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23.77 billion dollars makes me want to vomit, tbh
23.77 billion dollars makes me want to vomit, tbh
lol CC
lol chevy volt
lol death squads
http://news.yahoo.com/gm-records-hig...123523501.html
GM North America earnings before interest and taxes more than tripled for the year to $7.19 billion on improved U.S. sales
http://www.businessweek.com/news/201...ke-longer.html
employees due to get up $7K profit-sharing bonuses.
corporate welfare still sucks.
Yeah you can definitely make your numbers look good when you dump your pension obligations on the taxpayers. Pay attention, dudes...
Now who would have ever have thought that you of all people would try to frame the accounting in such a way to make a labor benefit at fault.
I must say I am shocked.
lol a few days b4 this its australian arm, ask the aussie govt for a $100m bailout, so what does the govt do to save the industry....bends over and accepts to come up with the money...so far this year, they have contributed funds to toyota, ford and gm....now the other companies are also asking for a bailout....
when you have an expensive labour force, trade unions not bending over and making things more expensive and labour unaffordable to hire, buiding cars no one wants to buy...then you have no business in manufacturing...
Count the ripple effect of GM going under to its suppliers, add the cost of unemployment for all the workers, loss of future taxes, and, , there are all kinds of variables. A myopic look at tax breaks or share value is only a part of the analysis. I am glad that we saved the company and jobs. This Prez has done a ava lot better job than the last one.
GM Pays Less Tax Than Buffet’s Secretary; UAW Gets Bonuses
National Legal & Policy Center ^ | February 16, 2012 | Mark Modica
Posted on Thu Feb 16 2012 13:21:19 GMT-0600 (CST) by jazusamo
General Motors reported year end earnings figures today. The company made about $9 billion dollars in 2011. How much of its "fair share" is GM paying in taxes? Zero. In fact, from GM's financial report, they actually received a "benefit" of $110 million for the year. The UAW benefited as well, as they are set to receive $7,000 per worker in profit sharing bonuses.
The sweet tax deal GM receives was set up by the Obama Administration as the company was granted a multi-billion dollar tax credit for loss carry-overs when they exited their bankruptcy proceeding. Normally, the company would not have received the tax credit but the bankruptcy process was anything but normal. Creditors were put in the back of the line to protect UAW interests and tax code was changed so that GM could profit for years without paying its fair share in taxes. President Obama now campaigns on the perceived success at GM and any help he can give to the company will result in additional votes come November. As taxpayers lose out, GM profits and shares the wealth with the politically favored UAW.
Despite all the claims of sacrifices at the UAW, members continue to benefit as evidenced by the $7,000 profit sharing checks they will receive as a result of the wealth redistribution scheme orchestrated by the Obama Administration. Executives at GM seem to be doing pretty well also as they receive millions of dollars in stock options. For their part, the UAW has agreed to strongly support the President come election time. And the hypocrisy of GM's tax deal is obvious as Obama makes claims that corporations need to pay their fair share. Crony corporations like GM and General Electric (which also is known to avoid taxes) are conveniently left out of the criticisms. Also on the favored list are wealthy purchasers of Chevy Volts who receive federal tax credits of $7500 to buy the cars. President Obama wants the rich buyers to have even more wealth redistributed to them in the form of higher credits, which he reportedly wants to raise to $10,000.
The GM earnings report seems to be getting favorable reviews as the share price rose on the news. Considering the $50 billion that taxpayers forked over to bailout GM along with the sweet tax deal, it is understandable that the company seems to be on the road to recovery. There was some evidence of roadblocks, however, as European woes surfaced and pension obligations rose to over $25 billion. Government Motors has recently announced that non-union salaried employees will have their pensions frozen. The company also is looking in to cutting white collar workers. It seems that the goal of job creation and preservation at GM only applies to union workers.
I can not fault the individual UAW workers at GM for benefiting from the political actions of the Obama Administration and GM. I'm sure many of them are hard working individuals. The problem is, most of the rest of us do not have the benefit of belonging to politically favored unions. Non-union taxpayers are picking up the tab for those favored classes that help with President Obama's election campaign. And that's just not "fair."
^ Perhaps Mark should join an union if he feels underrepresented...
What a bunch of garbage. We spent $50 billion dollars (not including GM's special tax breaks) bailing out a company that's currently employing less than 80,000 Americans. That's $625,000 per direct GM job. Divide that number by 5 or 10 if you're worried about the ripple effect and you still end up at a number that costs taxpayers a of a lot more than unemployment benefits do.
2 out of 3 GM employees work in a country other than the United States. 2 out of 3 cars GM builds get built on a continent other than North America. A bunch of the cars that get built in north america get built in Mexico or Canada, but for some reason GM doesn't tell anyone how many in their quarterly reports.
Last edited by coyotes_geek; 02-17-2012 at 10:03 AM.
lol National Legal & Policy Center
that almost as good as saying that Fox News prime newscast is impartial.
Mark Modica whines like a spurned lover. He's a former manager of a defunct Saturn dealership.
http://online.wsj.com/article/SB1000...149103202.htmlThe tax benefit stems from so-called tax-loss carry-forwards and other provisions, which allow companies to use losses in prior years and costs related to pensions and other expenses to shield profits from U.S. taxes for up to 20 years. In GM's case, the losses stem from years prior to when GM entered bankruptcy.
Usually, companies that undergo a significant change in ownership risk having major restrictions put on their tax benefits. The U.S. bailout of GM, in which the Treasury took a 61% stake in the company, ordinarily would have resulted in GM having such limits put on its tax benefits, according to tax experts.
But the federal government, in a little-noticed ruling last year, decided that companies that received U.S. bailout money under the Troubled Asset Relief Program won't fall under that rule.
Neal Boudette discusses GM's IPO plans, which will raise up to $10 billion and cut the government's stake to below 50%.
"The Internal Revenue Service has decided that the government's involvement with these companies, both its acquisitions plus its disposals of their stock, means they should be exempt" from the rule, said Robert Willens, a New York tax consultant who advises investment banks and hedge funds.
The government's rationale, said people familiar with the situation, is that the profit-shielding tax credit makes the bailed-out companies more attractive to investors, and that the value of the benefit is greater than the lost tax payments, especially since the tax payments would not exist if the companies fail.
1) There's nothing that suggests that GM shouldn't have gotten its tax-credit -- just that DIPs who undergo significant changes in ownership during the bankruptcy process have their carry-forwards restricted.
2) I'd be curious to hear a response to the rationale why -- in this case -- GM should have lost its tax credit
3) As for the UAW/Creditors claim - I'd be interested to see something substantive on that point. I tried looking and couldn't find anything. I'd also be curious to know who these creditors were? Were they secured or unsecured? Were they owed some sort of priority under the code? Were they just simple bondholders?
Last edited by vy65; 02-17-2012 at 11:09 AM.
Industry Insiders And Reporters Slam Romney’s Auto Rescue Editorial As ‘Reckless,’ ‘Dishonest,’ And ‘Pure Fantasy’
As the Republican presidential nominating contest moves to Michigan, former Massachusetts Gov. Mitt Romney (R) is touting his ties to the state — he was born there and his father is a former governor — and its auto industry. Romney wrote an editorial early this week re-upping his opposition to the 2009 auto rescue that saved Chrysler and General Motors, a sequel to the editorial outlining his original opposition, led “Let Detroit Go Bankrupt.”
The response to the editorial probably hasn’t gone as Romney hoped. Since it ran in the Detroit News Tuesday, auto industry insiders have repeatedly slammed it as “reckless,” “dishonest,” and “wrong,” noting that Romney either mistakes or ignores some of the basic facts surrounding the rescue. ThinkProgress compiled a sample of the reactions to Romney’s latest view of the rescue:
AutoNation CEO Mike Jackson: As far as Mitt piece in yesterday’s Detroit News it was truly reckless, detached from reality, and dishonest. … Mitt’s assertion that private financing “DIP” was available in fall of ’08 into ’09 is fantasy. Everyone knows we were in the midst of the greatest financial meltdown since the 1930’s. … The catastrophe in ’08 was so calamitous that government actions were necessary to avoid a great depression. Sometimes reality trumps principle and a courageous leader will understand that and will take the leap even when it is dramatically unpopular.
Yahoo! Autos reporter Justin Hyde: “Romney’s take just doesn’t square with the facts as I lived them. … Had the government not intervened as Romney suggests, GM and Chrysler likely would have been liquidated by their Wall Street bondholders. … One auto industry think tank estimated doing so would have led to 1.3 million job losses and threatened Ford, Toyota and other automakers.”
Reuters columnist Paul Ingrassia: “The government bailout was the only way to save GM and Chrysler, and thus was a critical element in preventing the Great Recession from morphing into Great Depression II. … The only alternative to a government bailout was the outright liquidation of both companies. Maybe the U.S. economy could have survived that blow, but maybe not. What’s clear is that it would have been foolhardy to find out.”
The Economist: “The course Mr Romney recommended in 2008 began with the government stepping back, and it is unlikely things would’ve turned out so well had this happened. … The credit markets were bone-dry, making the privately financed bankruptcy that Mr Romney favoured improbable. He conveniently ignores this bit of history in claiming to have been right all along.”
Romney’s view of the bailout isn’t even popular among his best friends in Michigan. Gov. Rick Snyder (R), who endorsed Romney yesterday, chastised Republicans who continue to criticize the bailout last November. “I would have had some differences on how they did it, but I’m not going to second-guess it,” Snyder told the New York Times. “The more important thing is the results. And the auto industry is doing very well today.”
http://thinkprogress.org/economy/201...-romney-autos/
boom
I remain willing to give this idea a chance, just as I did at the time.
My reasons are these:
1.It is undeniable that if the American auto companies would have been allowed to just go under and get liquidated, it would have cost far more than the 80,000 or so jobs in the direct companies involved. The enormous ripple effect on smaller 'feed' manufacturers all over the U.S. was said to number almost a million. We were already out millions of jobs when this bailout occurred, after the financial collapse.
Thus, the most severe recession since the 1930's would have been even harder to get out of, and we don't know how hard it would have been.
2.The money for this bailout was a fraction of the financial bailout of financial firms. If it was proper to bail out the financial industry to keep the country from going into recession, I'm not sure how it was inappropriate to use some of the TARP money to bail out another industry, i.e. manufacturing.
2. Unlike the government intervention of the financial ins utions, this bailout was accompanied by direct governmental control, including forced bankruptcy. None of the financial ins utions, other than Lehman, were forced to go into bankruptcy. The forced bankruptcy was critical to the recovery of these auto companies because it allowed them to get some of the most worrisome obligations off the books, including some to unions. Moreover, the head honchos of these firms were canned by the government, unlike the financial ins utions. Government appointed the CEO of GM, and the Board was ruled by Government appointees. None of that happened in the financial sector.
3. There is still a chance that the government may be able to come out of this whole in terms of money. While GM's stock price would have to double from where it is now, that may still happen. I see no such hope for recovery from the financial bailout.
I guess, in general, it seems to me that if anthing is going to be accepted as appropriate for bailout, this industry was no worse than the financial bailout.
If you believe that ALL of these firms should have been left to die, (financial and manufacturing) then that position is at least consistent. But the result of allowing those things would not have been zero cost to the taxpayer. It would have been hugely costly to pay for all of the unemployment, and the loss of tax revenues would have been considerably more significant than it has been to date.
I just don't accept that this is as black and white as some herein suggest.
Subtract any money back. Subtract out the time value of money for all the future periods for all the collateral damage, and cessation of operations.
Divide it by 5 to be conservative.
I think we got a bargain. It would not surprise me if the NPV were in the taxpayers favor, based on what I know.
NPV FTW.
GM bailout cost, at current stock price, $13Bn, according to the rabidly anti-Obama website:
http://www.bailoutcost.com/
Let's start gathering some other data on returns on investment. All of this would have to pass through a time value of money filter, but we are close enough in time to make some good, back of the envelope calculations.
GM 2010 income tax expense:
$672,000,000
Subtract that from the $13Bn, as this benefit to the taxpayer has now been realized.
We would also have to figure out the tax revenue from all the employees, add in the avoided unemployment benefits, as well as the "ripple effect" job, like dealerships etc.
FWIW, GM's PEG is .46
http://finance.yahoo.com/q/ks?s=GM+Key+Statistics
http://www.investopedia.com/articles...#axzz1n4CJcBig
That is remarkably good. Less than 1 = good.
Less than .5 = most projections place it as likely to go up by quite a bit over the next 5 years.
I wonder what the dorkwads at bailoutcost.com will do if the stock makes it above water.
My guess is they will take it down, but I think I will keep track of it. It will be funny if/when it breaks even.
The rabidly anti-Obama Treasury Department puts the cost at $23B or so.
http://www.detroitnews.com/article/20120130/AUTO01/201300393/Treasury-ups-auto-bailout-loss-estimate?odyssey=mod|newswell|text|FRONTPAGE|s
Considering that most of GM's profit is from trucks and SUV's they are TERRIBLY positioned for $5 gas. Ford is killing them on large vehicle power/vs gas mileage and Chevy isn't bringing out their planned fuel efficient new motor till 2015.
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