GM deception

[bga1]

I just saw an advertisement this weekend featuring the CEO of GM touting that GM has paid off it's debt to taxpayers 5 years early! Wow! How did they do that? I mean - jeepers they just reported another 4.5 billion loss this past quarter.

It turns out that they took from one pile of TARP money and paid off the loan in another area. Imagine that kind of deception from an organization overseen by our current administration!
Wonder if they might have cooked the books on health care too?

[UpnorthGo4]

As usual there is always more to the story when a member of the GopherHole Right Wing Conservative Extremist Club makes another post. Needless to say, they are not happy to see that the destruction of the U.S automoble industry (and by extension the United Auto Workers) is not going to happen despite their cheerleading for it.

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From Time Magazine:

(DETROIT) — General Motors Co. has repaid the $8.1 billion in loans it got from the U.S. and Canadian governments, a move its CEO says is a sign automaker is on the road to recovery.

GM CEO Whitacre will formally announce the loan paybacks Wednesday at the company's Fairfax Assembly Plant in Kansas City, Kansas, where he will also announce that GM is investing $257 million in that factory and the Detroit-Hamtramck plant, both of which will build the next generation of the midsize Chevrolet Malibu.
(See the best business deals of 2009.)

GM got a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as it went through bankruptcy protection last year. The U.S. considered as a loan $6.7 billion of the aid, while the Canadian governments held $1.4 billion in loans.

The U.S. government payments, made Tuesday, came five years ahead of schedule, and Whitacre said they are a sign that the automaker is on its way toward reducing government ownership of the company. The payments on the Canadian loans were also made Tuesday.
(See the worst business deals of 2009.)

GM hopes to repay the remaining $45.3 billion to the U.S. government and $8.1 billion to Canada, money it received in exchange for large stakes in the company. The U.S. government now owns 61% of the company and Canada owns roughly 12%. GM plans to repay both with a public stock offering, perhaps later this year.

"Nobody was happy that GM needed government loans — not the governments, not the taxpayers and, quite frankly, not the company," Whitacre wrote in an op-ed article that appeared on The Wall Street Journal's Web site Tuesday night. "We believe we can best thank the citizens of the U.S. and Canada by making sure that their investments are hard at work every day, building high quality, fuel-efficient vehicles."

The factory investments in Kansas and Michigan will not create any new jobs, but will preserve jobs at both plants. The Kansas plant, which employs 3,869 workers, also builds the midsize Buick LaCrosse luxury sedan. The Detroit-Hamtramck plant, which has 1,048 employees, now builds the Cadillac DTS and Buick Lucerne large sedans and is gearing up to make the Chevrolet Volt rechargeable electric car.

During the financial crisis that led to GM filing for bankruptcy protection last year, the automaker closed 14 factories and shed more than 65,000 blue-collar jobs in the U.S. through buyouts, early retirement offers and layoffs. The company now employs about 40,000 hourly workers in the U.S.

Preserving jobs at the two GM plants won't help the nation's unemployment picture, but it won't make it worse

[GoldenHerbs]

Extremist?? lmao, please turn off your tv, thanks.

[jamiche]

I just saw an advertisement this weekend featuring the CEO of GM touting that GM has paid off it's debt to taxpayers 5 years early! Wow! How did they do that? I mean - jeepers they just reported another 4.5 billion loss this past quarter.

It turns out that they took from one pile of TARP money and paid off the loan in another area. Imagine that kind of deception from an organization overseen by our current administration!
Wonder if they might have cooked the books on health care too?

It looks like it is going to play out like Citi in the next 12-24 months, beej. The first step was the repayment of the loan and then the gov't will sell its stake by a public offering. Like TARP, the American taxpayers will make a few bucks out of the deal and will get out of the banking and car businesses.

[bga1]

It looks like it is going to play out like Citi in the next 12-24 months, beej. The first step was the repayment of the loan and then the gov't will sell its stake by a public offering. Like TARP, the American taxpayers will make a few bucks out of the deal and will get out of the banking and car businesses.

Unlike the banking portion of TARP there is scarcely a chance that the taxpayers will recoup their investment in GM. The government will have to help GM through another 12-15 billion in obligations over the next three years in addition to the billions (as much as 50 bil) that the taxpayers have already put in. The GM deal was strictly a union payback and not a good investment. I hope the government does, however, get out of GM ASAP. I am not completely against certain bailouts and I think the banking portion of TARP had to be done. The government had no business being in the car business in a majority ownership position.

I hope you would agree that the announcement was deception.

[jamiche]

Unlike the banking portion of TARP there is scarcely a chance that the taxpayers will recoup their investment in GM. The government will have to help GM through another 12-15 billion in obligations over the next three years in addition to the billions (as much as 50 bil) that the taxpayers have already put in. The GM deal was strictly a union payback and not a good investment. I hope the government does, however, get out of GM ASAP. I am not completely against certain bailouts and I think the banking portion of TARP had to be done. The government had no business being in the car business in a majority ownership position.

I hope you would agree that the announcement was deception.

It wasn't a deception. They paid off the debt portion of the taxpayer investment.

As you recall, we agreed at the time that TARP was necessary and appropriate. Having said that, the wall st. houses and some of the banks were up to such shenanigans that I've reached the point where I would rather preserve some union jobs than fund the unconsionable activities of the bankers/brokers. Can you imagine being in a business where you are trying to screw your clients? Ridiculous.

[UpnorthGo4]

Beeg: "The GM deal was strictly a union payback and not a good investment."

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This kind of thinking is exactly why the Republican Party is doomed to continue to be a minority party. Most Americans consider an American-owned auto industry to be worth protecting from domination by foreign countries. This is another WIN for Obama.

Every other industrialized country in the world would have done the same thing as Obama. If Bush Jr. had taken this action with the same results as Obama, Republican Extremists everywhere would be crowing about it from the highest buildings.

It is time to say it. Republicans would rather see the U.S. economy go into an extreme and extended decline rather that see Obama succeed and get re-elected.

[Costa Rican Gopher]

Beeg: "The GM deal was strictly a union payback and not a good investment."

This kind of thinking is exactly why the Republican Party is doomed to continue to be a minority party. Most Americans consider an American-owned auto industry to be worth protecting from domination by foreign countries. This is another WIN for Obama.

I´m told ¨most Americans¨ today are forward thinking, pro-global economy types who understand the old fashioned idea of nationalism needs to be replaced? Personally, I think we should make buying US manaufactured goods as atractive as possible and try to get self sufficient ASAP. I usually get reemed by Dems for saying so though because it makes me what they call an ¨isolationalist¨. Now the Dems feel ¨America first¨ is the way to go? Confusing stuff.

[bga1]

I´m told ¨most Americans¨ today are forward thinking, pro-global economy types who understand the old fashioned idea of nationalism needs to be replaced? Personally, I think we should make buying US manaufactured goods as atractive as possible and try to get self sufficient ASAP. I usually get reemed by Dems for saying so though because it makes me what they call an ¨isolationalist¨. Now the Dems feel ¨America first¨ is the way to go? Confusing stuff.

Here's the difference Costa. He doesn't want to make the goods more attractive to buy, he prefers that you ultimately be forced to buy them at whatever the price is. 10% Vat payable at the counter please. Everyone gets the same color- green. BTW - while UpNorth was posting GM was busy sending parts of their business offshore - just like most all American businesses do. A share of the bailout money GM got went offshore.

UPNorth- Had GM went under- their volume would have been picked up in a heartbeat by all other competitors - nearly all of whom assemble their cars in the good old USA while importing components - just as GM does. The mission was clearly to save GM union employees who are grandfathered in to uncompetitive deals and have killed GMs ability to compete for years.

[ruralgopher]

UPNorth- Had GM went under- their volume would have been picked up in a heartbeat by all other competitors - nearly all of whom assemble their cars in the good old USA while importing components - just as GM does. The mission was clearly to save GM union employees who are grandfathered in to uncompetitive deals and have killed GMs ability to compete for years.

You can't blame this all on unions. GM built its empire on the backs of the union worker, you can't conveniently leave that part out. The problem was with GM leadership. They didn't respond to the market fast enough. If you want to bring unions into it then it is also GM leadership's fault for not forseeing the problems with the worker structure and addressing it earlier.

[bga1]

You can't blame this all on unions. GM built its empire on the backs of the union worker, you can't conveniently leave that part out. The problem was with GM leadership. They didn't respond to the market fast enough. If you want to bring unions into it then it is also GM leadership's fault for not forseeing the problems with the worker structure and addressing it earlier.

No doubt that the ownership lacked the foresight to deal with the eventual change in the competitive market. At one time they were making so much money that they were willing to agree to anything to keep the plants humming and churning out profits. When the profits ended the unions still wanted theirs. This relates to the problem with unions- when business is good they want raises and more benefits. When business is bad they still want raises and benefits.
They often attempt to hurt the very business that they work for. For example- they continued to push through more and more work rules reducing worker productivity.

Both sides are to blame- at the end of the day the stockholders were left holding the bag. However, the bailout was a clear payoff for union support of Obama.

[ruralgopher]

No doubt that the ownership lacked the foresight to deal with the eventual change in the competitive market. At one time they were making so much money that they were willing to agree to anything to keep the plants humming and churning out profits. When the profits ended the unions still wanted theirs. This relates to the problem with unions- when business is good they want raises and more benefits. When business is bad they still want raises and benefits.
They often attempt to hurt the very business that they work for. For example- they continued to push through more and more work rules reducing worker productivity.

Both sides are to blame- at the end of the day the stockholders were left holding the bag. However, the bailout was a clear payoff for union support of Obama.

I am not an overly pro-union guy, and I agree that they can be to singularly focused on particular issues, but it is the unions job to represent the worker, not neccessarily the best interest of the company. I think it is somewhat misguided, but it is what it is. Many industries and companies that have unions are not failing, despite global competition. If the Bailout was a union buyout than the TARP money was a wall street buyout, you can't have it both ways.

[bga1]

I am not an overly pro-union guy, and I agree that they can be to singularly focused on particular issues, but it is the unions job to represent the worker, not neccessarily the best interest of the company. I think it is somewhat misguided, but it is what it is. Many industries and companies that have unions are not failing, despite global competition. If the Bailout was a union buyout than the TARP money was a wall street buyout, you can't have it both ways.

Who said the TARP wasn't a Wall Street buy out? Not I. The difference between the TARP money that went to the banks and the baliout to the autos is simple. If the banks hadn't been bailed out we'd ahve had a financial meltdown of epic proportions. We may have been better long term for it but the next few years would have been really bad. The bank deal was a big help to Wall Street - without question- but it had a real role in saving consumers in a huge way. The bailout of GM and Chrysler did nothing of the sort-big, big difference.

[ruralgopher]

Who said the TARP wasn't a Wall Street buy out? Not I. The difference between the TARP money that went to the banks and the baliout to the autos is simple. If the banks hadn't been bailed out we'd ahve had a financial meltdown of epic proportions. We may have been better long term for it but the next few years would have been really bad. The bank deal was a big help to Wall Street - without question- but it had a real role in saving consumers in a huge way. The bailout of GM and Chrysler did nothing of the sort-big, big difference.

If you are going to provide the benefit of the doubt that w/o the TARP money we would've had a 'meltdown of epic proportions', then the same logic can be extended to the auto industry. I don't have statistics at hand but I'd bet that the economic effects of shutting down all the plants, all the suppliers to those plants, all the truckers that truck supplies to and product from those plants, and all the small business owners who have GM dealerships and the people they employ all around the country would have been devestating as well. You can't say one hypothetical situation is fact while completely dismissing the other one, unless it is the party line of course.

[bga1]

If you are going to provide the benefit of the doubt that w/o the TARP money we would've had a 'meltdown of epic proportions', then the same logic can be extended to the auto industry. I don't have statistics at hand but I'd bet that the economic effects of shutting down all the plants, all the suppliers to those plants, all the truckers that truck supplies to and product from those plants, and all the small business owners who have GM dealerships and the people they employ all around the country would have been devestating as well. You can't say one hypothetical situation is fact while completely dismissing the other one, unless it is the party line of course.

There would have been a lot of carnage, but there are a bunch of viable automakers that would have picked up the pieces of GM in an orderly bankruptcy. Banking is the backbone of the entire economy and every business and every consumer would have been affected negatively had the big banks and insurers gone down. Skip the party line garbage, discuss the facts.

[bigtenchamps1899]

I´m told ¨most Americans¨ today are forward thinking, pro-global economy types who understand the old fashioned idea of nationalism needs to be replaced? Personally, I think we should make buying US manaufactured goods as atractive as possible and try to get self sufficient ASAP. I usually get reemed by Dems for saying so though because it makes me what they call an ¨isolationalist¨. Now the Dems feel ¨America first¨ is the way to go? Confusing stuff.

Great post, agree 100%. Some people never tire of talking out of both sides of their mouth.

[ruralgopher]

There would have been a lot of carnage, but there are a bunch of viable automakers that would have picked up the pieces of GM in an orderly bankruptcy. Banking is the backbone of the entire economy and every business and every consumer would have been affected negatively had the big banks and insurers gone down. Skip the party line garbage, discuss the facts.

Kind of defensive, ay? We are discussing hypothetical if:then situations that did not happen. There aren't a lot of facts, just rhetoric and assumptions.

[tikited]

I am not an overly pro-union guy, and I agree that they can be to singularly focused on particular issues, but it is the unions job to represent the worker, not neccessarily the best interest of the company.

This isn't aimed at you, rural, by the way.

I am a pro-union guy and people tend to forget the unions helped make this country great. We have already seen what the superpower companies do to the workers time and time again when the unions are forced out. Are some unions too big? Yes. Do workers need them? Yes. Reckless to think the companies-workers-country would be better off without them. History people...

[Gopher4Life]

rural,

>>You can't blame this all on unions.<<

With auto makers "earning" upwards of $90 per hour plus benefits, a whole lot can be blamed on unions and the slime balls who negotiate with them.

>>GM built its empire on the backs of the union worker, you can't conveniently leave that part out.<<

"Built on the backs" of damn well-paid workers. Don't leave that part out.

The Dem party is built on favors to unions that cost the rest of America.

[ruralgopher]

rural,

>>You can't blame this all on unions.<<

With auto makers "earning" upwards of $90 per hour plus benefits, a whole lot can be blamed on unions and the slime balls who negotiate with them.

>>GM built its empire on the backs of the union worker, you can't conveniently leave that part out.<<

"Built on the backs" of damn well-paid workers. Don't leave that part out.

The Dem party is built on favors to unions that cost the rest of America.

So GM leadership has no fault? I never said that unions are free of blame, I simply stated that the union built GM to the power it was, to leave that out and place all the blame on the union when things go sour seems decietful, which we all know you are against. I never said anything about union salary, benefits, etc, but I will say that GM signed those deals, thereby placing 50% of the blame for the costs on GM.

If the Dem party was built by favors to the union, and in your opinion pretty much everything else that is wrong with America, out of curiosity what was the Republican party built on?

[Gopher4Life]

>>So GM leadership has no fault?<<

They're the slime balls I referred to.

>>...out of curiosity what was the Republican party built on?<<

Personal freedom, personal responsibility, free enterprise, limited federal government and modest taxation

[ruralgopher]

>>So GM leadership has no fault?<<

They're the slime balls I referred to.

>>...out of curiosity what was the Republican party built on?<<

Personal freedom, personal responsibility, free enterprise, limited federal government and modest taxation

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[Gopher4Life]

You asked about the GOP's foundation, not what it always stands for today.

Lest you forget, I'm down on both of these major parties as well as this two-party system that stifles alternative movements.

[ruralgopher]

You asked about the GOP's foundation, not what it always stands for today.

Lest you forget, I'm down on both of these major parties as well as this two-party system that stifles alternative movements.

So for the republican party you base your ideas on the supposed ideology of its foundation, but you do not offer the same leeway to the dem party (which, to refute your earlier claim, predates unions)?

[From the Barn]

Could you please provide a citation for your $90/hr plus benefits statistic. I doubt they were making $180k per year.

[From the Barn]

http://www.cbsnews.com/stories/2008/11/24/opinion/main4630103.shtml

Try $25/hr.

[ruralgopher]

http://www.cbsnews.com/stories/2008/11/24/opinion/main4630103.shtml

Try $25/hr.

How dare you, trying to cite the 'MSM'!!!

[Gopher4Life]

From the Barn,

Consider your source. CBS and New Republic? That's quite a tandem.

I didn't say their take home pay was $90 per hour. I didn't say that was their average salary either. I said auto workers can make upwards of $90 per hour. Frankly, even $60,000 plus benefits for assembly line work is questionable.

[Moonlight]

From the Barn,

Consider your source. CBS and New Republic? That's quite a tandem.

I didn't say their take home pay was $90 per hour. I didn't say that was their average salary either. I said auto workers can make upwards of $90 per hour. Frankly, even $60,000 plus benefits for assembly line work is questionable.
Good catch - have you thought about going into politics?

[Gopher4Life]

No. With so much personal integrity, I'd never fit in. ;)

There are reasons why auto companies go under and autos cost so much. Unreasonable union demands are a big part of the problem. So is spineless management.

[From the Barn]

From the Barn,

Consider your source. CBS and New Republic? That's quite a tandem.

I didn't say their take home pay was $90 per hour. I didn't say that was their average salary either. I said auto workers can make upwards of $90 per hour. Frankly, even $60,000 plus benefits for assembly line work is questionable.

If their take home pay was $90/hr their actual salary would be well over $200k /yr. You did say they made $90/hr which they don't.

If you don't like the previous sources try these:
http://www.usatoday.com/money/autos/2006-03-28-buyout-packages_x.htm
http://wiki.answers.com/Q/What_is_salary_for_united_auto_workers
http://www.msnbc.msn.com/id/23845495/

The only thing contradicting the 50-60k range was actually a now discredited article from...wait for it... the new york times! stating that they made $70/hr in total compensation.

It is fine that you think they don't make enough (surely you think teachers should make more) but don't lie and don't make things up.

[Gopher4Life]

Unionized auto workers are way overpaid considering comparable work elsewhere. If "upwards of $90/hour" was an exaggeration, here's my apology.