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I thought Obama became President so that he could become CEO of GM?
Speaking of GM, this piece paints a pretty damning picture of how GM has artificially inflated sales numbers by shipping cars to dealerships and booking them as sales leading up to the IPO.
Uncle Sam's pump and dump
So Uncle Sam gets to sell a good chunk of his shares at an artificially created high and boast about making a profit on those shares. After the IPO, sales will fall because dealerships have all that extra inventory to sell off.
I thought Obama became President so that he could become CEO of GM?
Mr. Obama would do well to put as much distance b/w himself and GM as possible.
GM is a success story. GM workers are his base. He should have the GM logo tattooed to his face.
Don't count your chickens before they hatch.
GM hasn't liquidated, is now profitable and is about to make a killing in the IPO (especially relative to where it could be).
I'd say enough chickens have hatched to call it a success story.
Page one of this thread made no impression on you?
If thats a success I'd like to see what you call a failure...
Let me summarize for you:
GM gets 60 BILLION from the US and Canadian governments.
GM gets an additional 45 BILLION in tax breaks
GM "gives back" 8.1 Billion of the original 60 billion borrowed.
Media outlets and idiots like DMX7 say..."SEE, GM paid all the money back!"
Media outlets and idiots like DMX7 say..."SEE, GM paid all the money back!"
Yay Obama! Yay Bailouts!
I seriously doubt that. The government will unload at a serious loss, otherwise investors will not risk buying the stock.
Remember the "loss-carryforwards" would have taken place regardess of the bailout, if the company had remained viable.
I would not include the $18.88bn as part of the "recoup" costs, since it was technically an "ordinary" cost to the government. Companies have bad years all the time, and the rules allow for them to carry-forward the losses as a credit against future profits.
It is, at the very least, not in a death spiral.
If thats a success I'd like to see what you call a failure...
Let me summarize for you:
GM gets 60 BILLION from the US and Canadian governments.
GM gets an additional 45 BILLION in tax breaks
GM "gives back" 8.1 Billion of the original 60 billion borrowed.
Media outlets and idiots like DMX7 say..."SEE, GM paid all the money back!"
What would the losses to the economy have been had GM been liquidated?
If we are to evaluate success, I would say spending $100bn to avoid even greater losses would cons ute "success", even if we got no return on the investment whatsoever.
The fact that we gained the benefit of avoiding a massive loss AND it gets "cheaper" as time goes by due to recovering funds is definitely a success, EVEN IF WE NEVER MAKE AN ACTUAL PROFIT.
That is the logical conclusion.
Any other conclusion is simply playing politics at the expense of common sense.
Except for the fact that the company did NOT remain viable and they wiped the "old" GM out. The investors (bondholders and stockholders) in the "old" GM were wiped out and THEY took the loss.
In this case, the loss gets deducted twice. It was literally a way for the US to give GM billions "under the table".
That sounds closer to what I remember reading. It is probably the source of that, I would guess.
Given that the amount of bids outnumbered available shares by some eight to one, I would say the price will approach that. I guess we will eventually get to see what the weighted average sale prices is after the Government is finished selling out.
Here's wishing us and GM good fortune in turning their company around.
They would have lost similar, if not more, had the company been liquidated.
The stockholders would have, in all likelihood been wiped out, and bondholders would have gotten pennies on the dollar.
Such costs can't be considered in comparing options, because they didn't really differ all that much between the bailout/non-bailout options.
Cost Accounting 101.
GM should have been broken up and sold. There is nothing "sacred" about GM.
The technology and brands had value and the company would have continued with private funding/investment in one form or fashion.
Using taxpayer money to subsidize a non-profit union endeavor is wrong.
This is a logical conclusion.
Any other conclusion is simply playing politics at the expense of common sense.
Fixed. At least admit your opinions are opinions, man.
You can't (or wouldn't without government collusion) have it both ways. Yeah, the bondholders would have been virtually wiped out and they would have deducted the loss on their investment from their current and future taxable income and carried the loss forward. Thats the same thing they did when "old" GM was dissolved.They would have lost similar, if not more, had the company been liquidated.
The stockholders would have, in all likelihood been wiped out, and bondholders would have gotten pennies on the dollar.
Such costs can't be considered in comparing options, because they didn't really differ all that much between the bailout/non-bailout options.
Cost Accounting 101.
BUT
"NEW" GM would not have been able to take the SAME loss because it already went to the wiped out investors in the bankruptcy.
Tax Accounting 101
So, in your OPINION, it is totally OK for GM ( now essentially owned by the United Auto workers) to not be accountable for repaying the 60 Billion dollars of taxpayer money that was dumped there plus get an additional 45 million of tax breaks...
and THEN...
be allowed to go out and compete head to head with Ford, which DIDN'T take tax dollars and DIDN'T get the same tax breaks? Not only that but FORD pays TAXES that politicians take and use to subsidize it's compe or...
How ing fair is THAT?
Another twisted GM Logic…Chevy dealers in So Cal would not participate in the “Cash for clunkers” program because they did not trust the government to reimburse them for the clunker trade ins…I mean how messed up is that…They plead for billions in bail outs & then claim that they are too good to participate in a government program intended to boost their sales…
Ford got plenty of play from the Gov that's not as sexy as a bailout (ie a Fed line of credit). Also they, like the rest of the industry, benefited mightily from the Cash for Clunkers program. They did turn down a bailout package, but that resulted in being saddled with some serious debt. They're making nice moves now to pay some of that down, but to say they are out of the woods is a bit premature, IMO. They are also playing some serious Wal*Mart style hardball with their suppliers.
What a bunch of garbage.
What was the impact to the economy when millions of people in construction, retail and financial sectors lost their jobs? Work at the mall? No biggie, the economy can sustain the loss of your job. Build homes? Not important. Work at the bank? Not important. Own a restaurant? Not important. Drive a truck? Not important. Fireman? Not important. Build cars? Holy ! We've got to do something!!!!!!!
By your "logic", shouldn't we have spent whatever amount it took to save all those other jobs? If not, please explain to the rest of us jobs in the auto manufacturing sector are the only jobs that the economy can not afford to lose.
Again using your "logic", it seems that the prudent thing for the government to have done was just tell every businesses in America that was losing money to just submit their financial statements to the government and their losses would be reimbursed at taxpayer expense. That would keep everyone employed, right? Doesn't matter if the taxpayers never get paid back because whatever we're losing certainly can't be any bigger than what the effect on the economy would be otherwise. Right?
This is a logical conclusion.
Any other conclusion is simply playing politics at the expense of common sense.
I dunno CG, I think Random has a point. If GM went down, they would've taken a huge chunk of suppliers with them. No suppliers = hard times for the rest of the automakers. Supply and demand is a .
Is the auto industry the only industry that deals with suppliers or has other jobs that are in some way related?
Of course not. But the multiplication effect would've been exponentially worse in the auto industry. There's only so many suppliers of OEM alternators, for example. The remainder of suppliers that weren't wiped out would be charging much, much more for what suddenly became a hot commodity.
Multiply this by every subassembly, widget, door handle...etc. Car companies are assemblers.
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