Fun with Numbers: GM’s Phony ‘Payback’ of Taxpayer Loans

http://pjmedia.com/blog/fun-with-numbers-gm-payback-of-taxpayer-loans/

Last week, Government/General Motors Chairman Ed Whitacre went to the pages of the Wall Street Journal
to crow about how well the company is supposedly doing. In “The GM Bailout:
Paid in Full,” he told readers the following:

We’re paying back — in full, with interest, years ahead of
schedule — loans made
to help fund the new GM. Our ability to pay back these loans less than a year
after emerging from bankruptcy is a sign that our plan for building a new GM is
working.

Whitacre then took
to the airwaves to announce the payoff as a done deal, saying we
“have repaid” the loans.

There are two “little” problems with Whitacre’s
presentation. First, the “Bailout Paid in Full” headline in the Journal
doesn’t pass the truth test no matter how far you try to stretch it. As Forbes
magazine’s Jerry Flint reminded readers:

That still leaves $43 billion. GM can say they paid us back
because of the $50 billion in total support, only $7 billion was counted as a loan and
the rest was traded for equity in the company that emerged from bankruptcy. But
that is really an accounting trick so that GM doesn’t have to pay interest on
that money.

That’s a great point. The government poured tens of billions
into GM in return for a 61% ownership stake. Unless and until GM goes
public and the government cashes out its shares for at least the $43 billion
cited plus at least 5% for each year of delay to account for the time value of
money, taxpayers will be getting the short end of the stick.

What’s more, the funds for GM’s loan “repayment” did not
come from cash generated by operations. In fact, the company’s latest available
financial information
indicates that from September 30 (Page 2 at link) to December 31 (Page 123 at link) it burned through
$2.4 billion in cash and equivalents, while its working capital (current assets
minus current liabilities) fell by $2.75 billion. TARP Inspector General Neil
Barofsky has asserted, as paraphrased by Fox News, that GM “only repaid the
bailout money by dipping into a separate pot of bailout money.” Good luck
finding that critical piece of information anywhere else in the establishment press.

The situation isn’t any better at GM’s fellow bailout
recipient Chrysler — nor is the press coverage.

Chrysler lost $3.8 billion during the 205 days after it
emerged from bankruptcy last year. It lost another $197 million in the first
quarter of 2010. Here was the Associated Press’s headline about those
contemporaneous announcements: “Chrysler Posts $197M Loss But Cash Balance
Grows.”

http://www.sodahead.com/united-states/gm-paying-employee-4000-performance-bonuses-before-they-pay-back-our-tax-dollars-that-they-borrowe/question-1515135/

GM paying employee $4,000 performance bonuses BEFORE they pay back our tax dollars that they borrowed.

GM to pay more than $400 million in worker bonuses

DETROIT – Less than two years after entering bankruptcy, General Motors will extend millions of dollars in bonuses to most of its 48,000 hourly workers as a reward for the company's rapid turnaround after it was rescued by the government.

The payments, disclosed Monday in company documents, are similar to bonuses announced last week for white-collar employees. The bonuses to 76,000 American workers will probably total more than $400 million — an amount that suggests executives have increasing confidence in the automaker's comeback.

In the four years leading up to its 2009 bankruptcy, GM piled up more than $80 billion in losses and was burdened by enormous debt and costly labor contracts.

Obama Car Czar: We never said taxpayers would get GM bailout money back

http://www.therightscoop.com/obama-car-czar-we-never-said-taxpayers-would-get-gm-bailout-money-back/

Steven Rattner, Obama’s Car Czar, was asked by CNBC if the taxpayers would get paid back by GM. He replied:

No, but we never said the taxpayer was gonna get paid back. We put 82 billion into the car industry as a whole. We will get back all but 14 billion plus or minus of it. But in return for that we saved 2 million jobs in the Midwest and two great American companies. You compare that to the $875 billion dollar stimulus program or the trillions of dollars of QE1,2,3.

I think the tax payers got a good deal.

i think the tax payers got a good screwing!!!!!!!!!

An American Auto Bailout – For France

http://abcnews.go.com/blogs/politics/2012/03/an-american-auto-bailout-for-france/

FACT CHECK

http://www.factcheck.org/2010/04/sunday-replay-2/

the government still owns 61 percent of GM, an equity stake of $40 billion-plus. (The government has just a 9.9 percent stake in Chrysler.) Shelby said that a full payback from the auto companies "will never happen, not all of it." And the nonpartisan Congressional Budget Office agrees with that. The CBO estimated in March that the automaker bailout will ultimately cost the government close to $34 billion.

The Alabama senator is also correct in saying the automakers paid back the money with Troubled Asset Relief Program money. But it’s not a matter of robbing Paul to pay Paul; GM simply gave back the TARP money it had been lent, and which had been held in escrow by the government should GM need it. An April report from the special inspector general noted that the Treasury Department poured lots of money into GM — $49.5 billion in total. Most of that was converted into an ownership stake in the form of common and preferred stock owned by the government. But a total of $7.1 billion was a straight loan, which GM took on as debt.

It's all over but the waiting to celebrate !! This Texas Independent is going to vote, for the first time, for POTUS Barack Obama, and hope it is God's will !

Dam right its over... Oblabma is not fit to scrub a toilet let alone hold a title... Biggest MORON to ever hit the planet... three worse ever in modern times 1. Tie Hitler-Stalin 2. obama Hitler and stalin were just evil.. obama is evil and a dumb @$$....PATHETIC

Hitler and Stalin were nowhere near as bad as obama!

Green Technology is an economic disaster

Goodnight Sunshine

Germany is cutting solar-power subsidies because they are expensive and
inefficient

http://www.slate.com/articles/news_and_politics/project_syndicate/2012/02/why_germany_is_phasing_out_its_solar_power_subsidies_.html

Spain's Green Disaster a Lesson for America

http://www.cbn.com/cbnnews/finance/2011/November/Spains-Green-Disaster-a-Lesson-for-America/

No question that the Republicans are for feathering the nest of their rich benifactors, but for Joe to say that the Obama administration is tough on the bankers, who caused our collapse, is absolutely untrue. Banks have been making more money under Obama than ever before and paying record bonuses, and they have been limiting the money lent into the American economy. Obama has insulated criminals in the banking system from prosecution ever since he got the power to do so in 2009. Mitch McConnell is a shill but so is Joe Biden. A pox on both of their houses.

http://cascadepolicy.org/pdf/pub/RenewableEnergyFailure12.14.10.pdf

PORTLAND’S RENEWABLE ENERGY FAILURE

http://motorcitytimes.com/mct/2010/07/green-energy-failure-windmills-solar-panels-and-hydro-project-cant-reliably-provide-power-for-87-people/

Green Energy Failure: Windmills, Solar Panels and Hydro Project
Can’t Reliably Provide Power For 87 People

Posted
on July 5, 2010 by steve

The tiny island of Eigg off the coast of Scotland made a big
push for ‘green energy’ recently. They designed their system to provide 95% of
the electrical needs for the 87 residents of their island. This should be
fairly straightforward, since the residents of the island are not big users of
electricity to start with. They only received regular electrical service in February
2008.

The new ‘green energy’ system the residents of Eigg installed
was designed to provide a meager 5kW (max.) of power per household. Via the Daily Mail:

Right now, however, their award-winning and highly complex
eco-energy system, which allows each household access
to a maximum of 5kW of energy at a time (enough to power a washing machine,
a small heater or a kettle, but not all at once), is lying largely idle.

So the wind turbines are still and silent. The hydro turbines in
the rivers and dams are quiet. And toasted teacakes and hot tea are off the
menu at the Eigg Tearooms.

So what on earth’s going on? Have the Eigg eco-innovators been
victims of some act of jealous vandalism? Has their award- winning electricity
system blown a fuse?

Er, no. It turns out that when the good people of Eigg put their
faith in strong winds and pounding rain to provide all their electricity needs,
they overlooked one possibility – a spell of lovely weather.

Go figure, no rain or wind and the solar panels
are not cutting it. Of course this is not a big deal to the residents of Eigg,
but imagine how chaotic this would be in a large US City.

We’ve never taken electricity for granted,’ says Maggie, 61, has
lived on Eigg for 34 years and has a daughter and granddaughter living nearby.

‘Until a couple of years ago, I was supplied by a tiny
hydroelectric generator that produced a maximum of 1kW of power. Which powered
my lights, TV and computer, but not a washing machine, electric kettle, toaster
or anything like that. And I was one of the lucky ones.’

A few of her neighbours had no running water and others relied
on their own generator which had to be turned on every morning by hand.

‘So if you got up for a pee in the middle of the night, you had
to take a torch with you or fumble about in the dark,’ she adds.

‘And the noise was terrible. If you walked round in the evening,
you’d hear a terrible thumping of generators.

If green energy can’t reliably provide power for 87 residents
(who are not big consumers of electricity) how do supporters of ‘green energy’
propose we are going to power large US cities using windmills
and solar panels?

Did Joe Biden ever graduate from high school?

Honest Jo

I think you're one of the founding members of the Flat Earth Society the President was talking about yesterday. Seriously, how many posts do you have at this point? All the links you so amply supply...what a joke. Let me be honest with you jo.....No matter how many times you comment here, there's one thing I can guarantee you. President Obama and Vice President Biden will be re-elected in November. You can book the farm on it, jo. The GOP is going down the tubes, and they either can't or won't stop the slide. For the next 8 months, the Vice President will keep on naming names to remind everyone of the clear choice the voters have. OBAMA/BIDEN 2012!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

The GOP mantra "Just let em die!" (tea bag audience applause). The same attitude was given to the US auto industry.

Dee.....how's that 'green energy' working out for you? How's "Solyndra" stock doing??? How much did President HOPE DOPE lose for the American Taxpayers on that one??? Maybe Eric Holder should be investigating the White House for fraud???

Bob-If you believe all uninsured Americans and people in the US auto industry are all "liberals", then you're a bigger idiot than your posts lead me to believe.

Thanks honest jo

I don't think people realize that not only political campaigners hire bloggers so do corporations and lobbyists

Not all people here are sharing there thoughts with you.

Some are here earning a paycheck.

Maybe you?

The only person dumber than Obama is Joe.

Let's take GM. So the product name, the designs, the state of the art assembly plants the dealerships would all have just boards up and closed?

Of course not , the company would most likely have ran under bankruptcy, most of the airlines have went through this process, and reorganized. Of course re-organization would have meant belt tightening for the union folk. Can't have that.

So what we get is that oh so special treatment that Obama's political allies seem to get.

Want a bailout, here you go, secured creditors be damned, want a health care waiver sure here you go, catholic church pound salt

And the republicans just want to "let them die"?

How about just follow the same rules that the rest of us have to follow. If you spend more than you take in for long periods in time you end up bankrupt. No one owes you a bailout.

Yes, the repubs have alienated all of the government consumers. Good.

Biden dismissed as inaccurate the Republican sentiment that, without government intervention, the private sector would have stepped in to the void to aid the ailing automotive sector.

Hey Joe, we'll never know if that was accurate or inaccurate because you guys prevented the bankruptcy process from doing what it was created for, allow a company to reorganize by modifying and restructuring some unfavorable agreements and contracts and emerge from bankruptcy better able to compete in the market place. All of this without taxpayer help. If that didn't work, then, and only then, could taxpayer dollars been placed at risk.

Instead Joe and his pals played bankruptcy judge, deciding who would take the hits and who would be treated favorably. After the dust settled, the organization to which these 500 audience members Joe addressed belonged got everything and the secured creditors got the shaft. Go figure. It's almost a certainty that if bankruptcy had been allowed to proceed among those unfavorable agreements and contracts that would have be modified would have been the union contracts and Joe and his guys couldn't let that happened.

GM has paid the US back? What's 43 Billion between freinds. Between 1992 and 1998 16 auto assembly plants were built in Mexico by Ford, GM, Chrysler, Nissan and Toyota. The reason they were built is to move to a non-union workforce. Today those plants employ 143,000 auto workers.

Ford didn't need a bailout because they took a hard line in negotiating with the UAW and made a deal which lowered their costs. The management at GM was so busy puffing up their bonuses that they took a different tack...they folded up like a row of cheap lawn chairs, let the UAW drive their operating costs through the rooof and then went to Obarry and asked for a handout to reward their poor management practices and miserable managers with yet larger bonuses. Next time we'll just let them collapse as Obarry just bought a bunch of union votes and America gets crappy Government Motors cars that break and catch fire. GM should have ben allowed to go the way of the Dodo...into extinction.

Can anyone truthfully say that it was wrong to bail out the auto industry? It was easy to say before the bailout happened, but nearly impossible to say NOW. The GOP just can't admit that they were wrong about it. In other words, they can't tell the truth about the matter. Since they are hiding the truth on purpose, can we believe in them? Nah, I think not. Then we have "The Donald...talking like he knows it all. Hey, if he knew it all, then why did he file bankruptcy twice???? Yeah, right. He's should revive the know-nothing party, but with a different platform! Blow hard, know-nothing. That's our Donald.

Rudolph Murdock & Fox news...they distort, you decide