Having laid into GM today for trumpeting a government loan repayment, it would be churlish not to point out that, by Detroit standards anyway, GM’s “partial refund” is actually kind of a big deal. Take today’s news from the nearly year-long liquidation of “Old CarCo,” the poisoned (in some cases, literally) remains of what was once “Bad Chrysler.” Bloomberg reports that the US Treasury’s $5b line of credit has been placed in the “unsecured” category of Old CarCo’s last debts, meaning recovery is “undetermined.” As in not so very likely at all.
Disputes over environmental cleanup were dragging out proceedings, and a $15m “environmental reserve” for cleanup at polluted former Chrysler sites (that aren’t likely to be sold), had to be allocated from $260m the government had already set aside for Chrysler’s wind-down costs. Chrysler added the $15m trust fund, which groups can sue for cleanup costs, only after their lawyer warned that the government’s wind-down money could run out altogether. So yeah, compared to that, today’s GM loan payback deserves a golf clap… but why invite the comparison?