By on May 22, 2009

Anyone out there keeping track of how much money the federal government has plowed into GM, as the automaker downsizes to death? The Washington Post reckons that the next post-bankruptcy tranche—the debtor-in-possession financing needed to cleave GM into “good” and “bad” bits and keep both balls in the air—will be $30 billion. The paper also claims that this will bring taxpayer’s contributions to $45 billion. The $15 billion difference, originally sold as a “bridge loan”? Forgiven. Gone. In exchange for their largesse, “the government plans to take at least 50 percent of the restructured company . . . and the right to name members to its board of directors, as it has at Chrysler, where the government will control four of nine seats.” Although this bailout madness began last year, if we use IHS Global Insight’s recently recalculated GM production figures (GM will build 1.7 million vehicles this year), $45 billion represents a federal contribution of $26,470 per car. That’s provided you don’t add-in Uncle Sam’s $13.5 billion “investment” in automotive lender GMAC. And all the other stuff.

Get the latest TTAC e-Newsletter!

Recommended

19 Comments on “Bailout Watch 534: Feds to Give Post-C11 GM $30 Billion...”


  • avatar
    Billy Bobb 2

    It’s morning in the USSA!

    Rise, shine and unite comrades!

  • avatar
    hreardon

    Mother of God, what will it take for this country to wake up and say NO MORE to this madness?

  • avatar
    allegro con moto-car

    Twenty six grand per vehicle? It is just a number. This reminds me of my twelve year employment at the USPS. After a while, you get used to all of the shenanigans, and nothing surprises you anymore. If anything, one develops an expectation for far greater entertainment stupidity. And as long as the gobment is involved, there will be more. Stay tuned.

    allegro

  • avatar
    indi500fan

    How well will this play politically in the out years? How many average Joes and Janes will figure out their tax dollars are funding $3200 / month retirements and platinum VEBA bennies for UAW members?

  • avatar
    OldandSlow

    There is more to the madness than meets the eye. The Treasury through AIG may have a substantial payout due to Credit Default Swaps on the 27 billion bond holders’ stake.

    Not all of the bond holders bought CDS protection, but some did and the only way they get paid is for GM to go into default. The best part of which is that many of the current bond holders paid pennies on the dollar for GM’s secured debt.

  • avatar
    Steve-O

    This is appalling. And prepare for that $45 Billion number to go UP before all is said and done…

  • avatar
    TexN

    I love my country, but I hate the idiots that run it……….

  • avatar
    jkross22

    Part of me knows that elected officials aren’t stupid and have basic math skills, but then you hear about this and it’s all put in question again.

    It would have been better simply to give vouchers to returning soldiers for free Chryslers and GM’s or to their families if they didn’t return. At least they earned them.

    If Obama did that, at least then I wouldn’t say this:

    Hey team Obama, great job burning my tax dollars and my kids’ savings. Go to hell.

  • avatar
    Dave

    Where the heck has all the money gone? Have they had absolutely no revenue since Christmas?

    $15B gone, and another $30B needed ….

  • avatar
    Bunter1

    Someone check my math please.
    I get 45B/61K GM UAW workers=738K per.

    BO-just send each one a check for 500k, you’ll get their votes, and go with jkross’ idea and clear inventory to the returning soldiers.

    Let it go.

    Bunter

  • avatar
    NoSubstitute

    All this belly-aching is absurd. We’re getting half of the stock in the new company. Once new GM hits a $90B market cap, we can sell and recover the entire investment. All that would take is for GM’s stock price to hit around $150, which interestingly is about the same price that the bondholders would need to get to reach par based on the outstanding offer they’re inexplicably about to reject. I mean we’re only talking a lousy $150. You can’t even get an iPhone for that.

  • avatar
    KeithF

    lol @ NoSubstitute :-)

  • avatar
    DarkSpork

    NoSubstitute :

    All this belly-aching is absurd. We’re getting half of the stock in the new company. Once new GM hits a $90B market cap, we can sell and recover the entire investment. All that would take is for GM’s stock price to hit around $150, which interestingly is about the same price that the bondholders would need to get to reach par based on the outstanding offer they’re inexplicably about to reject. I mean we’re only talking a lousy $150. You can’t even get an iPhone for that.

    GM stock is currently selling at $1.50. How long would it take for the value of the stock to become worth 100 times as much as it is now? Lets use an incredibly unrealistic number for arguments sake and say that every month the value of the stock doubles until it hits 150 dollars, that’s roughly 6 1/2 months. Now insert (more plausible) time line here (perhaps replace months with years). But I’m sure you were just joking.

  • avatar
    Luther

    When you pay taxes you are funding terrorism…It is OK to destroy your own life but you don’t have the right to pay politicians to destroy other people’s lives…Stop giving these primitive socialist parasites your money!

  • avatar
    agenthex

    Queue the same complaints that have dispelled repeatedly before.

    Ironically for the anti-gov types, if they had only supported sane finance sector regulation and avoided the meltdown, a bailout of the d3 probably wouldn’t have happened.

    Reap what you sew. Too bad you had to screw it up for everyone else too.


    It would have been better simply to give vouchers to returning soldiers for free Chryslers and GM’s or to their families if they didn’t return.

    Free Sebring for joining? Sign me up! Where does the line start? Nothing but the best for our veterans.

  • avatar

    Baruth for President!

  • avatar
    Landcrusher

    Bertel,

    I was thinking the same thing.

  • avatar
    cleek

    So using the numbers provided, the borrowed monies pissed down a rat hole spent and further required are sufficient to purchase all of GM’s PM’s forecasted annual production at the average retail transaction price.

  • avatar
    Robert.Walter

    Funny, the virtual debt car is passing, the fastest previous debt car, on the left, only slightly faster than JB claims to do on the right; the only difference in approach is philosophy vs. psychopathy … and maybe, in its application, there is no difference.


Back to TopLeave a Reply

You must be logged in to post a comment.

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributors

  • Matthew Guy, Canada
  • Seth Parks, United States
  • Ronnie Schreiber, United States
  • Bozi Tatarevic, United States
  • Chris Tonn, United States
  • Corey Lewis, United States
  • Moderators

  • Adam Tonge, United States
  • Kyree Williams, United States