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112 Comments
- Armor1901, on 11/16/2009, -7/+92Here come all the economic pros on Digg...
- seanmx, on 11/16/2009, -2/+55dont they have to like....start making money first?
- diggduggDOOM, on 11/16/2009, -2/+47So... they shouldn't repay the debt then?
- dlgsky, on 11/16/2009, -3/+44"Henderson said that GM may speed up its plans to pay back the government though, and that it could be done repaying its debt by June of 2010."
GM's math just doesn't seem to get any better... - l1tay2, on 11/16/2009, -2/+41I will believe this when the debt is payed off.
- sirbeta, on 11/16/2009, -3/+33Yes, Renian, lets needlessly force more people into unemployment.
- Scira, on 11/16/2009, -0/+29Has wallstreet paid off their loans yet?
- flammablewater, on 11/16/2009, -6/+34They're loss last quarter was only 1.15 Billion. Obviously, with numbers like that, they'll have no problem paying off their debts. This is the kind of business practices we've come to expect.
- fuzzynyanko, on 11/16/2009, -1/+26I think it should be let out that Toyota got a Japanese government bailout as well
- gobbleplex, on 11/16/2009, -1/+20"The government isn't known for innovation or creativity"
DARPA. - SkinnerBox, on 11/16/2009, -1/+18It's not like "the government" replaced all of the engineers and executives with bureaucrats from the DMV. They are a majority stakeholder with the same demands as any other stakeholder, profit and responsibility.
All of this "government-run" nonsense is just a semantic equivocation.
And not to be a stickler, but the government IS known for innovation and creativity at NASA and in the military. - kaelyiesta, on 11/16/2009, -1/+17Meh. The forced loan was of course bad and wrong, and I agree that selling off their infrastructure to other companies ready to use it better so that GM can pay back that loan is the best thing for everyone. However, if they do ever make a decent product and generally get their act together after the bankruptcy restructuring, I don't see any reason to avoid them. Reward good work by buying good products.
- bacon_skoda, on 11/16/2009, -0/+15NASA
- OverThere, on 11/16/2009, -2/+17No. They are using money we already gave them to pay off the debt. It's nothing but a publicity stunt in my mind.
"But in a move that could be controversial and risky, the car maker plans to use other money it received from the government to pay back the borrowing."
see:
http://online.wsj.com/article/SB200014240527487044 ... - Bartboy919, on 11/16/2009, -6/+20ITS ALL ABOUT THE AUSTRIAN SCHOOL OF ECONOMICS, DUHZ GUYZ.
- gbates31, on 11/16/2009, -0/+11GM was loaned a total of $50 billion and STILL went bankrupt. Their plan, as part of bankruptcy, is to repay only $10 billion of that original amount. There is no plan to repay the other $40 billion. People are really calling this success?
- SpeedSteamBoat, on 11/16/2009, -0/+10Uh, it was hardly "free."
GM is a completely different company than it was going into bankruptcy.
As they say:
General Motors Corporation is dead. Long live General Motors Company. - rrife, on 11/16/2009, -1/+10I thought I saw GM's CEO going into one of those payday loan advance places and walking out with $1B.
- regeya, on 11/16/2009, -2/+11Well, God forbid anyone loose any money.
- SpeedSteamBoat, on 11/16/2009, -0/+8@Renian: Good idea!
Oh wait, that already happened:
http://en.wikipedia.org/wiki/General_Motors_Chapte ...
Now what, smart ass? - Totalchaos02, on 11/16/2009, -3/+11If you'll read the article you will notice it talks about how the company is planning to repay it's debt, which would then mean that it wasn't free.
- briLo, on 11/16/2009, -5/+12There's speculation that allowing GM to fail would cost the US an additional 3,000,000 jobs and would cut around $150 billion in taxable revenue for the government.
The numbers come from GM's work force and companies that do nothing but provide material, parts and services to GM. I think if you let that happen, we're knee deep in a depression right now.
I'm sure there's a lot of things that happen that you don't condone but until you become a politician or a lobbyist, it's tough to be heard. - BoneStamp, on 11/16/2009, -0/+6GM repaid Germany $2.2B on Friday.
http://www.leftlanenews.com/gm-repays-germany-on-2 ... - KRG12345, on 11/16/2009, -3/+9*losing
- thavi, on 11/16/2009, -2/+8It'll never happen.
- martalli, on 11/16/2009, -1/+7This madness started with the Bush administration. They gave the first loans to GM.
- BoneStamp, on 11/16/2009, -2/+8You're right, they did have a 5% loss. But, "a loss of 5 cents on the dollar" is NOT the same as "selling its cars at 5% below the manufacturing cost." There are other costs that contribute to that loss, not just manufacturing costs. Don't do your own analysis next time.
http://www.businessdictionary.com/definition/manuf ... - SpeedSteamBoat, on 11/16/2009, -2/+8Actually, Toyota was hurting because the entire car market as a whole took a massive ***** the past few years. The Yen may have had a small part in their problems, but it can't hold a candle to the fact that they (like most auto companies) sold half as many cars in 2008 as they've averaged in past years.
And, no, it's not "up to the government" to turn GM around. The government does NOT own a controlling stake in General Motors Company (the new operational name of the automaker "General Motors").
What the US government bought was a controlling stake in the indebted assets of the old General Motors Corporation. Those assets were sheared from the presently operating company during the Chapter 11 bankruptcy process and are now being liquidated under the name Motors Liquidation Company, an entity which the US government has a 60% shareholding stake in.
General Motors Company (again, the new GM automaker who is still building cars) received a government loan (aka "bailout") which it is now attempting to pay back.
It's all relatively complicated, but the point is that GM cannot be "a taxpayer-funded money pit for decades" as you claim unless something drastically changes because GM is not currently government funded or controlled in any way outside having received a government loan.
If you want to know more you can read up on the bankruptcy proceedings here:
http://en.wikipedia.org/wiki/General_Motors_Chapte ... - FairDinkumMate, on 11/16/2009, -1/+6I think it should be let out that this is the first time Toyota has EVER made a loss.
- RuSTeDs, on 11/16/2009, -1/+6But what about the fact that Chrysler paid back its bailout money?
What about the fact that Morgan Stanley, American Express, US Bancorp, JP Morgan and Goldman Sachs paid back the loan or are in the process of paying it back?
http://dealbook.blogs.nytimes.com/2009/07/14/chrys ...
http://www.nytimes.com/2009/08/31/business/economy ... - ohplease, on 11/16/2009, -0/+4How do you make your money loose? Feed it cheap wine?
- pintomp3, on 11/16/2009, -0/+4A few firms have, but they still benefit from a government backstop so they continue to operate the roulette table.
- BESTenemy, on 11/16/2009, -4/+8 Right now GM is selling its cars at 5% below the manufacturing cost. It needs to raise the vehicle costs by roughly 15% to catch up and break even by 2015. Good luck with that. GM is losing $13,000,000 every single day; Monday through Sunday! They're taking the debt generated by the bailout, re-packaging it as bonds and re-selling it to investors. They're not making any money on cars, just shuffling paper around to make its bluff sound more legitimate.
Cash for clunkers supposedly helped them meet the bottom line, even though the number 1 brand handed in during the C4C run was GM and most cars bought in exchange were Toyotas and Hondas.
They are a welfare company for the UAW union - completely insolvent, kept alive though injections from the government. - BuzzFriendly, on 11/16/2009, -0/+4Oh the Bush administration was as bad as this one when it comes to spending money we don't have. Wars, prescription drug programs, new agencies etc etc etc. This administration is just a continuation of poor choices spending tax payer money.
- billrichards, on 11/16/2009, -1/+5Buy a Ford. $0 in bailout money
- bdbr, on 11/16/2009, -3/+7briLo's numbers (available from the Center for Automotive Research) are for all of the Detroit 3, not just GM. GM would be a significant portion of that, and the point still applies. Had GM been allowed to die, we (the remaining taxpayers) would have had to pay not only a considerable amount for unemployment, but also an additional yearly amount to make up for the loss of taxable revenue & lost income tax (of the laid-off employees). In fact, CAR estimates that enough US suppliers could have been put out of business that it would affect the supply of US-assembled foreign cars (at least for a few years), raising the prices of those as well.
Maybe BotchaMcCoola likes paying extra taxes just to make a point. I don't. - bdbr, on 11/16/2009, -1/+5"The government isn't known for innovation or creativity"
The government isn't designing or building any cars. - pinchduck, on 11/16/2009, -0/+4You make a good point. I would further add that the clunkers bill was a whorish giveaway to all manufacturers, not just GM. They should all pay the money back.
- SpeedSteamBoat, on 11/16/2009, -2/+6I think it should be let out that Toyota has received annual government subsidies from both Japan and the United States for decades.
They get a "bailout" every year. - Norse77, on 11/16/2009, -0/+3You get a car, you get a car and you get a car and you get a car......!
- erkokite, on 11/16/2009, -0/+3They're probably going to need to pay off the German government as well for their aid now that they aren't selling Opel to Magna.
- Thistlejack, on 11/16/2009, -0/+31) It's probably an indication they borrowed too much money. I don't see anything wrong with paying down the loan with money that was loaned to them. If you borrow $10 for lunch from someone, sometimes you give them the change and owe them $6.50, sometimes you keep the change and owe them $10.
2) GM may be able to borrow money from the private sector to pay back the government loans at a better rate with fewer strings. I can't imagine that having a government committee keeping an eye on everything they do is good for business. Said committee is more concerned about the political ramifications of GM's decisions than whether they are the right ones. There's been plenty of coverage of US Senators/Reps leaning on GM to close factories in someone else's state/district, rather than the factories that are losing the most money. - wilhoitm, on 11/16/2009, -0/+3Too bad it looks like even with the bailout no one could save Saturn!
- martalli, on 11/16/2009, -4/+7Clearly their money sense is completely off. They are going to repay their debt, even though they are still losing money... Shouldn't they be *making money* before they pay off their debt?
- bbjohnnyt, on 11/16/2009, -6/+9GM can NEVER be solvent without gov't assistance as long as their UAW union contracts keep sucking it dry.
- AndrewMoyer, on 11/16/2009, -1/+4In the car business, this is known as "funny money."
It's kinda like how the value of your trade-in depends on what you're going to buy. It's all just for show, so you feel like you are somewhat in control of the deal. - akhomestead, on 11/16/2009, -1/+4Fascism:
A merger of corporate power and government power
His admin comes from Wall street, he's given them billions on top of billions while raising taxes on the poorest (rolling tobacco)
No, he's a man of the people like he says he is. He would never lie to us, just look at that smile, he's all goodness.
http://www.youtube.com/watch?v=UErR7i2onW0 - BoneStamp, on 11/16/2009, -0/+35% below manufacturing cost? Sources needed.
- vault, on 11/16/2009, -1/+4If they made something reliable that I was interested in, I would still buy it. At least Ford is making the effort and has improved substantially.
- s73v3r, on 11/16/2009, -1/+4@BESTenemy: As the person making the claim, the onus is on you to back it up.
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