GM payback
 

It was in the KC news today that GM has repaid the $8.1 billion loan from the government - five years early. GM will be retooling the local plant to produce the next generation of Malibu. With that news, I would expect that the value of the stock the feds still hold in GM increased in value as well.

Regards,

D-Ray

They have a commercial about it - saw it this afternoon. Glad they paid it back. I'm guessing we'll get all the bail out money back with interest. Won't prevent people from yelling about bailouts over and over moving forward.

That's ashame. They should have all lost their jobs and collected from social programs until they had to turn to crime to survive. Can I get an amen sister sarah!

The new CEO (can't remember his name) is a pure business guy, not an automotive guy. He came from AT&T. Since he took over he has been kicking some serious ass, a real zero tolerance, failure is not an option type guy. In some cases he has found new people for key positions three times since he took control.

I'm delighted that they've paid the loan back so early. This way all the Wing Nuts can't say that the gummint "owns GM".

I take that back. It was never true. The loan was the "evidence" they pointed to but I'm sure they'll continue to say it anyway.

By the way, the new Fiat-owned Chrysler showed a modest profit last quarter. Things are looking up despite Obama's best efforts to destroy the country. ;)

John

I always liked your posts john, this is just another example.;)

One correction, however, John. The Feds do still own GM, with 61% of the stock. Only the loan was paid back, not the investment. I'm not sure how the ownership share will be recovered by GM.

Regards,

D-Ray

When the Feds decide to sell their stock. They have to sell judiciously in order to not depress the share price by flooding the market with GM shares. The Federal gov't. actually stands to make money on the GM bailout. How about that? Save jobs and the domestic auto industry and make a few shekels for the treasury in the process. The Wingnuts are likely shittin' themselves.

It all sounds very stimulating to me.

On the other hand, I wouldn't be surprised to see Wall Street try to Punish Obama for pushing financial reform. I'm sure some in the industry who could bring down the market if they wanted to.

Regards,

D-Ray

Yes, just like they did when they bailed Chrysler out all those years ago.

John

Talked to my brother John yesterday. He is a retired GM engineer. It seems that despite the good news, he and all salaried retirees but top echelon execs (Of course), have lost their pensions and retiree health benefits. His pension now comes from PBGC and he pays a percentage (Didn't say what % that is.) of his health bennies, the rest is subsidized by---the IRS.

So, guess what? Despite the good news, GM did manage to dump it's salaried pensioners off on the taxpayer after all.

Now, my Brother Ed, who is a retired Union guy still gets his pension and health benefits, but they are no longer paid by GM. The UAW has been forced, by the federal government, to pick up that tab. It is not known how long the UAW can bear this financial burden before they go broke. Or what will happen when that occurs. My guess is that all of the retired hourly guys will end up on the public dole as well.

The net effect is that the company has shed all retirement obligations for everyone except executive level employees. And that the government has helped them pretty much crush the UAW.

I tried to explain this to a wing-nut coworker today, and he said; "Bullshit. A guy on Limbaughs show said those fuckers are trying to get a 13% increase this year and we're paying for it."

Where does it end? (The "it" being the absolute rubbish being spewed by people like Limbaugh, BTW.)

Dave

But, at least the money is being repaid. And perhaps GM, now relieved of those burdens will regain some of it's former greatness in the market place. Hopefully there will never be another bailout.

We shall see.

Dave

They paid back bailout money with bailout money. Whats to be happy about..

All the jobs that were saved. :o

Well there is one good thing, recent polls show that people are now thinking that American cars are better than Asian cars. Some of us knew that all along.

I thought on the last contract the automakers gave the UAW a big chunk of cash and the UAW took over the pension funding.

The new hires get a lot less than the oldtimers.

Pete

Correct. A whole lot less.

Oh no, they'll say it anyway. Reality never has any bearing on their rhetoric. Government run health insurance sound familiar?

So they don't own 61%?

Pete

Yes, they do. So what? If GM recovers and returns to profitability, (And I believe they will.) then earnings from stocks held goes into the government coffers. Bailout money returned + a share of any future profits.

Is there a problem with that?

I don't think so.

Oh, I know, "Shoulda let them fail. Should have just let everything fail.".

And people want to vote for MORE of that twisted mentality in November?

God, help us all.

Dave

Making money on stocks is good for this, but not ss?

I never thought GM should fail.

Pete

I'm not a financial expert and couldn't begin to tell you all the things that will have to happen before GM is completely free from the government intervention. That's a subject for something far more researched than I'm willing to make a post on a web site.

But I believe the answer to your question is "Yes...but". Far as I know, the government became the majority holder in the company as part of the deal going into chapter 11. I don't think anything has changed in that regard. As I understand it, the "new GM" will at some point have to offer an IPO at which time the would hope to secure enough investment to offset the government investment. Wow, I'm not even sure I can say that right. That hasn't happened yet, but it doesn't diminish the fact that they are doing better than anyone expected. You can talk about taking TARP money to pay the bailout money, but fact is, they got it done years before anyone thought they would. It's money- they had the TARP and they had the loan. Now they just have the TARP. What line you account it on doesn't matter. If they didn't have they money they'd still be under both. Now they're only under one.

I don't know if that made any sense at all, or if I understand this at all. But that's what I think I know about it. Feel free to correct me.

Until and unless Wall Street is reformed playing the stock market is a great way for the average Joe to lose his shirt.

Eddie, I have NO idea. My gut says, Rob, you're right, but all I have is my 401k :(

It's good to see GM doing better. The new Malibu looks nice, reviews well, and hopefully will offset the Cobalts' bad rep.

The Buick sport-ute looks mighty fine too.

Pete

But none of them can hold a candle to a Lincoln, right.;)

Regards,

D-Ray

You and me, both, Pete. 401k is all we've got. So, I keep pumping money into mine and praying that no one, from either government or Wall Street decides they need that money more than I do.:o

Dave

Well Leland did leave Cadillac and started Lincoln - he had to keep moving upward :D

Springs tomorrow, if I'm not around Monday you know why :eek:

Next time, I'm signing a note!

Pete

Me too bro, but I get this sinking feeling!

Pete

Now that the $CDN is at parity it is like getting a raise.

That's what all those redneck Republican senators with non-union Toyota or Mercedes plants in their states wanted. They even said so.

John

There's no relationship between the two. With GM the risk is borne by the federal government as a whole but with Social Security the risk would be to individual retirees whose income could disappear overnight.

John

SS isn't backed by the Government?

Pete

Sorry to break this to ya Pete, but spring started a month ago.

Oops, just remembered you're going to tackle the Lincoln's suspension tomorrow. Good luck with that.

Regards,

D-Ray

Yes, Social Security is backed by the government. Shares in GM are not.

John

And who backs the gooberment ? We do. I say we stop letting these pricks pay us back with our own money.

Hell, I've even payed off one credit card with another. I even borrowed 50K (minimum to get 5%) from the bank and payed them back 20K a week later.

Tell me I ain't a smart money guy!!!

The new GM commercial with the prez strutting through the GM plant like a stud duck is enough to make me puke. It's a shell game.

Chas

The way the talking heads described it, GM used a Visa to pay off the Mastercard.

Look at it this way, they had a loan just in case, be glad they did not need it and so they gave it back. better our own automobile company than some effing asian thieves.

From what I've heard, not only are they 'paying back' the government with govenment money, they're doing it to look better for another bigger cheaper government loan.

If true this would be the biggest lie we've swallowed since ss was 'fixed'. I await further information.

Pete

Funny, it is a bad thing for the gummint to help GM, but it is a good thing for all those states to give land and tax breaks to foreign auto makers.:confused: