My God. What have they done to General Motors?

July 30, 2010

I was the proud owner of a ’64 Impala for many, many years, and my family always bought GM. But… O, how the mighty have fallen! First they’re bought by the government, then they introduce the Volt, an all-electric car that costs only $41,000 and can take you a whopping 40 miles before it needs recharging! (Or switching to a gas engine that will pollute only a little bit…)

But now, the nadir. Where once auto shows had rock music and hawt babes to sell their cars, now GM gives us… this:

I wonder if they told those dancers they’d be performing to the eco-warrior’s theme from The New Zoo Review?

Poor GM.

(via Iowahawk)

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Race and gender at play in auto dealership closures?

July 22, 2010

Or was it payback for rural counties not voting for Obama in 2008? The BlogProf looks at the report by Troubled Asset Relief Program (TARP) Inspector General Neal Barofsky. It certainly seems … suggestive.

Hope and Change?

(via Sister Toldjah)

UPDATE: Ed at Hot Air takes a different angle, seeing the closures as an example of making economic decisions based on the needs of political theater, in this case the need to demonstrate shared sacrifice.


How GM did not pay back its loan

May 1, 2010

At Reason.TV, Nick Gillespie explains just how big a lie GM Chairman Ed Whitacre has been telling in those recent commercials in which he brags of paying off the company’s government loans early and in full:

Yes, GM and the Obama administration really do think we’re that stupid.


They really do think we’re that stupid

April 26, 2010

Late last week, I started seeing commercials from General Government Motors announcing to the world that GM had paid off its government loan – early and with interest. I thought that was good news, a sign that the company was recovering, jobs would be saved, and the government could unwind the majority ownership stake it had taken in the company.

Then the other shoe dropped and I realized we were being played for suckers:

Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn’t, the company, which couldn’t raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, “The GM Bailout: Paid Back in Full,” most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.

Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate–a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company–arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)

But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion–the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.

But wait! Even that’s not the full story given that GM, which has not yet broken even, much less turned a profit, can’t pay even this puny amount from its own earnings.

So how is it paying it?

As it turns out, the Obama administration put $13.4 billion of the aid money as “working capital” in an escrow account when the company was in bankruptcy. The company is using this escrow money–government money–to pay back the government loan.

In other words, they used their Visa to pay off their American (Taxpayer) Express. Pardon my language, but this is bullshit.

The American people are still bailing out a company that should have been allowed to go bankrupt, the US and Canada still own nearly three-fourths of the company, and not a dime has been repaid. All they did was move money from one pocket to the other.

And the worst part is that Treasury and their lackeys at GM think we’re such gullible children that we wouldn’t see this for the insulting con game it is.

Congratulations, guys, you’ve given us something else to remember in November.

LINKS: Sister Toldjah, Dan Mitchell, Hot Air, Fausta, Power Line (and here).

RELATED: Senator Grassley is not amused.


We don’t need no steenking bailout!

July 23, 2009

Unlike GM and Chrysler, Ford refused the crack turned down the federal bailout money. Unlike GM and Chrysler, Ford managed to adapt and stay out of bankruptcy court and didn’t need President Obama to rip off bondholders.

And, unlike GM and Chrysler, Ford has managed to turn a profit. Imagine that.

Helped by a lightened debt load, Ford Motor Co. posted a surprise second-quarter profit of $2.8 billion Thursday, following the worst loss in company history a year earlier. Shares rose more than 6 percent in morning trading.

The net profit ends a string of four straight quarterly losses for the nation’s second-largest automaker, which has gained U.S. market share at the expense of crosstown rivals Chrysler Group LLC and General Motors Co., both of which spent time under bankruptcy court supervision. Ford last went into the black in the first quarter of 2008, with net profit of $70 million.

However, excluding its debt reduction and other items, Dearborn, Mich.-based Ford would have reported a quarterly loss, though smaller than Wall Street expected.

Okay, so GAAP accounting rules helped create the profit. Ignore them. Even the smaller-than-expected loss is a good sign, often the first in a genuine turnaround.

It’s also a sign that sound business practices and making cars people want to buy is better than becoming Congressional Motors: