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Bailouts benefit Kentucky workers

General Motors — the auto company that was on the verge of total collapse less than two years ago — has made a turnaround that is nothing short of amazing and is well on the way of repaying the $50.7 billion U.S. taxpayers loaned the company.

At the same time, GM is taking a major step toward re-privatizing itself with a planned new initial public off ering (IPO) that will reduce the U.S. government’s stake in the company from 61 percent to less than 50 percent, opening the way for Uncle Sam to get completely out of the business of making automobiles.

To be sure, the changes in the company have been painful but necessary. It reduced its debt by cutting health care costs, eliminating huge chunks of a costly union contract and eliminating several divisions like Saturn and Saab. As a result, hundreds of workers had their jobs eliminated and those still working lost benefits.

However, while GM is not out of the financial woods yet, the numbers are promising. The company earned $865 million in the first quarter of this year and $1.3 billion in the second quarter, its best showing in six years. That’s quite a reversal from the April-June quarter of 2009 when the company lost a whopping $1.3 billion. It is now operating at 93 percent of capacity in North America compared to 39 percent in the second quarter of last year.

GM has repaid $7 billion of the $50.7 billion the government loaned it. It also named a new chief officer in advance of the IPO. …

The timing of GM’s IPO is out of President Barack Obama’s hands. But if the off ering — potentially the largest in U.S. history — is a success, it would provide pre-election evidence as vindication for the Obama administration’s takeover of the American car company that was once the largest company in the U.S. …

As a community with two steel mills that are highly dependent on sales to the U.S. auto industry, we are just one of many communities that would have been devastated economically by the collapse of the American car industry. The much criticized bailouts prevented that from happening.

— The Independent, Ashland, Ky.

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