Lawrence Summers, Director of the White House's National Economic Council, hailed General Motors' decision to repay $6.7 billion in loans to the federal government.
In a post to the White House blog, Summers said that the American auto industry had come a long way from being on the brink of collapse just a year ago.
"What a difference a year makes," he said.
Summers also noted that Chrysler has announced that after taking one-time charges for restructuring, the company produced an operating profit for the first quarter of 2010.
"The prospect of a faster than anticipated exit from government involvement and a return of most of the taxpayers' investment in these companies has materially improved," Summers said. "This turnaround wasn't an accident of history."
He added, "It was the result of considered and politically difficult decisions made by President Obama to provide GM and Chrysler - and indeed the auto industry - a lifeline, if they could demonstrate the will to reshape their businesses and chart a path toward long-term viability without ongoing government assistance."
While the auto industry shed more than 400,000 jobs last year, Summers said analysts estimated that at least 1 million more would have been lost had GM and Chrysler been liquidated.
"That didn't happen," he said. "Instead, over the past nine months since GM and Chrysler emerged from bankruptcy, the industry has actually added 45,000 jobs - the strongest pace of job growth in the auto industry in nearly a decade."
He added, "This industry and our economy have a long way yet to go to repair the damage from this recession and return to full health. But the distance these companies and the auto industry have traveled over the past year is a bright spot on the road to recovery."
A new White House report also highlights the early repayment of the GM loan as a sign that taxpayers will likely end up spending less than projected on the auto company bailouts.
"Overall, the investments made by the prior and current Administration in GM, Chrysler, and GMAC will likely result in some loss, but the U.S. Treasury anticipates it to be much lower than forecast last year," the report says.
It adds, "Prospects for repayment and a faster than anticipated exit from government involvement in the industry have improved."
by RTT Staff Writer
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