Forget making motor vehicles, the real money is there to be made in government.
General Motors and Chrysler — Detroit’s two rescued automakers — have rebuilt their lobby shops and are back spending millions to influence lawmakers on issues that can make or break their bottom line, like taxes and trade policy.
GM spent a combined $17.9 million on lobbying in 2011 and 2012, while Chrysler more than doubled its spending last year to $5.6 million. Even Ford, which did not take federal dollars, increased its spending on lobbying to $6.8 million last year.
“I still think it’s outrageous that General Motors stole some $20 [billion] or $30 billion from taxpayers. I’m sure, to them, that’s chump change,” said Sen. John McCain (R-Ariz.),
The Treasury Department has discretion over when to sell the position the government has in the automakers, but reportedly is looking to get a share price in the mid-$30s. GM’s stock price would have to hit $70 a share for the U.S. to break even on the bailout.
This is what happens when government gets into business. Crony capitalism ends up with the taxpayers footing the bill for insider deals between connected CEOs and unions and their pet politicians. And knowing exactly where the money came from, the companies redouble their lobbying, as Chrysler did, because they know that they’re eventually going to need another dip in the cool green pool of the treasury.