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...
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."
...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.... The General Accountability Office, on the other hand, remains deeply pessimistic. It concluded in a December report (which a more recent April report has said nothing to contradict, despite media spin to the contrary) that: "The Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies' values would have to grow substantially more than they have in the past."
Contrast that with the over $180 billion given to AIG to save the jobs of a few hundred whiny million-dollar-bonus-babies at AIG and Goldman Sachs who do nothing but deal cards in the casino and produce nothing of value.Where is that number coming from?
So if we spend our money buying Government Motors cars, maybe the company gets healthy, IPOs, making those lying executives rich, and maybe making the shares we own worth what we paid for 'em.Keep in mind that the management at GM is totally new, not the same guys who ran the company into the ground.
Where is that number coming from?
Facing sharp criticism on Capitol Hill, Treasury Secretary Geithner and his predecessor, Henry Paulson, on Wednesday defended their decision to complete a $182 billion bailout of American International Group Inc.posted by delmoi at 2:43 PM on May 1, 2010 [1 favorite]
It also has a nasty knock-on effect on the rest of the industry. The one good American car company, Ford, is being punished for doing a good job.If they're being "punished" why did they support the auto bailout? It wasn't all that clear that they were going to survive if the economy got worse, which would have happened if GM had gone down, it would have also killed their suppliers.
I'd say that's pretty goddamn clear evidence that the present management is not good at making cars people want to buy.What are you talking about? The current management has only been there for like a year and half, not long enough to have an impact on automotive design, which takes years.
Since I'm smart enough to look at Google Finance, and see the DJIA (and the more critical, IMO, Wilshire index) rebounding to pre-crash levels on Obama's watch, I'd say it's working out really fucking well.Working out well for who? Unemployment is still at 10%. If major corporations figured out how to squeeze higher productivity out of their workers by scaring them with the prospect of layoffs (or replace people with technology), how does that benefit the average non-stock-holding American? They're either working harder or unemployed.
I'd have been in total support of giving that money to the workers. $60 billion is $240,000 per employee.You mean loan $240,000 to each employee, with the expectation that they would pay it back in a few years? Because that's what we did with GM.
The US does not have a central bank, as other nations do. The Federal Reserve BANKS (emphasis on the plural) cannot be compelled to inflate our way out of debt, as their mission is to control inflation...Incorrect. Their job is to both control inflation and unemployment. They are failing.
NABE conducted the study by polling 68 of its members who work in economic roles at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act. (CNN)posted by tybeet at 6:59 AM on May 2, 2010
Major issues Forbes has supported include free trade, health savings accounts, and allowing people to opt out 75% of Social Security payroll taxes into Personal Retirement Accounts (PRAs). He supports traditional Republican Party policies such as downsizing government agencies to balance the budget, tough crime laws and support for the death penalty, and school vouchers, opposition to gun control and most government regulation of the environment, as well as drug legalization and same-sex marriage.[12] This last was despite his father's increasingly flamboyant gay lifestyle before his death. [13] In terms of foreign policy, he called for a "US not UN foreign policy" (which is composed of anti-IMF sentiments, pro-Israeli sentiment, opposition to Most Favored Nation status for the People's Republic of China, and anti-UN sentiment.) His flat tax plan has changed slightly. In 1996 he supported a flat tax of 17% on all personal and corporate earned income (unearned income such as capital gains, pensions, inheritance, and savings would be exempt.) However, he supported keeping the first $33,000 of income exempt. In 2000 he maintained the same plan, but instead of each person receiving an exemption of $33,000, it more closely resembled the Armey Plan (Forbes's version called for a $13,000 per adult and $5,000 per dependent deduction). Critics noted that Forbes stood to save substantial amounts in taxes if such a proposal was enacted. Forbes himself is quite wealthy, with an admitted net worth in 1996 of $430 million. Although Forbes publishes the list of the 400 wealthiest men and women in the U.S., Forbes conspicuously exempts himself from such disclosure. In response to this criticism, Forbes promised in his 2000 campaign to exempt himself from the benefits of the flat tax, although he did support the repeal of the 16th Amendment in a debate with Alan Keyes the previous year.
In his 2000 campaign, Forbes professed his support for social conservatism along with his supply-side economics. Despite holding opposite positions in 1996, for the 2000 campaign, Forbes announced he was adamantly opposed to abortion and supported prayer in public schools. The previous year Forbes had issued a statement saying he would no longer donate money to Princeton University due to its hiring of philosopher Peter Singer, who views personhood as being limited to 'sentient' beings and therefore considers some disabled people and all infants to lack this status. Steve Forbes was one of the signers of the Statement of Principles of Project for the New American Century (PNAC) on June 3, 1997.
"The hype does not match the reality. Taxpayers have not been repaid in full — far from it. ... Much of it will never be repaid," Grassley called it "an elaborate TARP money shuffle" amounting to "taking TARP money out of one account to pay back TARP loans in another account."Could someone tell me what GM has done wrong here? Is it wrong that they are retooling the plants? Is it wrong that they are paying back the loan? Is it wrong that there are going to be a lot more energy-efficient cars on the road? Is it wrong that there is going to be less use of oil and less greenhouse gas emissions in the US?
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Good explanation though.
posted by lampshade at 12:10 PM on May 1, 2010 [2 favorites]