As long as we are in an automotive frame of mind … how is “Government Motors” doing?

Way better than anyone would have thought last year, when skeptics were calling upon Congress and the Obama administration to allow the fabled car maker to die.

Management was clueless, and the case was hopeless, many said.

An unpopular decision was made for the government to step in, force both Chrysler and General Motors into bankruptcy and restructure them under government supervision.

GM recently reported its first quarterly profit in three years, with net income of $865 million. Chrysler is also showing positive cash flow.

Both automakers are selling more cars, and getting higher prices and using fewer discounts to do so.

Ford, meanwhile, which turned down the government help, has been rewarded handsomely in the marketplace for doing so, reporting $2.1 billion first-quarter net income.

It was a big gamble for U.S. taxpayers, but it appears to be paying off.  The U.S. Treasury has about $36.1 billion invested in General Motors, which is now estimated to be worth about $40 billion.

It was a painful process. GM closed dealerships, eliminated models, re-negotiated contracts with unions and fired two CEOs.

Would we have been better off letting the free market rule last year?

Several hundred thousand workers would have lost their jobs, communities would have lost dealerships and towns across the U.S. would have been decimated by the closing of assembly and part-supplier factories.

A year later, the risky bet seems to be paying off.

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