I had the same question...that's one heck of a turn around! Good sales trends, but wow, that was fast!
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GM pays back government loans from US, Canada
- Thread starter ubee
- Start date
I had the same question...that's one heck of a turn around! Good sales trends, but wow, that was fast!
mjkaliszak
New member
dcsnomo,
We are cool. I'm still in the " cooling off " period after paying taxes. When I have to stroke out a check to the US Treasury , things start to bother me.
We are cool. I'm still in the " cooling off " period after paying taxes. When I have to stroke out a check to the US Treasury , things start to bother me.
dcsnomo,
We are cool. I'm still in the " cooling off " period after paying taxes. When I have to stroke out a check to the US Treasury , things start to bother me.
Don't cool off too much it's unpatriotic, our founding fathers would be ashamed. You better watch this: http://www.youtube.com/watch?v=muHg86Mys7I
It was a bankruptcy, but not a traditional bankruptcy in that the executive branch had its hand deep in this. The regular creditors, who would have benefited more from a regular liquidation, were essentially forced to take a smaller than equitable payout. Then the the UAW got much more than it otherwise woud have. So yes, it was a bankruptcy, but if it was more of a traditional bankruptcy, the creditors would have gotten a much better deal and the taxpayers wouldn't have had to chip in anything.
highhertel
Member
Rob Peter to Pay Paul
GM used bailout money from a separate fund to repay the original bailout loan. Just like using a cash advance from one credit card to pay off the balance on another.
Just buy a Ford and screw GM!
HH
GM used bailout money from a separate fund to repay the original bailout loan. Just like using a cash advance from one credit card to pay off the balance on another.
Just buy a Ford and screw GM!
HH
anonomoose
New member
It was a bankruptcy, but not a traditional bankruptcy in that the executive branch had its hand deep in this. The regular creditors, who would have benefited more from a regular liquidation, were essentially forced to take a smaller than equitable payout. Then the the UAW got much more than it otherwise would have. So yes, it was a bankruptcy, but if it was more of a traditional bankruptcy, the creditors would have gotten a much better deal and the taxpayers wouldn't have had to chip in anything.
Actually the press did a poor job of explaining this. Truth is that had GM gone thru normal bankruptcy (if there ever is anything such as this) then the whole company would come to a halt, and the 10 thousand other companies that supply to GM, Chrysler, Honda, KIA, and every other maker of auto's in the USA, would not have been able to build cars and trucks either, and the auto biz in the USA would have ceased to exist.
This isn't just a pyramid; it is a multi tiered pyramid that feeds well beyond the auto business. I have read not long ago that somewhere between 3-4 million workers would have been affected by the shut downs.
When you add up the unemployment alone, this would have thrown a huge anchor on the government, never mind that we were teetering on the brink of total and complete financial collapse of not just our financial system, but effectively much of the world.
When you think about the long term consequences, this "bail-out" was not even something anyone could really consider NOT doing. So it was not so much to make the UAW happy, or keeping the car business going as it was to prevent the complete collapse of our financial system and putting our government under such a load that many speculate it could not have handled.
To a much smaller degree, AIG was believed to be in the same boat. But we should have NEVER EVER agreed to 100% return on the dollar for AIG as that has really put us all in a big bind and has truly bailed out every single bank in the country. Each time the bank forecloses on a home, and they waste away a chunk of the value by selling at 1/2 price or less, or do a short sale, they put a claim into AIG for 100% reimbursement of the loss and YOU and ME underwrite AIG in the claim. If we had agreed to 70 cents on the dollar, as many suggested we should do, the banks would have had to behave more responsibly and actually spent money on "their investments" and kept property values much higher than they are today.
harvest1121
Well-known member
That was a nice spin on how to keep the car business going if GM failed. If Gm failed the other car companies would of been fine supply and demand would of worked fine. There has been a 200 day supply of cars so they would of been fine. The suppliers still would of supplied everyone else. They would be glad to sell to someone that would pay. It really was a nice union spin on why the unions needed a bailout. I worked in the car business for a lot of years and the things gm and the unions got away with it would of been better to just start over like going bankrupt is suppose to do. Now it just prolongs the pain.
Sorry anonomoose not buying the socialist spin. I don't care how many people would have been laid off if you fail you fail.you don't think investors would have been lining up buying the scraps of a corrupt and poorly run corp Penny's on the dollar if they did not have to worry about legacy costs and unstable contracts.but what the F I guess that is why our founding fathers risked it all in the hopes that future generations could some how get this new land to run like the ones that they fled.BTW no one gave a ship about the 10s of 1000s of small biz that were affected with the housing bail out but that is prob just because most of them are self employed or subs who cant file for unemployment so it wont affect the numbers that the sheep see on the state run media every night
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G
G
Guest
This whole attitude of 'Too Big To Fail' has cost us untold billions. Whether it was AIG or GM or whoever. They screwed up - They should have failed - traditionally. Propping them up solves only short term employment issues. The whole purpose of government monetary policy right now seems to just be postponing the inevitable. Without Toyota's problems as of late GM would not have been paying anything back. Toyota will do what it takes to get back on track. Why would you change much at GM when it has already been shown that no matter how bad you screw up you will get to keep going because you are 'Too Big To Fail.' It is insane to reward failure.
Agree with the last three...it would have been better to let them fail and be liquidated. Someone would have bought what was worth buying out of liquidation. Taxpayers would not have been on the hook. Creditors would have gotten their fair share. Inept management would have been replaced. Uncompetitive contracts (including labor and property deals) would have been shredded. Ignore the scare tactics - people would still buy cars. Suppliers would still be building for those cars. Now, we have a propped up car company that still isn't fixed and that cost the taxpayers boatloads of money, probably for years to come. Plus, the brand has been damaged - how many people will no longer look at GM (or Chrysler for that matter)?
anonomoose
New member
You guys aren't thinking big enough. This issue was extremely clouded with lots of overburden that was not so easily cleared thru bankruptcy. I am not defending GM..they got what they deserved, and probably will never be the company they were because the board of directors took a mental vacation and didn't make the hard decisions that needed to be made leading up to the crunch.
But to illustrate, if you throw a few people out of work in your neighborhood and town, you can survive. People will buy their homes and life will move on.
If you throw 50% out of work, the town will drown in a self induced implosion.
No way around it. That is what and why GM was not allowed to fail.
If you think Honda and Toyota would have been better off with GM going belly up...then they would have kept their mouth closed, but they didn't and they sung loudly because they understood that the parts business kept THEM alive too. Without those companies around it was not like you could turn the spigot on or off at will...this takes time and they all took gas in the financial crunch...they didn't have cash...this put them all in a bind and if you let Chrysler and Gm blow away, the rest would have taken years to get back to ground zero. None of them had stock piles of cars and trucks enough to weather that type of storm.
This isn't about union...this is about poking holes in the huge circle of fabric we all need to sleep at night.
Believe what you want, but I finally got why they didn't just let them go down...I won't call it too big to fail, but I would call it stepping in a bear trap while trying to climb out of quicksand which our economy was flowing thru at the moment.
If we had NOT been in the financial melt down, I am not sure at all that the Government might have just said...let's see what happens! But we were and there was little choice to make there...pure and simple.
But to illustrate, if you throw a few people out of work in your neighborhood and town, you can survive. People will buy their homes and life will move on.
If you throw 50% out of work, the town will drown in a self induced implosion.
No way around it. That is what and why GM was not allowed to fail.
If you think Honda and Toyota would have been better off with GM going belly up...then they would have kept their mouth closed, but they didn't and they sung loudly because they understood that the parts business kept THEM alive too. Without those companies around it was not like you could turn the spigot on or off at will...this takes time and they all took gas in the financial crunch...they didn't have cash...this put them all in a bind and if you let Chrysler and Gm blow away, the rest would have taken years to get back to ground zero. None of them had stock piles of cars and trucks enough to weather that type of storm.
This isn't about union...this is about poking holes in the huge circle of fabric we all need to sleep at night.
Believe what you want, but I finally got why they didn't just let them go down...I won't call it too big to fail, but I would call it stepping in a bear trap while trying to climb out of quicksand which our economy was flowing thru at the moment.
If we had NOT been in the financial melt down, I am not sure at all that the Government might have just said...let's see what happens! But we were and there was little choice to make there...pure and simple.
Bait and switch?
US Senator Charles Grassley (R-IA) answers questions during the 2009 Reuters Washington Summit in Washington, October 19, 2009. REUTERS/Jonathan Ernst (UNITED STATES POLITICS)
A top Senate Republican on Thursday accused the Obama administration of misleading taxpayers about General Motors' loan repayment, saying the struggling auto giant was only able to repay its bailout money by dipping into a separate pot of bailout money.
Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout -- also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.
"It appears to be nothing more than an elaborate TARP money shuffle," Grassley, the ranking Republican on the Senate Finance Committee, said in a letter Thursday to Treasury Secretary Timothy Geithner.
GM announced Wednesday that it had paid back the $8.1 billion in loans it received from the U.S. and Canadian governments. Of that, $6.7 billion went to the U.S. treasury.
But Grassley said in his letter that a Securities and Exchange Commission form filed by GM showed that $6.7 billion of the tens of billions the company received was sitting in an escrow account and available to be used for repayment. He called on Geithner to provide more information about why the company was allowed to use bailout money to repay bailout money, and how much of the remaining escrow money GM would be allowed to keep.
"The bottom line seems to be that the TARP loans were 'repaid' with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials," he wrote.
Vice President Biden on Wednesday called the GM repayment a "huge accomplishment."
But Barofsky told Fox News that while it's "somewhat good news," there's a big catch.
"I think the one thing that a lot of people overlook with this is where they got the money to pay back the loan. And it isn't from earnings. ... It's actually from another pool of TARP money that they've already received," he said Wednesday. "I don't think we should exaggerate it too much. Remember that the source of this money is just other TARP money."
Barofsky told the Senate Finance Committee the same thing Tuesday, and said the main way for the federal government to earn money out of GM would be through "a liquidation of its ownership interest."
Grassley criticized this scenario in his letter.
"The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government's ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM. A debt-for-equity swap is not a repayment," he wrote.
US Senator Charles Grassley (R-IA) answers questions during the 2009 Reuters Washington Summit in Washington, October 19, 2009. REUTERS/Jonathan Ernst (UNITED STATES POLITICS)
A top Senate Republican on Thursday accused the Obama administration of misleading taxpayers about General Motors' loan repayment, saying the struggling auto giant was only able to repay its bailout money by dipping into a separate pot of bailout money.
Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout -- also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.
"It appears to be nothing more than an elaborate TARP money shuffle," Grassley, the ranking Republican on the Senate Finance Committee, said in a letter Thursday to Treasury Secretary Timothy Geithner.
GM announced Wednesday that it had paid back the $8.1 billion in loans it received from the U.S. and Canadian governments. Of that, $6.7 billion went to the U.S. treasury.
But Grassley said in his letter that a Securities and Exchange Commission form filed by GM showed that $6.7 billion of the tens of billions the company received was sitting in an escrow account and available to be used for repayment. He called on Geithner to provide more information about why the company was allowed to use bailout money to repay bailout money, and how much of the remaining escrow money GM would be allowed to keep.
"The bottom line seems to be that the TARP loans were 'repaid' with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials," he wrote.
Vice President Biden on Wednesday called the GM repayment a "huge accomplishment."
But Barofsky told Fox News that while it's "somewhat good news," there's a big catch.
"I think the one thing that a lot of people overlook with this is where they got the money to pay back the loan. And it isn't from earnings. ... It's actually from another pool of TARP money that they've already received," he said Wednesday. "I don't think we should exaggerate it too much. Remember that the source of this money is just other TARP money."
Barofsky told the Senate Finance Committee the same thing Tuesday, and said the main way for the federal government to earn money out of GM would be through "a liquidation of its ownership interest."
Grassley criticized this scenario in his letter.
"The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government's ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM. A debt-for-equity swap is not a repayment," he wrote.
harvest1121
Well-known member
Well maybe there is a tarp fund to pay the tarp fund to pay the tarp fund. Just makes me want to go out and buy a GM. They just must think people are dumb.
Well maybe there is a tarp fund to pay the tarp fund to pay the tarp fund. Just makes me want to go out and buy a GM. They just must think people are dumb.
well they are dumb and sheep will be sheep fat dumb and happy for the short run any ways.PS I LOVE the GOV of AZ