re: GM Commercial

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Im actually impressed with GM.

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Don't be.

As I understand it...the NEW GM (i.e. post bankruptcy) paid back their loan. The pre-bankruptcy GM has not.

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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.

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