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Opinion
Edward Niedermeyer

Carmakers' Summer Plans: Back to Bankruptcy?

Be prepared, taxpayers, the worrying news on your two carmaker "investments" seems to be just getting started.

With General Motors' non-recall scandal raising fresh questions about the kind of company taxpayers rescued five years ago, and its lawyers back in front of a bankruptcy courtthis week to fend off class-action suits, Detroit is finding out just how difficult it can be to escape the stain of bailout. Another reminder was this week's report from the Troubled Asset Relief Program special inspector general, indicating the losses on GM and Chryslers' bailouts ($11.2 billion and $2.9 billion respectively) were higher than previous Treasury Department accountings. Be prepared, taxpayers, the worrying news on your two carmaker "investments" seems to be just getting started.

America's auto market remains a precarious contradiction: loan terms are longer than ever and subprime penetration is approaching pre-recession levels, yet transaction prices are up. Gas prices, which usually spike in the summer, are heading toward 2008 levels again -- yet trucks have been outselling cars for months.