The end of the bailout era

In the final days of 2014, when most people in the car world were already home with families for well-deserved year-end vacations, the auto industry closed the final pages on its darkest modern chapter – the $80 billion bailout of General Motors, Chrysler, and Ally Financial, the former GMAC.

The Treasury Department sold its remaining $1.3 billion in Ally stock at the end of 2014, six years after then-President George W. Bush started money flowing to the industry, a program heavily expanded in the early days of President Barack Obama’s administration. With that stock sale, the government cleared $2.4 billion in profit on the $17.4 billion injected into Ally to keep it solvent in 2008 and 2009.

Taxpayers finally know exactly how much it cost them to rescue two of Detroit’s automakers and their lending arms – $9.2 billion. The money earned on the Ally sales couldn’t overcome the $1.3 billion loss on Chrysler or the more than $10 billion lost in saving GM.

Whether you agreed with the government’s decisions to prop up the automakers and lenders or opposed those actions, that era of U.S. automotive history is now over. It’s fitting that the last vestiges of the bailout closed in 2014, just as the motor vehicle world appears poised for the highest sales and profitability levels in decades.

With analysts predicting as many as 17 million new cars and trucks in 2015, it’s hard to remember what it was like in February 2009, when the seasonally adjusted annual rate hit 9.2 million units. That year, GM sold 2.1 million cars, 41% fewer than it sold in 2014. Chrysler’s sales more than doubled from their 2009 low to 1.6 million vehicles in 2014.

As painful as those days were, they set up much of the success we’re seeing today. Companies became more efficient, they focused on their core strengths, and after a few fallow years, they began producing the best class of cars and trucks most shoppers have ever seen.

Though a few pockets of weakness remain in the commercial and consumer markets, the future looks bright, and the good times look like they’re going to last for years to come. For one very unscientific example of an optimistic future, look no further than this magazine. We printed four issues last year, and that grows to six in 2015, a 50% increase.

Welcome to the post-bailout period of motor vehicle manufacturing. Let’s hope that this era will last many years and be long remembered for the success and prosperity it brings.