Earlier
today, The Heritage Foundation released a paper by Center for Data
Analysis senior fellow James Sherk on the cost of the auto bailout that
took place in 2009. According to Sherk, the taxpayers are expected to
lose about $23 billion in the bailout, and all of these losses are
accountable to one thing: the Obama administration's special treatment of the United Auto Workers (UAW) during the bankruptcy process General Motors and Chrysler experienced in 2009. Sherk's paper shows that this special treatment will cost the taxpayers a total of $26.5 billion.
I sat down with Sherk last week for a phone interview to discuss the report. (Full disclosure: I was a contract employee for the Center for Data Analysis in 2010, and I did some work with Sherk during that time.)
Dustin Siggins: The entire taxpayer investment in GM and Chrysler was about $80 billion, and obviously included a variety of aspects to it. Were there other components of the bailout that could have been done better to save the same amount of money?
James Sherk: It's hard to quantify if they [the administration] could have been cost-conscious elsewhere. It's obvious where they spent too much on the UAW because of the treatment they received in opposition to traditional bankruptcy law. For example, a union in Delphi was not treated as well, nor were investors or non-union employees given the same preferential treatment as UAW employees, despite their relative legal equivalence to the UAW.
I sat down with Sherk last week for a phone interview to discuss the report. (Full disclosure: I was a contract employee for the Center for Data Analysis in 2010, and I did some work with Sherk during that time.)
Dustin Siggins: The entire taxpayer investment in GM and Chrysler was about $80 billion, and obviously included a variety of aspects to it. Were there other components of the bailout that could have been done better to save the same amount of money?
James Sherk: It's hard to quantify if they [the administration] could have been cost-conscious elsewhere. It's obvious where they spent too much on the UAW because of the treatment they received in opposition to traditional bankruptcy law. For example, a union in Delphi was not treated as well, nor were investors or non-union employees given the same preferential treatment as UAW employees, despite their relative legal equivalence to the UAW.
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