By on July 28, 2009

Old GM ran afoul of the requirements for the original bailout ($25 billion worth of Department of Energy retooling loans). Something about a DOE requirement that the recipients be running a viable business. Now that it’s emerged from bankruptcy with taxpayer assistance, “New GM” wants . . . taxpayer assistance. In fact, it doesn’t just want the money. It’s counting on it. According to The Wall Street Journal, GM Treasurer Walter Borst told a congressional oversight panel that securing $10 billion in no-to-low interest, twenty-five year DOE retooling loans was “a component of GM’s shorter-term liquidity assumptions.” C’mon. Really? “He pointed to those funds as one of the sources of liquidity GM is factoring into its plans in order to meet its capital requirements in the future.” Later, Borst decided to added [what he thought was] a suitable qualifier: “We’re not dependent on them.” Join us next time, for other phrases that you might hear from a drug addict.

Get the latest TTAC e-Newsletter!

12 Comments on “Bailout Watch 573: GM Counting on $10 Billion DOE Loan...”


  • avatar
    Joe ShpoilShport

    As for the pic, who can argue that the GM ownership experience needs reinventing?

  • avatar
    BDB

    Here is a (not really shocking) prediction:

    Every automaker that has auto plants in the United States will receive money from this fund.

    I fully expected GM to begin paying back the government and now they start acting like the Post Office.

    You mean GM will send a letter to anywhere in the USA in 1-3 days for $0.44?

  • avatar
    pnnyj

    Sigh, just another example of “the smartest people in the room” ignoring the valuable lessons that their moms tried to teach them when they were 5 years old: Don’t count your chickens before they hatch.

    It’s too bad we can’t short new GM. Instead we’re all long the worst run company in America.

  • avatar
    pnnyj

    @BDB

    If every manufacturer with facilities in the US is going to get a share of the $25B (not an unreasonable prediction) then GM should hardly be counting on getting 40% of it for themselves. GM’s market share of 20% (and falling) and their increased emphasis on foreign production just don’t justify them getting 40% of the DOE funds, not even close.

  • avatar
    BDB

    @pnnyj–

    The question is, what percentage of the domestic automotive industry does GM employ? Not just assembly plants, but engineering, designing, parts, dealers, etc. I honestly don’t know, but maybe this is the rationale?

  • avatar
    lw

    GM will get billions and billions of new cash every 6 months of so. It will be called different names.. Be hidden in various bills.. Heck there might be $5B in the health care bill that nobody will read.

    The fact is that GM will need billions more and the other fact is that Obama can’t do another public bailout.

  • avatar
    Lorenzo

    “The fact is that GM will need billions more and the other fact is that Obama can’t do another public bailout.”

    You’re right, lw, Obama can’t have GM go under while unemployment is still rising, so he’s got to hide the payments. That’s the only reason why I’m not calling for RF to start a GM chapter 7 watch.

    Marchione has a much smaller workforce at Chrysler, though. Once he gets the Fiat/Jeep franchise together, he can phase out the rest of Chrysler, and nobody will care.

  • avatar
    pista

    Now that’s gall!

  • avatar
    TexN

    These guys are crack whores in business suits. Anything to get the next fix………..

  • avatar
    TomH

    You have to appreciate the depths of GM’s inbred culture when you read today’s article in USA Today by Chris Woodyard: General Motors’ fuel-cell work may be in danger Burns, 58, says he decided to retire to give the new GM fresh research leadership under Alan Taub, 54, who, he says, will continue with the same direction.(Emphasis added)

    Old winewhine, new bottle.

  • avatar
    rnc

    There isn’t any money hidden anywhere in any bills. Obama said there will be no more bailout money (until that changes it’s the truth).

    In terms of the DOE loans members of congress (not obama) are trying to pass legislation that would double the amount available, however (luckily) it doesn’t seem to have support to even make it out of the house.

    And even if technically GM meets the requirements to qualify for the DOE loans now, it isn’t right for them to receive them, They have been given enough of an advantage.

    Thier (GM’s) biggest problem is that they basically stopped R&D and retooling efforts in 2007 (except for the Volt), while they and Ford were burning through similar amounts of $, Ford was retooling factories and readying to bring multiple new cars to market and refreshing and improving existing models, while GM was just keeping the lights on basically. GM is now two years behind (and in the Automaker world that is a lifetime).

  • avatar
    adonasetb

    The government is going to spend us out of debt so just relax and let the administration open their wallet to success – pennies from heaven my a** those are billions of dollars raining down on the new gm – my great grandchildren can pick up the tab.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Authors

  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Matthias Gasnier, Australia
  • J & J Sutherland, Canada
  • Tycho de Feyter, China
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Faisal Ali Khan, India