GM is currently running a commercial featuring their CEO, the aforementioned Mr. Whitacre, claiming that they have repaid their loan from the taxpayers, including interest 5 years early.
What he fails to mention is that they have actually returned only 13% of the loan as cash. The remainder is to be in stock. So, the taxpayers are now going to be the proud owners of a sizable portion of GM stock.
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. At first the entire amount of U.S. aid was considered a loan as the government tried to keep GM from going under and pulling the fragile economy into a depression.
But during bankruptcy, the U.S. government reduced the loan portion to $6.7 billion and converted the rest to company stock, while the Canadian governments held $1.4 billion in loans.
The automaker hopes to repay the remaining $45.3 billion to the U.S. government and $8.1 billion to Canada via a public stock offering, perhaps later this year. The U.S. government now owns 61 percent of the company and Canada owns roughly 12 percent.
They got cash, they should return cash!!
And the stock it to be in a future offering. It’s not even currently existing stock. The more shares that are issued, the less any individual share is worth. A company is worth only so much. You keep dividing that pie into more and more pieces, the pieces start getting awfully small.
Where did they get the money for this?
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.
This article doesn’t say this but Rush said these 65,000 workers also lost their pensions. Rush is not often wrong. No one in America is as fact-checked as Rush. He works hard to get it right so as to not give his detractors any ammunition to use against him. Thus, if he says it, it’s probably true.
According to Rush:
RUSH: There's a story out there, the automobile salesmen at General Motors, automobile salesmen at AP, an excited headline, breathlessly so: "GM Pays Back Government Loans from US, Canada." No, they didn't. Here, listen to the lede: "General Motors Co. has repaid $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." Now, if you only read the headline and the lead paragraph, you'd get the distinct impression that what? They paid it all back, right. You get the distinct impression that GM has fully repaid all the money they've gotten from the US and Canadian governments. Why would the AP want to mislead its readers like this? In fact, the General Motors outfit got a total of $61.5 billion from the US and Canada, but now it's shouted from the rooftop when they paid back a mere eight billion. That's what they've paid back. They have paid back a total of 13% of the government loan, and here the car salesman from the Associated Press report says they fully paid it back, which they have not. One thing that they don't point out here very stridently -- of course, leaving it to me who can read the stitches on the fastball -- they had the money to do this. Where did they get some of the eight billion to pay back? They did it by jettisoning 65,000 jobs, and the pensions that go with them, so they fired 65,000 people, got rid of their pensions and they said that they are paying it back. They haven't earned it. They're cutting and it's only because Obama owns the car companies along with the UAW that you can fire 65,000 union people.
GM Cuts 65,000 Jobs, Pretends to Pay Gov't Back
And don’t forget, Ed Whitacre was picked by Obama to run GM. He’s a government and Obama stooge through and through.
We hope to buy a car next year. It won’t be from GM, of that you can be sure!!