The GM Con

Discussion in 'Politics' started by boedicca, Apr 1, 2011.

  1. boedicca
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    boedicca Uppity Water Nymph Supporting Member

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    The Con played on Taxpayers by the Obama Administration keeps getting smellier and smellier.

    As galling as the auto bailout was for many Americans, the hidden “stealth bailouts” that occurred during the government-led industry reorganization are often even more galling. Today the final chapter of one of those “stealth bailouts” has taken place, as GM has sold its stake in its spun-off supplier Delphi for $3.8b, booking a $1.6b gain on the deal. So, how is GM divorcing its former in-house supplier a stealth bailout? Back in the dark Summer of 2009, the government organized a GM-led rescue of Delphi, which had been languishing in bankruptcy since 2005 (after GM. By buying a chunk of Delphi for $2.5b of the government’s money and selling it back for a profit, GM’s helped itself to a little extra bump of public money. Oh, and did we mention that GM dropped all kind of pensions in Delphi’s lap when it spun the supplier, including workers who had never been employed by Delphi.

    But that’s not the worst part: any guesses as to why GM’s stake in Delphi is suddenly worth so much more? A recovering industry, perhaps? Wrong. Shortly after GM bought back its stake in Delphi, the supplier dumped $6.5b worth of pensions onto the government’s Pension Benefit Guarantee Company, causing huge benefit cuts and hidden government costs. What did the PBGC’s stake, given as “partial compensation” for that pension dump, yield it? A cool $594m. Meanwhile, thanks to the government ‘s arguments, GM still had to top-up UAW retiree pensions, leaving non-union retirees and members of other unions out in the cold [read all about it in a just-released GAO report in PDF here]. A shell game inside of a political payoff inside of another shell game, in other words. There’s nothing to not love here…


    GM Books $1.6b Gain On Delphi Share Sale/Pension Shell Game | The Truth About Cars


    And then we have the $45B in tax breaks granted in violation of the standard treatment in bankruptcy proceedings, and an additional $14B domestic tax break:

    That's only the beginning. Both the White House and the Congressional Oversight report omit the fact that during its bankruptcy, GM got a $45 billion tax break, courtesy of the American people.

    GM is driving “away from its U.S.-government-financed restructuring with a final gift in its trunk: a tax break that could be worth as much as $45 billion,” reported The Wall Street Journal last November.

    Over one year after the promises President Obama and his administration made about the auto bailout, a February piece on AutoBlog also confirms that GM will also get a $14 billion dollar domestic tax break:

    GM will be able to skip its tax tab due to years of massive losses. Companies are typically forgiven a portion of future taxes due to their past losses, but that benefit is typically stripped after an organization goes through bankruptcy.


    http://www.washingtontimes.com/blog...1/barack-obama-losing-84-billion-big-success/
     
  2. The T
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    The T George S. Patton Party Supporting Member

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    Has GM paid the Taxpayers back yet?
     
  3. Trajan
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    Trajan conscientia mille testes

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    sure, they have paid a lot back, if you count the 16billion escrow fund we gave them that they took the money from......left pocket to right pocket....neat eh?
     
  4. Soggy in NOLA
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    Soggy in NOLA Platinum Member

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    The GM bailout was union payback with YOUR money.

    It was a total scam from day one. Not to mention didn't address it's looming union pension issues in any serious manner... just wait... GM will b back looking for more very soon.
     
    Last edited: Apr 1, 2011
  5. The T
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    The T George S. Patton Party Supporting Member

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    Exactly my point.
     
  6. WillowTree
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    WillowTree Diamond Member

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    I'll be glad when the obie wan/union screw over of TAX Paying Americans ends.
     

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