GM: Still $42 BILLION in the hole
#1
Lexus Fanatic
Thread Starter
iTrader: (20)
GM: Still $42 BILLION in the hole
so much for the touted success story of GM's bailout...
so even if it 'saved' 500,000 jobs, that's $84,000 a job!
http://freebeacon.com/gm-still-42b-in-the-hole/
so even if it 'saved' 500,000 jobs, that's $84,000 a job!
Despite President Barack Obama’s stories about a resurgent GM ready to repay its bailout tab, the automaker and its former bank still owe taxpayers nearly $42 billion, according to an inspector general’s report.
GM owes $27 billion on the nearly $50 billion it received from the auto bailout and Ally Bank, the company’s lending arm, owes $14.7 billion of the $17.2 billion taxpayer-funded bailout it received.
Obama has promoted the auto bailout as a success story, highlighting the manufacturing jobs it may have saved in swing states such as Ohio and Michigan.
“I refused to turn my back on a great industry and American workers. I bet on American workers. I bet on American manufacturing,” he said at a campaign rally in Oakland. “Three years later, the American auto industry has come roaring back.”
GM’s stock has plummeted in recent months after stagnant development in overseas markets. It hit a new low on Wednesday, falling to $18.80, a 52 percent drop from its January 2011 high of $38.90.
The rapid decline of the stock price has kept taxpayers on the hook for billions in unpaid bailout dollars. The stock would need to make a quick—and meteoric—turnaround for taxpayers to break even.
“In order to recoup its total investment in GM, Treasury will need to recover an additional $27 billion in proceeds. This translates to an average of $53.98 per share on its remaining common shares in New GM,” the IG report concluded.
The federal government has maintained a 32 percent ownership interest in GM, despite promises to sell off its shares after the November 2010 IPO. The administration has also maintained a controlling interest in Ally Financial, formerly known as GMAC.
The administration lost $2.9 billion on the Chrysler bailout, a black eye to Obama’s initial promise that all taxpayer dollars would be recovered. Selling shares in GM and Ally would lead to a multi-billion dollar loss for taxpayers and could damage the Obama campaign’s claim in a March campaign video that the ailing automaker had repaid its loans.
“Because of the tough choices the president made, the stage was set for a resurgent U.S. auto industry,” Tom Hanks said, narrating the 17-minute campaign video titled The Road We’ve Traveled. “With business booming, (GM and Chrysler) repaid their loans.”
Financial experts see the election-year creeping into the decision to hold on to the falling stock.
“Geithner and the rest of Treasury doesn’t want to admit that it is a mess and they’ve been lying to us for three years,” Christopher Whalen, cofounder of Institutional Risk Analytics, told the Washington Free Beaconin April. “They’re waiting until after the election.”
GM owes $27 billion on the nearly $50 billion it received from the auto bailout and Ally Bank, the company’s lending arm, owes $14.7 billion of the $17.2 billion taxpayer-funded bailout it received.
Obama has promoted the auto bailout as a success story, highlighting the manufacturing jobs it may have saved in swing states such as Ohio and Michigan.
“I refused to turn my back on a great industry and American workers. I bet on American workers. I bet on American manufacturing,” he said at a campaign rally in Oakland. “Three years later, the American auto industry has come roaring back.”
GM’s stock has plummeted in recent months after stagnant development in overseas markets. It hit a new low on Wednesday, falling to $18.80, a 52 percent drop from its January 2011 high of $38.90.
The rapid decline of the stock price has kept taxpayers on the hook for billions in unpaid bailout dollars. The stock would need to make a quick—and meteoric—turnaround for taxpayers to break even.
“In order to recoup its total investment in GM, Treasury will need to recover an additional $27 billion in proceeds. This translates to an average of $53.98 per share on its remaining common shares in New GM,” the IG report concluded.
The federal government has maintained a 32 percent ownership interest in GM, despite promises to sell off its shares after the November 2010 IPO. The administration has also maintained a controlling interest in Ally Financial, formerly known as GMAC.
The administration lost $2.9 billion on the Chrysler bailout, a black eye to Obama’s initial promise that all taxpayer dollars would be recovered. Selling shares in GM and Ally would lead to a multi-billion dollar loss for taxpayers and could damage the Obama campaign’s claim in a March campaign video that the ailing automaker had repaid its loans.
“Because of the tough choices the president made, the stage was set for a resurgent U.S. auto industry,” Tom Hanks said, narrating the 17-minute campaign video titled The Road We’ve Traveled. “With business booming, (GM and Chrysler) repaid their loans.”
Financial experts see the election-year creeping into the decision to hold on to the falling stock.
“Geithner and the rest of Treasury doesn’t want to admit that it is a mess and they’ve been lying to us for three years,” Christopher Whalen, cofounder of Institutional Risk Analytics, told the Washington Free Beaconin April. “They’re waiting until after the election.”
http://freebeacon.com/gm-still-42b-in-the-hole/
#5
Yup not a suprise at all. If obama thinks gm stock can go higher than what it is currently then he is in for some more pain, it's not going anywhere but down for the next four years, it might go up some if the next guy decides to bail gm out again but the next four years is the only thing Obama cares about. He is better off selling the stock now than risk taking another hair cut when the stock pummels again in the future.
Oh believe me gm is trying hard working their bean counters overtime to hide the losses every quarter as we speak but they can only sweep it under the rug for so long until things start to puff out.
All signs point to a bleak future for gm as I have done a research on this stock a while back and found some gloomy things to come.
https://www.clublexus.com/forums/car...f-trouble.html
Oh believe me gm is trying hard working their bean counters overtime to hide the losses every quarter as we speak but they can only sweep it under the rug for so long until things start to puff out.
All signs point to a bleak future for gm as I have done a research on this stock a while back and found some gloomy things to come.
https://www.clublexus.com/forums/car...f-trouble.html
#6
Lexus Test Driver
Everything that is wrong about democracy is right in those first couple sentences. Politicians fleece the American taxpayers of billions of dollars so they can hit the campaign trail talking about all the jobs they "saved".
GM's market cap is barely over the 27 billion outstanding in loans. This is your taxpayer dollars at work.
GM's market cap is barely over the 27 billion outstanding in loans. This is your taxpayer dollars at work.
#7
well GM is still profitable... but problem with GM is that they have not really changed... in fact, nothing has really changed except Chrysler which is under Fiat now. But Fiat is a lot like old Chrysler, just Italian.
But can we honestly say that we see some really big changes in Automotive industry since 2008? I dont think so.
A lot of it is really just an PR. That includes Toyota/Lexus/GM/Ford/VW/BMW/MB, etc, etc.
We all are suckers for PR.
But can we honestly say that we see some really big changes in Automotive industry since 2008? I dont think so.
A lot of it is really just an PR. That includes Toyota/Lexus/GM/Ford/VW/BMW/MB, etc, etc.
We all are suckers for PR.
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#8
Lexus Champion
This is why you have to let the free market decide. Sure, you can delay the inevitable by tossing public money at GM, but eventually they are going to have to pay the piper. Nothing has changed at General Motors, same lack luster products, average quality, stupid management, lack of a long term plan. All the things that made GM go bankrupt in the first place.
But don't worry the Chevy Volt will save the company, right?
But don't worry the Chevy Volt will save the company, right?
#10
Lexus Fanatic
I have to disagree with some of these posts.....and I've been watching GM for decades.
A lot has changed at GM. Several of you guys are overlooking the fact that the last few years (finally) have truly produced some excellent new GM products...Malibu, Sonic, Cruze, Silverado, CTS, and, of course, my favorite (Verano). All of these vehicles are vastly better, in many ways, than either the GM vehicles they replaced or those that were were in the market before them. Yes, better GM products were long overdue. Yes, the company has promised better products many times in the past...and then crapped out. Well, guess what? This time (and I've been watching them for 40 years), they're not crapping out.....they're delivering.
So...why are they delivering this time when they promised several times, in the past they would, and didn't? I think that, like Chrysler (who, BTW, is also delivering now, after repeated faliures in the past) it was them suffering the public humiliation of being once the world's largest automaker, losing the crown to Toyota (and possibly to VW), and then actually going bankrupt, after years of barely staying afloat. Bankrupcy, unlike past experiences, produced a real positive change at GM, something that, IMO, had eluded them for decades.
A lot has changed at GM. Several of you guys are overlooking the fact that the last few years (finally) have truly produced some excellent new GM products...Malibu, Sonic, Cruze, Silverado, CTS, and, of course, my favorite (Verano). All of these vehicles are vastly better, in many ways, than either the GM vehicles they replaced or those that were were in the market before them. Yes, better GM products were long overdue. Yes, the company has promised better products many times in the past...and then crapped out. Well, guess what? This time (and I've been watching them for 40 years), they're not crapping out.....they're delivering.
So...why are they delivering this time when they promised several times, in the past they would, and didn't? I think that, like Chrysler (who, BTW, is also delivering now, after repeated faliures in the past) it was them suffering the public humiliation of being once the world's largest automaker, losing the crown to Toyota (and possibly to VW), and then actually going bankrupt, after years of barely staying afloat. Bankrupcy, unlike past experiences, produced a real positive change at GM, something that, IMO, had eluded them for decades.
Last edited by mmarshall; 07-26-12 at 07:03 PM.
#12
Lexus Fanatic
But don't worry the Chevy Volt will save the company, right?
#13
Lexus Fanatic
No. Ford is indeed doing a good job in some areas, but, with a couple of exceptions, in the last couple of years, I've been more impressed with what I've seen from GM and Chrysler. Ford also messed up, IMO, with the MyTouch/SYNC systems, some of their new interiors, and with the Focus and Fiesta's twin-clutch automanuals.
#15
Lexus Champion
No. Ford is indeed doing a good job in some areas, but, with a couple of exceptions, in the last couple of years, I've been more impressed with what I've seen from GM and Chrysler. Ford also messed up, IMO, with the MyTouch/SYNC systems, some of their new interiors, and with the Focus and Fiesta's twin-clutch automanuals.
And whenever you introduce something truly new, you will have some teething pains. That is what Ford is going through right now.
Where is GM's or Chrysler's Touch/SYNC? Where is GM's or Chrysler's twin-clutch DSG transmission? Where is GM's or Chrysler's Active Park Assist automatic parallel parking? Where are GM's hybrid models -- what happened to the Dual Mode Hybrid that is in its trucks and was supposed to trickle down into the Saturn Vue Hybrid? Instead, we get this (very) mild hybrid in the Malibu and LaCrosse.
I expect to see some of these new technologies from Chrysler sooner rather than later as Fiat technology trickles down, but when can we expect to see some of this from GM?
Ford may be having some hiccups -- and paying the price as shown in JD Power surveys -- but it is aggressively bringing out new, imaginative, innovative technology and I have no doubt that the technology teething problems will be ironed out soon.