought new vehicles, as well as 26 percent of Saturn and 39 percent from Hummer, according to California-based research firm J.D. Power & Associates.

That’s far below the 55 percent retention rate for GM’s Chevrolet brand, as well as under the industry average of 48 percent.

Considering that GM has been tackling this retention challenge for two years now, using the term “free agents”  to describe buyers of its defunct brands and dealers and throwing all manner of free oil changes, maintenance packages, and deals on new cars at them, this is not a great result. The way former US sales boss Susan Docherty described the “free agent” retention effort a short year-and-a-half ago, focus groups, direct mail and email marketing, as well as “establishing credibility with a service relationship.” Speaking of which, dealers have been making their own efforts to reach out to GM’s “free agents” as well, so The General’s corporate retentino efforts can’t even take all the credit for this underwhelming result.

But why did GM’s “free agents” jump ship in such large numbers? One theory, from JD Power analyst Steve Witten, is that it comes down to product and branding, not dealers and outreach:

The truth of the matter is they didn’t have many options for people to stay in the GM family… When they decided to pull the plug on [Saturn], there wasn’t really another GM brand similar enough from an image standpoint

But c’mon… really? The differences between a Saturn Aura, a Pontiac G6 and a Chevy Malibu were that big? Methinks Mr Witten is looking at the past with rose-colored glasses. A more plausible theory comes from a dealer who used to sell Saturns, and has switched to selling Kias since the brand cull, who notes:

I would say the majority of people who had Saturns were very unhappy they got left holding the bag on this one. A lot of them took a hit on the value of their cars and that turned them off to Saturn and GM

Remember, a big hit on resale can be as much of a financial burden as a grenaded engine, or faulty transmission. And though GM is arguably making progress in erasing memories of its bad old days of product ignominy, things like the resale hit on culled brand vehicles could create a whole new generation of mistrust between GM and its once-loyal customers. But hey, at least there were only 6.8m of these “free agents” as of early 2010…

The Department of Energy’s Advanced Technology Vehicle Manufacturing (ATVM) loan program has come under fire from the Government Accountability Office before, and was the subject of a patronage investigation by the Center for Public Integrity and ABC News. And the bad news keeps piling up, with yet another nasty GAO report [PDF] taking the program to task for running up higher-than-expected lending costs due to “industry risks” and for failing to provide required technical oversight.

On the funding front,

The loans made to date represent about a third of the $25 billion authorized by law, but the program has used 44 percent of the $7.5 billion allocated to pay credit subsidy costs, which is more than was initially anticipated… At this rate, the $4.2 billion remaining to be used to pay credit subsidy costs will not be sufficient to enable DOE to loan the full $25 billion in loan authority. These higher credit subsidy costs were, in part, a reflection of the risky financial situation of the automotive industry at the time the loans were made… [Emphasis added]

As of May 9, 2011, DOE reported that 16 projects seeking a total of $9.3 billion in loans—representing $3.5 billion in credit subsidy costs—were under consideration.

Meanwhile, three out of four borrowing firms have already misused funds, according to the report… although the DOE’s auditors do seem to have kept a lid on the situation.

Staff also rely on outside auditors to confirm whether funds have been used for allowable expenses. As of February 2011, the auditors had reported instances in which three of the four borrowers did not spend funds as required. According to ATVM officials, these instances were minor—the amounts were small relative to the total value of the loans—and the inappropriate use of funds and the borrowers’ practices have been corrected.

So the misspending was small… compared to the billions already loaned. Which means what? Millions of dollars? Tens of millions? Did someone leave a couple of twenties under the cushions of the breakroom? It’s not at all clear at this point, but what is understood is the fact that the DOE’s lack of technical oversight is at least as troubling as the misspending.

According to our review, several projects needing additional technical oversight are under way but the program, as of February of 2011, had not brought in additional technical oversight expertise to supplement program staffs’ oversight. For example, ATVM officials identified one borrower with projects at a stage requiring heightened technical monitoring; however, ATVM program staff alone had monitored the technical progress of the project. ATVM officials told us that the manufacturer has experience with bringing vehicles from concept to production so additional technical oversight expertise has not been needed, despite the procedures’ calling for it. Further, according to documents we reviewed, at the time of our report, four borrowers—rather than the single one identified by ATVM—had one or more projects that, according to the program’s procedures, had already reached the stage requiring heightened technical monitoring. Because ATVM staff, whose expertise is largely financial rather than technical, had so far provided technical oversight of the loans without the assistance of independent engineering expertise, we found that the program may be at risk of not identifying critical deficiencies as they occur and DOE cannot be adequately assured that the projects will be delivered as agreed.

And, if you really think about it, it’s amazing that the ATVM’s auditors found misspending at all, considering the program’s staff doesn’t actually have the expertise to know if loan recipients are delivering on their proposals. Which is almost appropriate considering the report finds that

Although the ATVM program has established performance measures for assessing the performance of ATVM-funded vehicles relative to the performance of similar vehicles in model year 2005, the measures stop short of enabling DOE to fully determine the extent to which it has accomplished its overall goal of improving the fuel economy of all passenger vehicles in use in the United States. The measures stop short because they do not isolate the impact of the program on improving U.S. fuel economy from fuel economy improvements that might have occurred in the absence of the program—by consumers investing in more fuel efficient vehicles not covered by the program in response to high gasoline prices, for example. In addition, the ATVM program lacks performance measures that will enable DOE to assess the extent to which it has achieved the other two goals of the program—advancing automotive technology and protecting taxpayers’ financial interests.

At this point, it almost seems like George Bush had it right the first time, and that these mismanaged loans to hugely risky firms like Fisker and Tesla should have just been used to fund the “unavoidable” Detroit bailout.

At the suggestion of a well-wisher, I picked up the July copy of Motor Trend for my flight back home Iowa yesterday. Though some of the stories showed improvement in that publication’s quality of coverage, the item pointed out by our tipster [online here] was disappointing indeed. The piece, on Fiat’s ongoing acquisition of Chrysler’s equity includes the following paragraph:

Fiat is expected to obtain another 5 percent of Chrysler soon to bring its interest to 51 percent, provided it introduces a 40-mpg (highway) EPA-rated car built in the U.S. wearing a Chrysler brand badge before the end of 2011. With Fiat and Chrysler pulling the plug on electric car development, the 40-mpg car is likely to be a 1.4-liter Multijet-powered Dodge Caliber. The Caliber is scheduled for replacement in model year 2013, so the Multijet version could be a 2012 model only, with the powertrain carried on to its replacement.

So, what’s the problem? Well, as TTAC (and precisely nobody else) has reported, the government’s agreement with Fiat is not for that firm to build “a 40-mpg (highway) EPA-rated car.” It takes some digging through the corporate agreement between Fiat, Chrysler, the UAW and the Treasury, but it’s clear that the government requires that Fiat build a car that tests at 40 MPG combined, using the old “unadjusted” (Pre-1985) CAFE fuel economy rating. Which means that, although Fiat could build a car capable of 40 MPG EPA highway, the government’s agreement requires as little as 31 MPG EPA Combined. Which means M/T’s write-up technically falls on the wrong side of the truth. Although, to be fair, I have yet to find a media outlet that has got this story right…

Bloomberg reports that a “person familiar with the matter” says the US Treasury won’t sell its remaining stake in GM as long as the automaker trades below its $33/share IPO price. Previously the government’s auto team had said it would not try to “time the market” and our analysis showed that the Treasury was likely to sell sometime late this Summer. But it’s been months since GM spent more than a few days above its IPO price, indicating that Treasury may be waiting considerably longer if the IPO-price floor is set in stone. And with $36.5b in cash equivalents on hand and only $5b in debt, GM’s $45b market cap is hardly encouraging… especially with investors waiting for The General to match Ford’s profitability levels. Heavier discounts mean a lower operating profit for GM in the US market, and the first quarter shows a $1b swing in pricing between the two firms (with Ford improving $700m and GM dropping $300m) according to Bloomberg. Lower finance earnings are also holding The General back relative to Ford. So, what’s GM’s response?

CEO Dan Akerson used a strange inversion of the old “what’s good for General Motors is good for America” formulation to explain his firms struggles to shareholders, telling the Detroit Free Press

More than any other company that I’ve been a part of … we are tied to the economy. I worry about a jobless recovery, because people who have jobs buy cars.

And despite GM’s giant cash pile, or rather, because of it, Akerson seems more worried about the credit market than anything else. The WSJ [sub] reports that much of GM’s cash could go towards building up in-house finance operations, as well as funding pensions, restructuring Opel, dropping $5b on its Korean GM-Daewoo operations,  investing in product and upgrading facilities. And because of his emphasis on the finance side, the Freep reports

GM is still working to restructure, Akerson said. But he worries about GM’s prospects if Congress doesn’t raise the debt ceiling this year, causing the U.S. to default on loans. “I think it would shake the credit markets tremendously,” Akerson said. “I think we shouldn’t underemphasize that and play chicken with our national credit rating, our national honor.”

Akerson isn’t the only CEO to worry about credit markets, but wasn’t one point of the bailout to help make GM less sensitive to credit market shocks? In any case, Akerson’s warning to the feds wasn’t just idle chatter, as even he seems to believe that the government could be forced to either take a loss on its equity stake in the short term or hold on for the long term.

Before the meeting, Akerson told reporters he wasn’t happy with GM’s stock performance, but he felt stockholders should view GM as a longer-term investment. “You invest for the two-, the five-, the 10-year periods,” he said.

Yet the White House isn’t going to want to still own GM equity by the time the 2012 election campaign hits high gear… but then it won’t want to incur larger losses than the $14b-$16n it’s been forecasting. Which leaves the bailout boosters in something of a damned-if-you-do, damned-if-you-don’t position. Which, in turn, puts the pressure back on GM to buy out the government stake on its own terms. And sure enough, a number of reports suggest that GM (or its “executives”) could buy back the government’s stake… but the government doesn’t want it to look like The General is benefitting from from its politically-motivated impatience, and that option seems to be off the table now. Instead, GM could buy up outstanding public shares, artificially inflating the price and allowing the Government to exit with (relatively) minimal losses.  In short, a variation on a pump-and-dump (and, because the money ultimately comes from taxpayers, yet another shell game). The stuff of inspirational campaign fodder it ain’t, but it may just be the only option left on the table.

The U.S. jobless rate just rose to 9.1 percent. Employers added the fewest workers in eight months during May. The housing market is double-dipping. Only 16 month to go until the next presidential election. It’s the economy, stupid.  The President has to do something. What does he do?

“President Obama’s visit to a Chrysler plant in Toledo, Ohio, on Friday was the culmination of a campaign to portray the auto bailouts as a brilliant success with no unpleasant side effects. “The industry is back on its feet,” the president said, “repaying its debt, gaining ground.”

If the government hadn’t stepped in and dictated the terms of the restructuring, the story goes, General Motors and Chrysler would have collapsed, and at least a million jobs would have been lost. The bailouts averted disaster, and they did so at remarkably little cost.”

He’s wrong, writes David Skeel, a professor of law at the University of Pennsylvania, in his op-ed piece in the Wall Street Journal.  Steele is the author of “The New Financial Deal: Understanding the Dodd-Frank Act and its (Unintended) Consequences” .

“The problem with this happy story is that neither of its parts is accurate. Commandeering the bankruptcy process was not, as apologists for the bailouts claim, the only hope for GM and Chrysler. And the long-term costs of the bailouts will be enormous.”

David Skeel doesn’t buy the story that the bailouts were done at little cost. According to Whitehouse estimates, the  bailout will cost the tax payer nearly $14 billion. And that’s a lie, says Skeel.

“But the $14 billion figure omits the cost of the previously accumulated tax losses GM can apply against future profits, thanks to a special post-bailout government gift. The ordinary rule is that these losses can only be preserved after bankruptcy if the company is restructured—not if it’s sold. By waiving this rule, the government saved GM at least $12 billion to $13 billion in future taxes, a large chunk of which (not all, because taxpayers also own GM stock) came straight out of taxpayers’ pockets.”

If you or I would take that tax loss under these circumstances, we’d go to jail.  GM received a tax holiday for many years. But that’s not the worst of the bailout, says Skeel:

“The indirect costs may be the worst problem here. The car bailouts have sent the message that, if a politically important industry is in trouble, the government may step in, rearrange the existing creditors’ normal priorities, and dictate the result it wants. Lenders will be very hesitant to extend credit under these conditions.

This will make it much harder, and much more costly, for a company in a politically sensitive industry to borrow money when it is in trouble. As a result, the government will face even more pressure to step in with a bailout in the future. In effect, the government is crowding out the ordinary credit markets.”

It may not just make it harder to borrow when a company is in trouble. It may make it much harder to borrow, period. When the rule of law is set on its head, when senior debt is thrown by the wayside for political expediency, then investing in Russia suddenly looks like a safe investment.

I am sorry I am being brash but when you owe money to people and you pay them back you shouldn’t be celebrating. You just cut them a check and send them home and say thank you on your way out

We’ve given Fiat/Chrysler CEO Sergio Marchionne some grief for his somewhat unseemly self-congratulation at his repayment of “every penny loaned less than two years ago.” This quote, given to CNBC, is more what we were looking for. After all, one imagines that Chrysler doesn’t hold such celebratory spectacles for folks who finish paying off loans on their Calibers and Caravans. Acknowledging the mundanity of Chrysler’s Wall Street re-fi is a much better way for the firm to re-boot its post-bailout relations with the American people. For this quote, as much as for the promising but still-wildly-uncertain turnaround of Americas most troubled automaker, I am happy to extend Mr Marchionne and his team a modest, unceremonious word of thanks.

According to the White House’s just-released report titled “The Resurgence of the American Automotive Business” [PDF here]:

The U.S. Government provided a total of $80 billion to stabilize the U.S. automotive industry through investments in General Motors (GM), Chrysler, Chrysler Financial, Ally Financial, and programs to support automotive suppliers and guarantee warranties. As of today, $40 billion has been returned to taxpayers. While the government does not anticipate recovering all of the funds that it invested in the industry, the Treasury’s loss estimates have consistently improved – from more than 60 percent in 2009 to less than 20 percent today.

Independent analysts estimate that the Administration’s intervention saved the federal government tens of billions of dollars in direct and indirect costs, including transfer payments like unemployment insurance, foregone tax receipts, and costs to state and local governments.

This is as close as we’ve gotten to a thorough accounting of the full cost of the auto industry bailout, as both GM and Chrysler have erred on the side of counting as little of their own taxpayer support as possible (leaving out aid to their predecessor firms, finance companies and suppliers). On the other hand, it’s also two short paragraphs in a ten page report… and the rest of the document hews pretty closely to Democrat strategist Ron Klain’s advice to the White House, specifically

tell the story with fewer numbers and more emotion; less prose and more poetry

While the media debates whether this means the bailout bill will come to $14b or $16b, it’s becoming clear that the final number won’t make a big difference… at least politically.