BS: Still Government Motors...

Subject: BS: Still Government Motors...
From: beardedbruce
Date: 30 Apr 10 - 08:22 PM

http://www.forbes.com/2010/04/23/general-motors-economy-bailout-opinions-columnists-shikha-dalmia.html

"In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM's government debt--not pay it back!

GM boasts that, because it is doing so well, it is paying the $6.7 billion five years ahead of schedule since it was not due until 2015. So will there be an accelerated payback of the rest of the $49.6 billion investment? No. That goal has been pushed back, as it turns out.

In order to recover that investment, the government has to sell its equity. It plans to do that only when GM becomes a publicly traded company once again. GM was hoping to turn a profit by the end of 2010 and float an initial public offering this winter. However, GM Chief Financial Officer Chris Liddell, when queried about that timeline a few days ago, demurred. The offering will be made, he said, "when the markets and the company are ready."

(Take that, taxpayers!)

The reality is that there is no certainty that GM will ever be able to make taxpayers whole. Some analysts such as Center for Automotive Research's Sean McAlinden and Global Insight's George Magliano believe that it will--eventually. McAlinden maintains that this will happen when the company's market capitalization touches $60 billion. (At GM's peak in 2000, this level was only $57 billion.) This is a challenging but not an impossible goal--provided the economy does not dip into another recession, he maintains. Magliano too maintains that the company will be able to pay back taxpayers if the industry is able to ramp up annual vehicle sales from the expected 10.8 million this year to 17 million in 2014 and GM captures 20% of these sales."

Subject: RE: BS: Still Government Motors...
From: Ed T
Date: 30 Apr 10 - 08:42 PM

Maybe some motor ideas here:

http://www.youtube.com/watch?v=IY_QYlXFe9Q

Subject: RE: BS: Still Government Motors...
From: artbrooks
Date: 30 Apr 10 - 09:05 PM

The "bailout" for GM included both a cash loan and some 60% of the company's stock. The loan has been repaid. The US government still owns the stock. Since GM isn't publicly traded right now, how can the Feds sell that stock to anyone, the company or anyone else?

Subject: RE: BS: Still Government Motors...
From: beardedbruce
Date: 30 Apr 10 - 09:08 PM

Art,

Did you read the article???


"As it turns out, the Obama administration put $13.4 billion of the aid money as "working capital" in an escrow account when the company was in bankruptcy. The company is using this escrow money--government money--to pay back the government loan.

GM claims that the fact that it is even using the escrow money to pay back the loan instead of using it all to shore itself up shows that it is on the road to recovery. That actually would be a positive development--although hardly one worth hyping in ads and columns--if it were not for a further plot twist.

Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5%) interest loan to retool its plants to meet the government's tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the small bailout loan makes the new--and bigger--DOE loan much more feasible.

In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM's government debt--not pay it back!"

Subject: RE: BS: Still Government Motors...
From: artbrooks
Date: 30 Apr 10 - 09:33 PM

Yep...and I also read the PolitiFact.com article on the same topic, which slants it a bit differently than Forbes.

Subject: RE: BS: Still Government Motors...
From: mousethief
Date: 30 Apr 10 - 09:45 PM

Waaaa, it's a car company sucking on the government tit and not a huge agricultural conglomerate or pig processor or farmers. Or aerospace or munitions manufacturers. In short, it's a deal a Democrat made, and not a traditional Republican tit-squeeze.

Subject: RE: BS: Still Government Motors...
From: catspaw49
Date: 30 Apr 10 - 10:13 PM

Well, since Chevy is still in racing I guess the Dems are going after NASCAR voters......

Spaw

Subject: RE: BS: Still Government Motors...
From: Stringsinger
Date: 01 May 10 - 01:26 PM

GM's business model is kowtowing to oil interests.

If they made electric cars, they could be back in business and save us a bundle.

At least they could have CAFE standards.

So what should we do, break out our bicycles on the freeways?
(Hmmmm, might not be such a bad idea).

I think that "UAW CIO" makes the nation roll and go......

"Taft Hartley" means higher taxes to bail out GM. If they protected their workers
they could produce a higher quality item that people would buy.

Subject: RE: BS: Still Government Motors...
From: kendall
Date: 01 May 10 - 04:27 PM

Now hear this! We drive a 2006 Chevy Impala and I will put it up against any "Rice burner" you want to drag out.
It is quiet, rides great, handles like a sports car, looks like a 2010 instead of a 2006 and it gets 30 mpg at highway speeds.

We had a Hyundai Sonata that was a very good car but it was noisy, rode like a buckboard and gave the same mileage.
Don't tell me Americans can't design or build a good car.

Subject: RE: BS: Still Government Motors...
From: mousethief
Date: 02 May 10 - 02:37 AM

You bought a Hyundai? No wonder you prefer Chevrolets.

But seriously go look at Consumer Reports' annual car issue, and see how cars are rated, [i]by their actual owners[/i], in such categories as reliability, ease of driving, cost of repair, yada, yada. It ain't Chevrolet on top of that list. Or in second. Or third. Or ...

Subject: RE: BS: Still Government Motors...
From: Q (Frank Staplin)
Date: 02 May 10 - 10:38 PM

Consumer Reports has had a number of idiotic reviews and ratings.
One will do better ignoring their picks.