A new poll shows that a full 67 percent of U.S. voters oppose the Obama administration’s plan to bail out General Motors with nearly $50 billion – and 51 percent of all Americans say they would rather buy a car from Ford because it did not take a government bailout.
In a statement, the White House announced today that the U.S. Treasury will provide approximately $30.1 billion to GM through an expedited chapter 11 proceeding and transition the new GM through its restructuring plan.
The federal government is set to receive approximately $8.8 billion in debt and preferred stock in the new GM and approximately 60 percent of GM’s equity.
The Governments of Canada and Ontario will also lend an additional $9.5 billion to GM and New GM. According to the plan, the Canadian and Ontario governments will receive $1.7 billion in debt and preferred stock and 12 percent of the equity of the new GM. The Canadian government claims it will divest itself of its GM stake by 2018.
“Based on these steps, the new GM will have far less debt and a world class balance sheet,” the White House said in the statement. “This will allow the company the financial stability to weather future market downturns and generate significant excess free cash flow to invest in the business.”
But according to the latest Rasmussen Reports national telephone survey, only 21 percent of U.S. voters support the Obama administration’s plan to inject $50 billion into the auto giant and give the governments 70 percent ownership of the company.
The majority of voters – or 56 percent – say it would be better to let GM go out of business.
Most political conservatives and moderates agree that it would be best to let GM fail. A majority of voters in all age groups concur, as do 59 percent of men and 53 percent of women.
According to Rasmussen Reports, an earlier survey found that 76 percent of voters believe economic improvement is possible even if GM fails.
In retrospect, most voters (60 percent) say the auto bailouts were a were a bad idea, and two out of three believe taxpayer bailouts are simply going to those who caused the economic crisis.
Few voters (18 percent) believe the federal government will do a good job of running GM, according to the poll. Most, or 57 percent, expect the government to pass laws and give auto companies an unfair advantage over other companies.
“The government has no desire to own equity stakes in companies any longer than necessary, and will seek to dispose of its ownership interests as soon as practicable,” the White House statement said. “Our goal is to promote strong and viable companies that can quickly be profitable and contribute to economic growth and jobs without government involvement.”
President Obama said today that he realizes the deal may “give some Americans pause” and that his administration “inherited a financial crisis unlike any that we’ve seen in our time” forcing it to take steps that it would not have otherwise considered.
“Executing this plan will require a substantial amount of money that only a government can provide,” he said. “… Understand we’re making these investments not because I want to spend the American people’s tax dollars, but because I want to protect them.”
The president also said the government is “accelerating the purchase of a federal fleet of cars to jumpstart demand and give the industry a boost at a time when it needs one.”
Nonetheless, 61 percent of voters believe Ford is more likely to survive than GM or Chrysler, and 51 percent say they are more likely to buy a Ford because the company didn’t take a government bailout.