To Republicans’ Consternation, Chrysler Turns Profits
Reuters reports that Chrysler’s sales have outpaced European carmaker — and Chrysler parent company — Fiat’s sales in recent months. According to the analysis, Chrysler June earnings ($155 million) were only slightly less than Fiat’s three month total (Fiat earned $175 million from April through June).
These impressive numbers have enabled the once-troubled American company to pay back its debt to the United States government well ahead of schedule; Chrysler was not expected to pay back its debt until 2017. Furthermore, the 2008 deal was supposed to cost American taxpayers $40 billion but will now only cost them $1.3 billion , a relatively low cost considering the high stakes of the deal and the tens of thousands of jobs saved.
These numbers must come as a surprise to the many Republican politicians who came out strongly in opposition to the government bailout in 2008. For example, Richard Shelby, an Alabama Republican, referred to the intervention as merely “delaying [the auto industry’s] funeral.”
Similarly, other Republicans thought that the 2008 bailout would stymie innovation and do no more than prolong the decline of the American auto industry. In an editorial for The New York Times, Republican 2012 presidential frontrunner Mitt Romney declared that if the bailout went through, we could “kiss the American automotive industry goodbye.” He went on to say that if the bailout passed, it would fail to reverse “the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses.”
The most recent reports seem to prove the former exec whose candidacy is predicated on a history of turning around failing businesses wrong, as Chrysler has come out more successful than its European buyer. Instead of costing American taxpayers tens of billions of dollars, the overall auto rescue effort has saved millions of jobs and preserved an icon of American manufacturing.