Obama's GM Numbers Are Not Adding Up
December 17, 2010
National Public Radio's Mara Liasson reported that President Obama "said that since [General Motors] GM and Chrysler have emerged from bankruptcy, they've created more than 75,000 new jobs." But if you listen closely, this is not exactly what the president says, according to John Berlau, director of the Center for Investors and Entrepreneurs at the Competitive Enterprise Institute.
Obama actually said, "Since GM and Chrysler emerged from bankruptcy, the industry has created more than 75,000 new jobs."
Just what did the president mean by "the industry?"
- An earlier White House "fact sheet" touting this job growth cited the Department of Labor's Bureau of Labor Statistics (BLS).
- And indeed, if one were to look at BLS's industry category of "motor vehicles and parts" and measure from its low point in May 2009, when there were 626,000 jobs, to July 2010, when 705,000 jobs, this would be a growth of 79,000.
- The problem for Obama, though, is whether we're talking about 60,000 or 80,000 additional jobs, this figure includes U.S. jobs created by all manufacturers -- foreign and domestic.
In fact, despite the $82 billion from taxpayers and despite GM's successful initial public offering, a look at GM and Chrysler alone still shows a huge net job loss from the bankruptcy. And this does not even count the losses from the rapid closure of car dealers, as well as the likely loss of jobs due to the higher cost of capital as a result of the disparate treatment of "old GM" bondholders in the bankruptcy in favor of the United Auto Workers, says Berlau.
Source: John Berlau, "Obama's GM Numbers Are Not Adding Up," Competitive Enterprise Institute, December 13, 2010.
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