GM Bailout Looking like a win for Obama

[asterism]

No, government short circuited their claims in bankruptcy court by wiping out their stake without due process.

And when that happens, those companies close or reorganize. So GM had it both ways.

Not the same as losing money in the stock market.

Now they set up a brand new subprime lender to offer lease deals on Volt nobody else can touch.

Don't embarass yourself by claiming the market worked, or is now working for GM.

Funny thing is that the government and the UAW need tax breaks for this one businesses to keep it viable, while denying that tax cuts for business would help the economy.

And Progressives buy that line of bullshit.

 

[Annie]

GM's IPO: Suckers, Found! - Newsweek

GM's IPO: Suckers, Found!
The ten warning signs they ignored.
by Mickey KausNovember 19, 2010

...

I didn't think GM could pull off their IPO, but they did. It's especially impressive, in a better-than-expected kind of way, that government has reduced its stake to less than 30%.* (That $45 billion tax subsidy was just a gift, really. We don't want any stock for that.) Kausfiles has two official fallback positions:

1) Suckers: GM found a lot of them, even though a) by its own admission, it lacks "effective internal controls" over its finances; b) it's still saddled with the UAW, which is already pledging 'no more concessions' and even making some trouble; c) its Opel subsidiary is hemorhaging money at a rate of billions a year; d) a high Opel official declared the IPO "premature" while noting that "there is still too much red tape and inefficiency;" e) it has surrendered a majority stake in its promising Chinese joint venture to its Chinese partner f) its bailout plan assumes it will maintain a market share of 19 percent, but its share most recently fell to 18.3 percent, part of a decades-long decline; g) who knows what accounting gimmickry was used to dress up the books; h) the government has intervened in GM's decisionmaking more than it's let on; i) we don't know if GM's new products (like the Chevrolet Cruze) will have traditional GM reliability--the company better hope not; and j) the name "General Motors' is now so tarnished that the company is removing it from auto show displays, hoping buyers will not associate "Buick" or "Chevrolet" with such a negative brand .... P.S.: GM stock purchasers won't be suckers, of course, if their shares rise. So far, they've risen 3.6 percent, even though the NYT reported that "several of the people involved in the offering said they expect to see a potential 10 to 20 percent jump in the share price on Thursday, typical for an initial offering."

2) It's all about China: Even if GM is now a solid investment, that might have very little to do with its future North American operations and everything to do with Chinese operations. Simply put, the most obvious route to big profitability isn't selling American-made Buicks to the Chinese, or even Chinese-made Buicks to the Chinese. It's selling Chinese-made Buicks in the United States--and all over the globe. Let the UAW try to organize the workers in Shanghai. ... Michigan Democrat John Dingell says he has "full faith that GM will continue to make good on the American taxpayers' investment in it ...and, most importantly, continue to invest right here in the U.S. and put Americans back to work." Alternatively, GM will decide to make a lot of money. If the latter course gets chosen, Obama's intervention still saved lots of jobs, but only temporarily.** And it helped create a branded Chinese competitor for Ford ...​

__________

* Update: actually, the government apparently failed to get its stake to below 30 percent. The latest estimate is 33 percent.

** I favored the bailout, though I thought Obama should have driven a much harder bargain, especially with the UAW (whose contract would have been voidable in a normal bankruptcy). That would have given"new GM" a better chance of survival and served as a stronger deterrent to future executives and labor leaders who might put their firms at risk. ...

 

[Care4all]

President Bush has to be given some of the credit for this, HE is the one that actually began the bailouts in the working for the auto industry back in late 2008

 

[Oddball]

..... When VW's came to the US in the mid 20th century, they thumbed their noses saying that America would never buy small foreign imports. VW and Toyota proved them wrong by selling millions on reliable economical cars. GM thought they could compete by selling hyped up small junkie cars. Again they were wrong. They produced small cars as American taste turned to larger cars. Ford skunked them with the introduction of the Explorer and Chrysler grabbed the minivan market. I think the only thing that management really did right was moving into foreign markets. Had they not done this, they would have failed much sooner.

Total lie.

The first round of CAFE standards forced American auto makers to build hyped up small junkie cars...The reason we have SUVs and minivans is that they were built on truck frames, which were exempt from the mandates.

 

[Oddball]

President Bush has to be given some of the credit for this, HE is the one that actually began the bailouts in the working for the auto industry back in late 2008

Yeah, and he can share the blame.

The people who got totally burned in this one are the original bond holders.

Give me $50 billion and let me shaft my current investors and I can make a "profit" too.

 

[Care4all]

President Bush has to be given some of the credit for this, HE is the one that actually began the bailouts in the working for the auto industry back in late 2008

Yeah, and he can share the blame.

The people who got totally burned in this one are the original bond holders.

Give me $50 billion and let me shaft my current investors and I can make a "profit" too.

but wouldn't the bond holders have ZERO, NADA, NOTHING at all, IF president Bush and President Obama and congress did nothing?

and I am not saying that the bail out for them was the way for our presidents to proceed with them, but the companies would probably not exist today and the stock/bond holders of the company would have ZIP anyway, if the bailouts were not done....no?

 

[Oddball]

Under reorganization, the stocks and bonds would've at least had the possibility that they would be worth something one day.

This was a bailout of the UAW, plain and simple.

 

[boedicca]

President Bush has to be given some of the credit for this, HE is the one that actually began the bailouts in the working for the auto industry back in late 2008

Yeah, and he can share the blame.

The people who got totally burned in this one are the original bond holders.

Give me $50 billion and let me shaft my current investors and I can make a "profit" too.

but wouldn't the bond holders have ZERO, NADA, NOTHING at all, IF president Bush and President Obama and congress did nothing?

and I am not saying that the bail out for them was the way for our presidents to proceed with them, but the companies would probably not exist today and the stock/bond holders of the company would have ZIP anyway, if the bailouts were not done....no?

Under bankruptcy proceedings, those bond holders would have had a superior claim on proceeds over the union. It is the unions who stood to lose the most. That's why the strong arm tactics were applied to pay the bond holders less than they were legally owed.

 

[boedicca]

Daily Caller nails this noxious con game:

If the federal government wanted to recoup its investment in GM, then the GM stock price should be much higher than the $33 initial price. In order to break even, as the Deal Journal reports, the stock price would have to rise to around $50 per share. So why is the Treasury Department selling off the company at a loss?

First, the government is what is known as a “motivated seller.” By offering such a low stock price, the administration is essentially admitting that it has no place in running an auto company. While GM’s financial position is much better than it was when it should have gone bankrupt, the company’s finances are not great. A quick crunch of any of the numbers in the GM prospectus shows the company is not the healthy organization the politicos would have you believe. They have done a poor job running the company, even if they did save it from going under by ignoring the law and throwing billions of dollars at it. The sale prospectus even admits “our (that is, the government’s) disclosure controls and procedures and our internal control over financial reporting are currently not effective.” Hardly a ringing endorsement!

Second, they’re not the only ones in the game. The unusual bankruptcy settlement for GM granted a significant portion of the company to the United Auto Workers. The union is in this game too, even though it has no investment to recoup. The UAW is selling around 18 million shares, so it stands to gain about $500 million for its pension fund — at taxpayers’ expense....

GM selling at a loss should tell you something | The Daily Caller - Breaking News, Opinion, Research, and Entertainment

 

[rightwinger]

Bush knew GM could not be allowed to collapse. Obama knew that GM could not be allowed to collapse. Any president under those conditions would have stepped in to prevent collapse

The only ones who don't know are the rightwing Darwinists who want to see total destruction

 

[CrusaderFrank]

Daily Caller nails this noxious con game:

If the federal government wanted to recoup its investment in GM, then the GM stock price should be much higher than the $33 initial price. In order to break even, as the Deal Journal reports, the stock price would have to rise to around $50 per share. So why is the Treasury Department selling off the company at a loss?

First, the government is what is known as a “motivated seller.” By offering such a low stock price, the administration is essentially admitting that it has no place in running an auto company. While GM’s financial position is much better than it was when it should have gone bankrupt, the company’s finances are not great. A quick crunch of any of the numbers in the GM prospectus shows the company is not the healthy organization the politicos would have you believe. They have done a poor job running the company, even if they did save it from going under by ignoring the law and throwing billions of dollars at it. The sale prospectus even admits “our (that is, the government’s) disclosure controls and procedures and our internal control over financial reporting are currently not effective.” Hardly a ringing endorsement!

Second, they’re not the only ones in the game. The unusual bankruptcy settlement for GM granted a significant portion of the company to the United Auto Workers. The union is in this game too, even though it has no investment to recoup. The UAW is selling around 18 million shares, so it stands to gain about $500 million for its pension fund — at taxpayers’ expense....

GM selling at a loss should tell you something | The Daily Caller - Breaking News, Opinion, Research, and Entertainment

Like I said, this is Obama's Business Plan, fucking the debt and equity holders in order to transfer wealth to the UAW.

Only in American....well, USSR too.

 

[boedicca]

Yes. Many of us realized this prior to the 2008 election. It's a shame that we weren't the majority back then.

 

[Care4all]

hello?

[ame]http://www.youtube.com/watch?v=Rwt21jfxNKM[/ame]

 

[boedicca]

Let's look at that in a bit more detail.

The Dem controlled Congress passed a $25B loan and Bush approved funding of $17.4B to be distributed by The Next Administration.

Bush, misguidedly, didn't want to set Obama up with GM cratering while he was taking the oath of office.

n September, 2008 the Big Three asked for $50 billion to pay for health care expenses and avoid bankruptcy and ensuing layoffs, and Congress worked out a 25$ billion loan.[78] By December, President Bush had agreed to an emergency bailout of $17.4 billion to be distributed by the next administration in January and February.[79] In early 2009, the prospect of avoiding bankruptcy by General Motors and Chrysler continued to wane as new financial information about the scale of the 2008 losses came in. Ultimately, poor management and business practices forced Chrysler and General Motors into bankruptcy. Chrysler filed for chapter 11 bankruptcy protection on May 1, 2009 [80] followed by General Motors a month later.[81]

http://en.wikipedia.org/wiki/Automotive_industry_crisis_of_2008–2010#cite_note-78

 

[hortysir]

Bush knew GM could not be allowed to collapse. Obama knew that GM could not be allowed to collapse. Any president under those conditions would have stepped in to prevent collapse

The only ones who don't know are the rightwing Darwinists who want to see total destruction

Change those 2 line to, "UAW could not be allowed to disband"

 

[Care4all]

Let's look at that in a bit more detail.

The Dem controlled Congress passed a $25B loan and Bush approved funding of $17.4B to be distributed by The Next Administration.

Bush, misguidedly, didn't want to set Obama up with GM cratering while he was taking the oath of office.

n September, 2008 the Big Three asked for $50 billion to pay for health care expenses and avoid bankruptcy and ensuing layoffs, and Congress worked out a 25$ billion loan.[78] By December, President Bush had agreed to an emergency bailout of $17.4 billion to be distributed by the next administration in January and February.[79] In early 2009, the prospect of avoiding bankruptcy by General Motors and Chrysler continued to wane as new financial information about the scale of the 2008 losses came in. Ultimately, poor management and business practices forced Chrysler and General Motors into bankruptcy. Chrysler filed for chapter 11 bankruptcy protection on May 1, 2009 [80] followed by General Motors a month later.[81]

Automotive industry crisis of 2008?2010 - Wikipedia, the free encyclopedia

President bush said that Congress failed to pass a bill to bail the auto industry out before the end of the year recess, so he HAD to take $17.5 billion from TARP funds or another bailout fund, for them.

 

[The T]

Let's look at that in a bit more detail.

The Dem controlled Congress passed a $25B loan and Bush approved funding of $17.4B to be distributed by The Next Administration.

Bush, misguidedly, didn't want to set Obama up with GM cratering while he was taking the oath of office.

n September, 2008 the Big Three asked for $50 billion to pay for health care expenses and avoid bankruptcy and ensuing layoffs, and Congress worked out a 25$ billion loan.[78] By December, President Bush had agreed to an emergency bailout of $17.4 billion to be distributed by the next administration in January and February.[79] In early 2009, the prospect of avoiding bankruptcy by General Motors and Chrysler continued to wane as new financial information about the scale of the 2008 losses came in. Ultimately, poor management and business practices forced Chrysler and General Motors into bankruptcy. Chrysler filed for chapter 11 bankruptcy protection on May 1, 2009 [80] followed by General Motors a month later.[81]

Automotive industry crisis of 2008?2010 - Wikipedia, the free encyclopedia

Odd isn't it? Ford didn't go that route as neither did Toyota and others that run plants here in the U.S.

Management allowed themselves to be run over with demands they knew they couldn't meet. So the U.S. Taxpayer to the rescue.

Sorry guys...the U.S. Treasury is not a private piggybank.

 

[Care4all]

Let's look at that in a bit more detail.

The Dem controlled Congress passed a $25B loan and Bush approved funding of $17.4B to be distributed by The Next Administration.

Bush, misguidedly, didn't want to set Obama up with GM cratering while he was taking the oath of office.

n September, 2008 the Big Three asked for $50 billion to pay for health care expenses and avoid bankruptcy and ensuing layoffs, and Congress worked out a 25$ billion loan.[78] By December, President Bush had agreed to an emergency bailout of $17.4 billion to be distributed by the next administration in January and February.[79] In early 2009, the prospect of avoiding bankruptcy by General Motors and Chrysler continued to wane as new financial information about the scale of the 2008 losses came in. Ultimately, poor management and business practices forced Chrysler and General Motors into bankruptcy. Chrysler filed for chapter 11 bankruptcy protection on May 1, 2009 [80] followed by General Motors a month later.[81]

Automotive industry crisis of 2008?2010 - Wikipedia, the free encyclopedia

Odd isn't it? Ford didn't go that route as neither did Toyota and others that run plants here in the U.S.

Management allowed themselves to be run over with demands they knew they couldn't meet. So the U.S. Taxpayer to the rescue.

Sorry guys...the U.S. Treasury is not a private piggybank.

Tell that to President Bush, who did have the figures and briefings on the whole situation before he gave them the bailout....

He struggled with this decision, but still felt it was necessary for the good of the Nation, to do it...?

 

[elvis]

Let's look at that in a bit more detail.

The Dem controlled Congress passed a $25B loan and Bush approved funding of $17.4B to be distributed by The Next Administration.

Bush, misguidedly, didn't want to set Obama up with GM cratering while he was taking the oath of office.

n September, 2008 the Big Three asked for $50 billion to pay for health care expenses and avoid bankruptcy and ensuing layoffs, and Congress worked out a 25$ billion loan.[78] By December, President Bush had agreed to an emergency bailout of $17.4 billion to be distributed by the next administration in January and February.[79] In early 2009, the prospect of avoiding bankruptcy by General Motors and Chrysler continued to wane as new financial information about the scale of the 2008 losses came in. Ultimately, poor management and business practices forced Chrysler and General Motors into bankruptcy. Chrysler filed for chapter 11 bankruptcy protection on May 1, 2009 [80] followed by General Motors a month later.[81]

Automotive industry crisis of 2008?2010 - Wikipedia, the free encyclopedia

Odd isn't it? Ford didn't go that route as neither did Toyota and others that run plants here in the U.S.

Management allowed themselves to be run over with demands they knew they couldn't meet. So the U.S. Taxpayer to the rescue.

Sorry guys...the U.S. Treasury is not a private piggybank.

Tell that to President Bush, who did have the figures and briefings on the whole situation before he gave them the bailout....

He struggled with this decision, but still felt it was necessary for the good of the Nation, to do it...?

the banks?

 

[Trajan]

It didn't save the auto industry in the US. GM announced during it's appeal to Congress that it would be offshoring much of it's manufacturing to China. And GM has only proceeded along that path.

We saved GM so that GM could move to China.

Who's fault is it that GM has to go over seas?
GM UNION WORKERS that are over paid, lazy and demand unreasonable health care benefits.
The retiree health care benefits IS what killed American car maunfacturers.
And most all American companies.
The fact that most Americans will NOT admit that the rise in Big Pharma and corporate Med that took 6% of GNP in 1960 and now is taking almost at 20% of GNP has a serious negative effect on being competitive in the market have their fucking head in the sand twisting.
Surviving in business boils down to COSTS. Health care costs have sky rocketed here for the last 30 years. We demand too much in benefits and it is now UNSUSTAINABLE.
What is a business to do?
WAKE UP AMERICA.

I certainly don't blame GM workers for asking for the benefits. GM management gave in to the union rather than fighting it. They made the wrong decisions over and over. When VW's came to the US in the mid 20th century, they thumbed their noses saying that America would never buy small foreign imports. VW and Toyota proved them wrong by selling millions on reliable economical cars. GM thought they could compete by selling hyped up small junkie cars. Again they were wrong. They produced small cars as American taste turned to larger cars. Ford skunked them with the introduction of the Explorer and Chrysler grabbed the minivan market. I think the only thing that management really did right was moving into foreign markets. Had they not done this, they would have failed much sooner.

A lot of GM top management left in years before the bailout. The CEO and other top management were ousted. About 25,000 UAW employees lost their jobs. Healthcare benefits were reduce. Many employees had pay cuts. The employees also lost their right to strike.

The new GM is a lot smaller. Their profit margins are higher than they have been in years and they are making billions in profits. GM is certainly not the same company they were in the past.

the Volt?