The auto industry bailout was a controversial decision made by the US government to rescue two major American car manufacturers, General Motors and Chrysler, from bankruptcy during the 2008 financial crisis. The following is a timeline of events leading up to and following the bailout:
2008
In January, General Motors announces a $38.7 billion loss for 2007, the largest in its history. Chrysler also reports a $1.6 billion loss for the same year.
In September, Lehman Brothers files for bankruptcy, triggering a financial crisis that spreads to the auto industry. GM and Chrysler both request government assistance to avoid bankruptcy.
In October, Congress approves a $700 billion bailout package for the financial industry, but no funds are allocated for the auto industry.
In November, GM and Chrysler return to Congress to request a $25 billion bailout. The request is met with skepticism and criticism.
2009
In March, President Obama announces a plan to provide $5 billion in financing for auto parts suppliers to help stabilize the industry. The government also gives GM and Chrysler a deadline to submit a restructuring plan in exchange for additional aid.
In April, Chrysler files for bankruptcy and announces a partnership with Italian carmaker Fiat. The US government agrees to provide $6 billion in financing to support the restructuring.
In June, GM files for bankruptcy and announces plans to close several factories and eliminate thousands of jobs. The government agrees to provide $30 billion in financing to support the restructuring.
In July, GM emerges from bankruptcy and begins the process of restructuring. The government becomes the majority shareholder in the company.
In November, GM announces plans to repay its government loans ahead of schedule. Chrysler also announces plans to repay its government loans.
2010
In April, GM announces plans to invest $500 million in a new plant in Michigan, creating over 1,000 new jobs. The company also announces plans to repay its government loans in full by June.
In May, the US government announces that it has sold its remaining shares in Chrysler to Italian carmaker Fiat, effectively ending its involvement in the company.
In December, GM announces plans to repay its government loans in full by the end of the year, five years ahead of schedule.
2014
In January, Chrysler announces that it has repaid its government loans in full, six years ahead of schedule.
Conclusion
The auto industry bailout was a controversial decision that ultimately saved two major American car manufacturers from bankruptcy. The government's involvement in the industry was met with criticism, but it ultimately helped stabilize the industry and preserve thousands of jobs. Today, GM and Chrysler are both thriving companies and major players in the global auto industry.