"When the decision was made to bail out the auto industry, it was widely known that taxpayers would be saddled with a multi-billion dollar price tag, although no one knew what the exact cost would be. The Obama administration claimed that the cost would be worthwhile because of the number of jobs saved by the bailout. However, the administration may want to rethink its stance; if an upcoming court case is not decided in General Motors’ (GM) favor, taxpayers could be poised to lose another $31.3 billion on top of the current, optimistic projection of $25.1 billion.
According to a December 6, 2012 article in The Washington Free Beacon, “A New York federal judge may rule imminently on a case that could reverse the General Motors Bailout and send the company back into bankruptcy. At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009".
A November 21, 2008 WasteWatcher article written at the time the bailouts were being discussed in Congress suggested that lawmakers should have let General Motors enter into Chapter 11 bankruptcy. This would have allowed the troubled automaker to embark on much-needed restructuring while continuing to operate. Regardless of the New York court’s decision, the bailout remains a misguided and very expensive endeavor."
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