“I’m Ed Whitacre from General Motors. A lot of Americans didn’t agree with giving GM a second chance. Quite frankly, I can respect that. We want to make this a company all Americans can be proud of again. That’s why I’m here to announce we have repaid our government loan, in full, with interest, five years ahead of the original schedule. But there is still more to do. Our goal is to exceed every expectation you’ve set for us. We’re putting people back to work, designing, building, and selling the best cars and trucks in the world. … We invite you to take a look at the new GM.”
That’s a new commercial put out by General Motors featuring its CEO Ed Whitacre. Wow! Do I have egg on my face; because I was one of those Americans who didn’t agree with giving GM and its unions billions in bailouts? Ed respects that, and is working hard to regain my trust and pride in his company. Step one was to repay all that money with interest ahead of schedule. Now, he’s putting people back to work and invites me to take a look at the “new” GM.
OK, invitation accepted.
GM pushed this commercial and a press release in mid-April 2010 stating that they have repaid $5.8 billion in loans to the U.S. and Canada. One wonders how they did this since… they still aren’t making a profit. Well, it ends up they got the money from us. Yep, they repaid the TARP money; by using a different source of TARP money. So technically, they didn’t pay back the loan, in full, nor in part, nor even a red cent of it. They just played a shell game with American tax dollars.
Of course nobody is really sure how much GM owes us; $17.4 billion was put in an account at the Treasury Department.
That’s not including $50 billion we shelled out as an “investment” (not a loan, not to be paid back) to own 61% of the company. Great, we’re stake holders in a company that is burning through truck-loads of cash; but being turned around by dishonest management, Uncle Sam, and the United Autoworkers Union. So how do you think that “investment” is doing? If you were brave enough to look, there’s no way to know. GM is no longer a publicly traded company. That information is… private…
What we do know is that during the bailout, Obama stepped in and forced a bankruptcy deal where the unions, who owned a smaller percentage of the company, ended up with a bigger stake in the “new GM” than those who had put their faith, and cash into the company. Many of these investors (about a quarter of them) were small investors… everyday Americans depending on that money for retirement. This was nothing less that THEFT on the part of Obama, GM, and the Unions.
GM was then allowed to close a large percentage of its dealerships. These were dealerships (like a franchise) that had been bought and paid for by their owners. Some of these had been in families for generations. And for their trouble, the owners were given… nothing. This too was nothing less than THEFT by GM, with a wink and a nod from Obama.
So, after taking a look, we see there is no “new GM”. All we have here is the same old crap. A dinosaur of a company run by the same morally bankrupt management types, aided and abetted by corrupt politicians (the Obama administration), and Union bosses. They cut the throats of their investors and the American tax payers; before dividing up the spoils. Exactly how much respect do you think they will afford those who buy their products? You would be a fool to do business, or buy a product from such crooks and swindlers.
If held to any semblance of market forces, GM is doomed (and should be). It’s just a pity that we, the tax-payers, had to shell out tens of billions of dollars ($87 billion by Geithner’s estimates) to prologue the death throws.
— Much of this information for this blog was found on bnet (among other sources).
— The Houston Chronicle’s Loren Steffy was the source of information on the GM investors.
— The commercial/propaganda can be seen on You Tube… it was titled “Trust”.
GM simply handed back TARP money it hadn’t used. Like you said, the fed gov’t still owns a 61% stake in GM. And, since there’s no listed stock price… yeah. Whee.
Technically, this is repayment of a loan that was never used. It’s like inheriting a ton of money (TARP), then qualifying for a mortgage (TARP2), then not buying the house with that mortgage. I hardly find it praiseworthy.
The Congressional Budget Office says we’ll probably lose $34 billion from the auto-industry “investments” (including Chrysler), but they don’t break down how that splits out. I tried reading it, after reading your blog post.
I’d like to see GM do well. I really would. I have fond memories of Dad’s GMs, when that was the “manager’s car” (Ford was for blue collar guys). But I don’t see how they are on a path to do anything worth bragging about.
>> Congressional Budget Office says we’ll probably lose $34 billion
The same guys who have drastically miscalculated the cost of every government program they ever looked at; and say Obamacare will at worst be revenue neutral… If my theory is right, and GM still operates in any form for free market; then it is doomed and our loss will be the entire $87 billion (which was probably underestimated by Geithner).
>> I’d like to see GM do well. I really would.
Under the current circumstances; I don’t. If GM does well; then the major players, (Obama, Unions, & Corrupt Management) all liars and thieves, profit handsomely for their misdeeds. I can’t root for people like that. Yes, I feel sorry for the employees; the same way I felt sorry for Enron employees.
I worked for Enron for 10 years; and knew very early on that Ken Lay and upper Enron management were severely lacking in morality and integrity. One thing they had that helped them implement their fraud was a complacent media. Since Ken was in bed with the liberal city government and Mayor Bob Lanier; he shared a liberal agenda with the local Houston Chronicle. For this; the “newspaper” ignored all the crap going on behind closed doors; both his city and company business. I can’t help but think that this contributed to the degree of fraud Ken and his bunch tried to implement. Ken must have thought, “Daaaaamm! Bob and I are getting away with all this crap without even a peep from the paper or local news. I can do any dammed thing I want!
CEO Ed Whitacre has now proven himself to be of the same Enron-esque ilk. Since I’ve heard of no resignations in disgust; I assume his upper management is like minded. I already know the character of Obama and the Unions. Now with the three together; it’s easy to see who the villains are.
Yeah, I can see that point. If they’d truly sacrficed, re-org’d, and emerged better, it’d be different.