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Message
GM Commercial
Posted on 4/23/10 at 10:31 am
Posted on 4/23/10 at 10:31 am
Pres of GM saying they repaid the government loan in full, five years before original plan. Is he referring to the bailout money? If so, Im actually impressed with GM.
This post was edited on 4/23/10 at 10:31 am
Posted on 4/23/10 at 10:34 am to Big Fat
quote:
Im actually impressed with GM.
Don't be.
As I understand it...the NEW GM (i.e. post bankruptcy) paid back their loan. The pre-bankruptcy GM has not.
quote:
While it's great that GM has so promptly repaid the final $5.8 billion it borrowed from the U.S. and Canada last year, taxpayers are still on the hook for tens of billions of dollars, some of which we're unlikely to recover.
For starters, the Obama administration bigfooted the bankruptcy process last year, benefiting autoworkers at the expense of investors. Bondholders wound up with a smaller stake in the new company than retirees, who were owed less. As I wrote at the time, almost one-fourth of the GM bondholders were small investors, many of whom held the bonds in retirement accounts.
Meanwhile, taxpayers in the U.S. and Canada invested about $50 billion to buy a 61 percent stake in GM. Neither the cost of the bondholders' haircut nor the current value of taxpayers' investment is known because GM's stock isn't publicly traded.
Whitacre, speaking with reporters in Washington this week, said “the stock could be worth a lot” and predicted taxpayers could get their money back.
Or they could not. According to its latest financial statements, GM is still losing billions, though less than it was last year. Its sales have improved, mostly because of an increased demand for fleet vehicles such as rental cars, long a crutch for domestic automakers. GM does seem to be winning back American buyers, especially those worried about stopping their Toyotas. It's not clear, though, if such gains are permanent.
The tab for GM's bailout also must include the bailout of GMAC, the automaker's former financing arm. GM sold a controlling interest in the company in 2006, but it retained partial ownership until last year. During that time, GMAC was a major peddler of subprime mortgages.
It stepped up to the bailout trough and promptly lapped up more than $16 billion. The government justified the bailout in part because GMAC provides financing that dealers for both GM and its failed rival Chrysler use to fill their lots with new car inventory.
Last month, the Congressional Oversight Panel, which monitors the government's $700 billion bank bailout, reported that the GMAC deal may cost taxpayers more than $6 billion.
The panel's chair, Elizabeth Warren, said GMAC isn't rehabilitated and that the bailout was done without an exit strategy or adequate protection for taxpayers. More money may be needed, she warned.
A study late last year by the conservative-leaning National Taxpayers Union estimated that the GM bailout will cost $12,200 per car, assuming GM meets its sales projections. Include Chrysler, and government support for the auto industry comes to $800 per taxpaying family, the study found.
This post was edited on 4/23/10 at 10:39 am
Posted on 4/23/10 at 10:38 am to Big Fat
quote:Smoke and Mirrors Used to "Pay Back" Loan
But Grassley said in his letter that a Securities and Exchange Commission form filed by GM showed that $6.7 billion of the tens of billions the company received was sitting in an escrow account and available to be used for repayment. He called on Geithner to provide more information about why the company was allowed to use bailout money to repay bailout money, and how much of the remaining escrow money GM would be allowed to keep.
Posted on 4/23/10 at 11:48 am to LSURussian
Russian quoted a blog. The end is near.
Posted on 4/23/10 at 12:09 pm to kfizzle85
I knew someone would call me on that when I posted it!
The choice was between quoting that link or FoxNews.com, so.......
The choice was between quoting that link or FoxNews.com, so.......
Posted on 4/23/10 at 12:19 pm to LSURussian
quote:
The choice was between quoting that link or FoxNews.com, so.......
6 of one . . . half-dozen of the other, huh?
Posted on 4/24/10 at 12:26 pm to LSURussian
Non-blog/Fox News link: GM payback fraud
Posted on 4/24/10 at 12:28 pm to davesdawgs
quote:
Non-blog/Fox News link:
Uh.....dave.....you might want to click on my link and then compare it to your link.
(Hint: the links are the same.)
Posted on 4/25/10 at 2:38 am to LSURussian
(no message)
This post was edited on 4/25/10 at 6:33 pm
Posted on 4/25/10 at 2:51 pm to lynxcat
If the government would've allowed GM declare bankruptcy, they would've been WAY better off. Then the UAW would've folded.
Posted on 4/25/10 at 5:11 pm to RonBurgundy
quote:Hence, the real reason Government Motors was bailed out.
Then the UAW would've folded.
Posted on 4/25/10 at 5:37 pm to LSURussian
I mean, they did declare bankruptcy. Unmolested, no, but they did declare bankruptcy.
Posted on 4/25/10 at 5:48 pm to kfizzle85
quote:Yes, they did but it wasn't a 'real' bankruptcy where debts either get wiped out or heavily reduced. It was a pre-packaged bankruptcy....or whatever the term was they used at the time.
I mean, they did declare bankruptcy.
GM's financial obligations to the UAW were left basically untouched, as I recall. If you know differently, I'd like to hear it.
Posted on 4/25/10 at 6:26 pm to LSURussian
It wasn't a liquidation, it was a re-org, it had a bankruptcy judge, and debts were either cut or converted. Was it a particularly odd bk, given the involvement of the gov? Certainly. Would I have rathered they let the market decide, and let them go into ch 7? Yes, without a shadow of a doubt, but it was absolutely a "real" bankruptcy.
Ask the GM equity holders how much they got (the answer is nothing). Both the bondholders and the UAW got converted, so yes, both parties debts were wiped out. ETA: Please note that I am not opining on the "fairness" of the outcome.
Ask the GM equity holders how much they got (the answer is nothing). Both the bondholders and the UAW got converted, so yes, both parties debts were wiped out. ETA: Please note that I am not opining on the "fairness" of the outcome.
This post was edited on 4/25/10 at 6:38 pm
Posted on 4/25/10 at 7:40 pm to kfizzle85
The contract with the UAW would've been null and void, the American public would've benefited GREATLY.
Posted on 4/25/10 at 7:43 pm to RonBurgundy
quote:
ETA: Please note that I am not opining on the "fairness" of the outcome.
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