By on October 13, 2012

Longtime reader and new contributor Tyler Vandermeulen is a financial analyst by day. He took a deep dive into the EDGAR database to unearth how much of GM’s money flows abroad. Please welcome Tyler with the respect he deserves. Rude comments will not be tolerated.

Before the bailout of General Motors, it was well understood that the world’s largest automaker was losing huge amounts of money in the US and was staying afloat thanks to stronger performance in overseas markets. Since the bailout, however, that dynamic has been turned on its head. Thanks to a leaner manufacturing footprint, debt eliminations and steadily recovering sales, GM’s US operations have generated the lion’s share of the company’s profit since the bailout. And now, as the rest of the world economy slows, GM is spending more and more of its taxpayer-enhanced cash pile to shore up its faltering foreign divisions. In fact, according to an analysis of GM’s SEC filings, the company is likely to incur over $6.5 billion in losses and expenditures overseas in the 2011-2014 period, not counting over $1.6b in foreign potential legal liabilities or several other incalculable expenses that could add up to billions more. Not only are these expenses a challenge to GM’s overall financial health at a time when it also faces billion-dollar expenditures on pensions in the US, it shows the basic problem with national bailouts of global companies. Taxpayers who were told they were saving an American company are now seeing their tax dollars flowing overseas by the billions.

A full calculation of GM’s overseas expenditures since the bailout would be a daunting task indeed. Simply by scouring GM’s latest SEC filings, one finds no shortage of losses and one-time expenditures abroad. In fact, nearly every division of GM’s global empire has required some kind of assistance over the last year or so. These expenditures come in many forms, from tax assessments to investments, from bailouts to severance deals, and due to the complex nature of GM’s global finances they cannot be fully accounted with precision. But they all emphasize the reality that, after years of living off foreign operations, GM’s bailed-out North American division is now bailing out the rest of the world.

Europe: Black Hole Opel, Unions, PSA

GM’s European losses currently get the most attention from analysts, and are nothing new for The General, which has reportedly lost over $14b in Europe over the last decade. Those losses and expenditures continue to add up. In the two full years since GM decided to cancel a planned sale of its European division Opel, GM Europe’s losses have added up to $2.74 billion, with another $617m lost in the first half of 2012 (EBIT). Additional goodwill adjustments of $590m in the first half of 2012 and $621m in 2011 further added to the losses. Additionally, GM has spent some $313m on voluntary severance for European workers, and expects to spend another $100m on the same program through the end of next year. Finally, GM has an undisclosed agreement with European labor unions to spend as much as $265m per year between 2011 and 2014. The company has pledged some $406m in inventory as collateral for that agreement. Not counting the spending agreement with European unions, this puts GM’s losses and outlays on Opel and GME in the last two and a half years at more than $4.25 billion.

GM’s losses in Europe aren’t likely to end there. This year, GM spent $400 million on a 7% stake in Peugeot-Citroen PSA, an investment that GM admits has already lost value. GM says it plans to hold onto that stake for the long term, and has chosen not to write down that loss… yet. Just today, rumors surfaced that GM could spend even more money on its Peugeot tie-up, possibly providing capital for an Opel-PSA joint venture. Meanwhile, the worst-case scenario for Opel involves an estimated $13b outlay to shut down plants and prepare Opel for a sale, according to Morgan Stanley analyst Adam Jonas. In this scenario, GM could spend as much as half of its cash pile extricating itself from its money-losing European operations.

GM losses and outlays in Europe, 2010-June 2012: $4.5b+

Asia: Korea Debt, Murky Hong Kong Dealings 

GM’s Asian operations are consolidated as GM International Operations (GMIO), a division that includes Korea, China, Australia, India and other Asian markets. Prior to the bailout, GM’s Chinese operations were widely considered to be a major profit center for the company, while Korea has become increasingly important as a development center and India has potential for future growth. However, GMIO’s profitability has been weak in comparison to the revitalized North American division, generating just $400m in consolidated adjusted EBIT in the first half of 2012. And since 2011, GM has had several expenses associated with its Asian operations.

In 2011, GM spent $100m for 7% of its GM Korea subsidiary, increasing its holding to 77%. This year, GM has recorded a $27m Goodwill impairment related to its Korean operations, and has paid $22m to Korean workers as part of its severance program there. GM Korea also carries significant amounts of short-term and long-term debt to Korean creditors that GM will have to pay down.

More puzzling is GM’s strange Indian joint venture with its Chinese partner SAIC. In late 2009, GM rolled its Indian operations into a 50-50 joint venture with SAIC, known as the Hong Kong Joint Venture, or HKJV. By the first quarter of 2011, that venture had lost enough value for GM to record an impairment of $39m and “other charges totaling $67m.” From there things get strange. According to GM’s 10-Q:

“We were informed of SAIC-HK’s intent to exercise its right to not participate in future capital injections in HKJV. If this occurs we plan to settle the promissory note in the three months ending September 30, 2012 and provide an additional equity investment of $125 million into HKJV. As a result SAIC-HK’s interest in HKJV would be diluted from 50% to 9%. We also anticipate that the shareholders agreement would be amended such that we obtain control of and consolidate HKJV.”

It would seem that GM is buying its partner out of the Indian arrangement at a cost of $125m, however, GM has had several convoluted transactions with SAIC in the past, most notably in the sale of its “Golden Share” in the Shanghai-GM joint venture, which was offset by a Chinese bank loan and was eventually rolled back. It’s too early to say for sure whether GM will purchase the controlling stake in HKJV, and thereby regain full control of its India business. It is unlikely that SAIC will relinquish its grip on India, just because it suddenly can’t service the capital requirements of the HKJV. Possibly, more information will become available when GM files its Q3 paperwork, or possibly later. With some 30% of GM’s global sales in China, GM shareholders  deserve more visibility into this byzantine part of GM’s world.

GM Outlays on GMIO, 2011-2012: ~$380m

South America: Tax Assessments

GM’s South American unit dipped into the red in the second quarter of this year, and its $64m net EBIT through the first half of 2012 is just $7m better than its Q1 2011 performance alone. But even if GMSA’s performance improves this year, it has paid out around $100m this year between the purchase of GMAC’s Venezuelan financing operation and a worker severance program in Brazil. $700m was also spent in 2011 to retire debt facilities at GMSA. Furthermore, GM has run into several tax assessments in South America, including a $292m assessment for the years 2002-2004 by the Mexican government and a $180m assessment for 2007 by the Brazilian government. GM says it has “adequate reserves” to meet these obligations, but notes:

“Certain South American income and indirect tax-related administrative proceedings may require that we deposit funds in escrow or make payments which may range up to $0.9 billion.”

GM Outlays in South America, 2011-2012: ~$1.7b

Legal Liabilities

Due to the unpredictable nature of legal disputes, the amount of overseas legal liability carried by GM may not result in actual expenditures. That said, the following legal liabilities are noted in GM’s SEC filings:

Settlement of class action suits regarding Canadian pricing policy: $21m

GM Canada “Lock up agreement” lawsuit: potential liability $918m

Korean labor law suit: $152m in accrual, $556m in further potential liability.

Potential overseas legal liability: ~$1.65b

Without including potential liability costs or the more inevitable costs associated with Opel’s restructuring, GM has spent or lost in excess of $6.5b overseas in the last 30 months or so. With more losses and expenses coming, taxpayers can expect to see their investment in GM’s North American operations continue to support a steady flow of cash to GM’s overseas operations. Perhaps taxpayers should have been told that they weren’t simply bailing out an American automaker, but a variety of overseas operations as well.

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77 Comments on “How The GM Bailout Turned Into Foreign Aid...”


  • avatar

    “Taxpayers … are now seeing their tax dollars flowing overseas by the billions.”

    So, what else is new?

  • avatar
    cromera

    GM’s product development pipeline was basically frozen for about two years, with the usual market consequences; in the past few months we’ve seen basically a totally new crop of cars coming to the South American market: Cruze / Cobalt / Spin / Onix (GSV) / S-10 / Blazer. I expect them to come back to profitability in 2013.

    • 0 avatar
      mo animus

      Hey hey hey!!!! You must be loading up on GM stock!!!! I mean thanks for the tip…they haven’t had a product development program since 1969 when they had about 70% market share. Wow, so don’t tell anybody, but this could be the next Apple is your myopia and illogical reasoning is correct.

    • 0 avatar
      DaTruth

      Not in Europe. They are having their lunch handed to them by Volkswagen in particular who is building world class, reliable, beautiful cars at a similar price. The Volkswagen’s get better mileage on the whole and their diesel vehicles are light years ahead of the competition particularly GM. Even GM’s new Malibu can’t hold a candle to the competition and gets outscored brutally by the Passat.

      The execs wanted to unload Opel during the restructuring but the Union leaders said NO. Now, the taxpayers are watching their equity (govt owned shares) drop in value.

      • 0 avatar
        dolorean

        “Finally, GM has an undisclosed agreement with European labor unions to spend as much as $265m per year between 2011 and 2014.”

        @DaTruth, if union subserveance means a paltry $265M over four years, then its not the Unions busting the balls of the General. Giving golden parachutes to low-browed and nearly useless Executives who enjoy a revolving door of entitlements and placating a one-minded, profit now-and-always board whom is so myoptic as to not see the writing on the wall, costs FAR more in lost revenue. But hey, the upside is the 1% gets theirs and it’ll trickle down, right?

  • avatar
    toomanycrayons

    “Perhaps taxpayers should have been told that they weren’t simply bailing out an American automaker, but a variety of overseas operations as well.”

    Underlying these sort of objections is the feeble hope that big decisions are made with a reasonable amount of perfect prior knowledge. While that’s how I live my life (everyone here as well, probably), on a governmental scale, surely that is simply naive religious optimism. Or, conspiracy theory…

  • avatar
    dougjp

    Thanks to the author for the details and taking the time to go through all that information. And its a surprise to no one that bailed out Companies doing business internationally and their resultant “artificial” balance sheets where they get bailed out end up sending piles of money to subsidiaries where those weren’t bailed out. After all, why did the overall enterprise need bailing out in the first place? Right, they were losers, and not just in one country.

    However about half way through I got the impression this is one of those articles where the author started working having a foregone conclusion in mind, and wrote/used just information in a way to support it. Apples and oranges got compared (balance sheet items and income statement items), some of the outlays totals were not funded by American tax dollars but rather by the local subsidiaries cash flow, ie; details taken out of overall financial performance context, insufficient other financial detail which was needed to reach some of the individual paragraphs’ conclusions (ie; whether or not it was American funds used entirely or partially). And go to filings by any large international Company and you are bound to find contingent liabilities like potential lawsuits and the like, invariably followed by the auditor saying something like “management considers this without merit”.

    As I said at the beginning, I doubt anyone will dispute the subject line, I just think the truth has been stretched.

    • 0 avatar
      Pch101

      “Apples and oranges got compared (balance sheet items and income statement items), some of the outlays totals were not funded by American tax dollars but rather by the local subsidiaries cash flow, ie; details taken out of overall financial performance context, insufficient other financial detail which was needed to reach some of the individual paragraphs’ conclusions (ie; whether or not it was American funds used entirely or partially). And go to filings by any large international Company and you are bound to find contingent liabilities like potential lawsuits and the like, invariably followed by the auditor saying something like “management considers this without merit”.

      Yep.

      I’m not exactly a fan of GM, but there was a fair bit of stretching here. Just glancing at the 2011 10-K and the 2Q2012 10-Q, I see Asia more than covering the losses generated by Europe and South America. Asia produces better net income as a percentage of revenues than does North America, although it obviously produces less total net income overall because it’s a smaller business unit.

      And yes, contingent liabilities are just that. Often times, they get whittled down or go away entirely. They have to be accounted for in managing enterprise risk, but they rarely translate into dollar-for-dollar outlays, as they usually represent a worst case scenario, not a likely outcome.

    • 0 avatar
      Lorenzo

      I don’t look for absolute “truth” within the space constraints of a TTAC article. It’s an overview, and an introductory one by a new author who undoubtedly has more to say/write about the subject. I look forward to reading future articles with a narrower focus and more detail, but the overview is appreciated.

      • 0 avatar
        Pch101

        It’s not an “overview”. There’s a fair bit of hype and innuendo in this piece, mixed with a bit of spin, and it takes facts out of context.

        There’s an old expression about a little knowledge being a dangerous thing, and that applies here. If you try to learn about the company by reading this article, then you’ll actually end up knowing less about it than when you started. Being misinformed is worse than being uninformed.

  • avatar
    Extra Credit

    “Perhaps taxpayers should have been told that they weren’t simply bailing out an American automaker, but a variety of overseas operations as well.”

    Clearly, your skills and abilities are rooted in finance, not marketing. :)

    Thank you for the fact-based analysis. While not completely surprising, it does provide a clearer picture.

    @dougjp – You are correct in questioning the source of funds for the international expenses.

  • avatar
    Dimwit

    One nit to pick… You have the Cdn leagal liabilities coming out under “Overseas”. That wouldn’t happen. All Canadian operations are part of the North American operation and those potential liabilities will be accrued out of the domestic finances.

    Nicely done otherwise.

  • avatar
    AJ

    Thanks for the story. Very interesting, and sad.

  • avatar
    prthug

    You need to throw in the fact that not getting rid of Opel is the single biggest drag on the value of the stock, which is worth another $20 billion or so of the tax payers payback. This was a decision of the current Board and has proven to be a disaster. Opel is a black hole that cannot be fixed, spun JV’d or anything else. So much for the new era Board and all that accountability.

    • 0 avatar
      Dimwit

      If you look at the Opel/PSA thread it’s clear that GM has no intention of paying out $20 or so billion to clean up Opel. They are manoeuvering like mad through their stake in PSA to unload their liabilities. It just takes a long time.

      • 0 avatar
        rnc

        GM may not have to pay $20 Billions, but they’re final tally will be in the $10′s of billions, I think they are just trying to do it in the least painful way (better to stretch out the billions over a period of years than one lump sum)

    • 0 avatar
      DaTruth

      The current board tried to unload Opel but were shot down by the majority stockholders…the Union and Federal Govt.

      • 0 avatar
        dolorean

        DaTruth must be new slang for troll. The Board is nearly useless in times of crisis and ALWAYS go Chicken Little when it is forced to accept that they may not be making silly profits every quarter. The Union and Fed Gummint only wished to have what was already promised to them in writing to be represented, not just the over-paid and grossly inflated executive class.

  • avatar
    doctor olds

    This site is consitent in one way- spinning facts around GM to inflame some.

    This post is lacking logic in that ALL of GM’s losses overseas have been more than covered by profits here and elsewhere. There has been absolutely zero taxpayer dollars used overseas. The company is generating plenty of money from its operations.

    The company has been consistently profitable every quarter since exiting bankruptcy to the tune of $9B operating profit AFTER all the overseas losses were accounted for last year, and AFTER they invested $6B in America.

    As a matter of cold hard fact, GM has not received a dime of taxpayer money since the bankruptcy, so implying that taxpayer money is flowing overseas is simply false. On the other hand, it is a global company with ebb and flow in world regional profitability.

    • 0 avatar
      el scotto

      Yeah, yeah, but there’s all those pesky GM shares the US Government owns.

    • 0 avatar
      corntrollio

      Yes, and in fact, for tax reasons and other legal and economic reasons, there are limits to how profits would be shifted between subsidiaries anyway. A lot of commenters here seem to be clueless about transnational business.

      This is a good compilation of certain data, but to pretend it tells the whole story or is as simple as described is a bit naive.

  • avatar
    PrincipalDan

    Yesterday I was walking through the Walmart parking lot in Farmington, NM when I saw an older Korean made Hyundai Sonata with a bumper sticker that said “Romney/Ryan Believe in America”. If this declaration had been on a new Alabama made Sonata I would have seen no irony in it but on a “not made in America” car it made me chuckle.

    This article sounds like the “law of unitended consequences” in action. You can never fully predict how resources will be spent or used.

    • 0 avatar
      dejal1

      You make the assumption that the current owner of the car bought it new. If so, then yes, you are correct. If bought used, Hyundai saw no money from the current owners other than maybe parts to keep it going.

      • 0 avatar
        PrincipalDan

        I make the assumption based on several things. The owners happened to be leaving at the same time as I, and the owners were elderly and certainly looked to have the money to be original owners. Secondly in my area usually used cars end up with multiple car dealership stickers on them simply because the dealers are too lazy to remove the previous stickers. This car appeared to be a Larry H. Miller Hyundai orginal.

    • 0 avatar

      I personally see no inconsistency between “believing in America” and using imported products. I could be wrong but it seems to me that for most of American history, imports and exports have been an important part of the economy. Besides, thrift and frugality used to be American values. Driving an old Hyundai seems to me to be more in tune with the Founding Fathers than running up $16 trillion in debt. Buying an old Korean car makes more sense than borrowing more money from China.

      It’s a global market. Always has been. Isaac Singer exported a lot of sewing machines until he discovered that it made more sense to assemble them in local markets. Henry Ford followed the same model, the first “foreign” Fords were assembled in Windsor, Ontario in 1904.

      I’ve put up a couple of posts recently about the Orphan Car Show held every year in Ypsilanti’s Riverside Park. When driving to Ypsi or Ann Arbor, I’ll often take two lane roads, not the interstate highways. Between A Squared and Ypsi on Geddes road is a large, modern facility called the Hyundai KIA America Technical Center. A few miles away in A2, Toyota has a billion dollar plus tech center, where the Tundra pickup was designed and developed.

      So if a couple driving an older Hyundai wants to put a political sticker on their bumper that says “Believe In America”, there’s nothing hypocritical about it. Americans, for the most part, believe in economic freedom and the choice to buy imported goods is part of that freedom.

      It’s a global market, goods move all around the globe, components sourced around the world end up at Chinese factories where they are assembled into iPhones and what have you. “What have you” literally. If you surveyed what Americans buy in the course of a year, I’d be shocked if anything they buy, except for possibly hand tools like a shovel, is 100% assembled in the USA from 100% USA made components. If you operate a business it’s almost impossible to avoid foreign sourced components, whether you’re in China or the US.

  • avatar
    OldandSlow

    At least we didn’t bail out AIG. Oh wait, we did bail out AIG to the tune of $180 billion plus dollars – much of it went overseas.

    The sad truth is that GM has long been an international player. So, if you bail out GM, you are sending some of that money to another continent.

    Both GM and Ford are operating in the red in Europe. FIAT is junk bond territory and would be in deep sh*t without the Chrysler brands. In short, all three in someway, shape or form subsidizing their European losses.

  • avatar
    Darkhorse

    I agree with doc olds that GM can currently cover all its overseas losses with revenue generated in North America. But for how long? I think the author was trying to tell us that things can and likely will get worse.

    • 0 avatar
      el scotto

      +1 I’d love to see the author do similar analysis on Ford and Chrysler. Some good reading for a Saturday morning.

      • 0 avatar
        d524zoom-zoom

        Great point El Scotto I would love to see the author post the same information on both Chrysler and Ford. I believe that type of information would possibly and i mean possibly give the GM hater’s here something else to think about.

    • 0 avatar
      highdesertcat

      The 2014 model year will be a biggie for GM. If GM wins its bets and makes a successful turnaround and comeback with its new models, then GM’s future will look brighter than today.

      But if GM fails to sway enough people in North America and the rest of the world to forego buying the foreign brands or Fords, then another bailout will be more likely for the 2015/2016 time frame.

      To be sure, the US government will buy thousands of GM fleet vehicles to help save GM exactly like they did when American Motors was failing. But that didn’t stop AMC from biting the dust in the days before bailouts, handouts and nationalization.

      For many analysts it was a given that we, the people, bailed out the UAW, GM and all its international operations in 2009, and, if it comes to pass, will do so again in the not too distant future, regardless of who resides in the White House or which political party controls Congress.

      • 0 avatar
        DenverMike

        You take a big step backwards when you kill-off long amortized models for new ones while hoping the (current model) over-stock holds you over during the transition period.

        It’s a huge gamble especially when models are all new, but don’t exactly break new ground.

        When the government buys cars by the thousands, they tend buy fleet queens and they want a huge discount too.

      • 0 avatar
        highdesertcat

        I agree that new models are a huge gamble, and it is unlikely that anything from GM will break new ground, unless it is developed elsewhere, anywhere but North America.

        GM in North America simply does not have the clarity nor the capacity of thought to develop anything that most people want to buy. Most people buy anything BUT GM!

        In this respect, Ford’s got GM beat. The innovations brought to the F150 and the fresh approach with the new Fusion should prove profitable for Ford.

        Fiatsler and its subdivision once known as Chrysler simply don’t play in the same ballpark as Ford or GM, even though Chrysler products are making a very nice comeback because of the R&D provided by Daimler. The resurgence in Chrysler buyers is well deserved with models like the 300, 200, RAM and Grand Cherokee.

        The Volt was a huge gamble for GM, and it bombed. I am surprised that the Obama administration isn’t hawking this failed experiment by buying every single one GM can crank out and putting it to public use. THAT would have been TARP and stimulus money well spent!

        After all, GSA buys thousands of sedans every year for government use, as do each of the states, counties and city governments in America. To me, it seems that the Volt would have been a natural for those applications.

        And while GM’s long amortized models may have been OK in the distant past, they are long in the tooth now and way overdue for some innovation when compared to their competition.

        The downside is that GM-Worldwide needs on-going and never-ending financial support in order to keep operating. And ultimately, it is up to the buying public, globally, to decide if they want to buy GM products or if the competition is actually a better deal.

        So far, the competition has GM beat, everywhere. Hence, GM drops back and punts. For 2014 the punt includes models that are “new, improved and better than ever”.

        But this time around, if not enough people buy into GM’s “new, improved and better than ever” mantra of yesteryear, the US taxpayers will jump right in there and bailout GM again in the 2015/2016 time frame. Precedence already set.

        People who actually pay taxes should hope that it doesn’t come to this because their tax money would be better spent on much more deserving causes than a failed automaker and the UAW.

  • avatar

    Uncle Sam Shrugged…

    when baseball ends we could entice Girardi to head up European operations. Girsky and Docherty are in a worse slump than Rodriquez and should be taken out of the lineup.

    • 0 avatar
      el scotto

      GM used to be like the Yankees and win everything, every year. Then the Japanese came in and and started playing “Billyball”. GM haughtily replied that’s not how the game is supposed to be played. The game hasn’t been the same since then.

  • avatar
    iainthornton

    So some cost centres which formerly made money for GM abroad are now unprofitable and the profitable cost centres are subsidising that? Isn’t that a surprise?

    And the notion that this money is all from the US is ludicrous. The US is NOT the only country which gave aid to GM, although it was the most substantial contribution.

    This article hasn’t really told us anything more than other than adding actual figures.

    The bottom line is that GM built a lucrative business for many years through Opel and now wants to return it to profitability. In the meantime there are hurdles – this is one of them.

  • avatar
    rpol35

    The GM “quick rinse” bankruptcy and treasury buy-out was exactly that, GM in totality, not just NAO. The foreign ops. were included in the “new GM” along with a lot of NAO and that’s what was saved.

    This is no surprise at all.

  • avatar
    Conslaw

    This is just an example of how interconnected the world is right now. It’s like the old saying: “No man’s an island, but when you pee, urination.”

  • avatar
    niky

    Felt the article would have been stronger if It started in Asia and left Opel for last, as the Asian expenditures are soemthing that will pay for themselves in the long run.

    The single gigantic issue facing GM now (besides the Chinese slowdown)) is Opel. That’s something that will swallow billions more easily without returning anything of value whatsoever.

  • avatar
    wmba

    Don’t see the logic regarding Opel. It has been a GM subsidiary since the 1920s, and no American ever complained when times were better and Opel contributed to GMs bottom line.

    GM could have unloaded Opel to Magna in 2009 for $200 million. Whitacre vetoed that. So other than a head in hands “Doh!” when Opel proved to be in severe decline, I don’t see how anyone can complain about GM paying for its losses. GM owns Opel – it has to pay for it. If the US and Canadian governments had used any commonsense at bailout time, they would have insisted on the sale of Opel then. They did not, so that’s why we are paying the piper.

    Railing against US (and Canadian) bailout dollars going overseas is useless, given the circumstances.

    • 0 avatar
      Pch101

      Opel was losing money before the bankruptcy. Opel has been losing money since the bankruptcy.

      GM’s Asia Pacific operations were profitable prior to the bankruptcy, and still are.

      Two things have changed since the bankruptcy:

      -North America became profitable
      -Latin America went into the red

      TTAC readers could be forgiven for not knowing this, since this article makes it sound like something else entirely.

  • avatar
    Advance_92

    American leadership on the world stage. I’ll bet Mitt Romney likes this article.

  • avatar
    TomHend

    Hi Advance_92 Do you know what the Federal Reserve is doing right now?

    Bailing out every foreign government and bank from here to Greece.

    And not for nothing your Globalist (he is not a Democrat) Obama is going to lose, not that I care, we are too far gone to come back anyway.

    • 0 avatar
      el scotto

      I thought those chaps were in something called the European Union and the ECB took care of them.

      • 0 avatar
        TomHend

        The ECB is stuffed with our debt, mortgages, Treasuries , you name it plus derviatives of these.

        So far we have chosen not to renege, but that day is coming and we will have a funding crisis that will knock your socks off.

        GM spending money overseas does not even register, it’s a pittance compared to what the Fed is doing.

      • 0 avatar
        el scotto

        How is the Fed sending all these fiscal instruments to the ECB and how and mostly importantly where, is all this money GM is sending to the ECB?

      • 0 avatar
        28-Cars-Later

        El Scotto – This video will sum up whats happening with regard to the Fed Banking Cartel and ECB:

        “G. Edward Griffin, author of The Creature from Jekyll Island, talks about the Fed’s real role in the US economy and why – contrary to common belief – it is not this banking cartel’s mission to act in the best interest of the American public.”

        http://www.zerohedge.com/news/2012-10-10/guest-post-feds-sole-purpose-keeping-banks-afloat-g-edward-griffin

  • avatar
    vanpressburg

    GM is sending huge money to Europe Union, because if Europe Union goes down now, Obama will lose election.

    • 0 avatar
      el scotto

      I didn’t know people in the European Union were registered to vote in the US. How does GM have enough money to bailout the PIGS. Primer: http://news.bbc.co.uk/2/hi/8510603.stm, new shorter: http://www.mbaskool.com/business-articles/finance/1473-all-about-pigs-european-debt-crisis.html

    • 0 avatar
      corntrollio

      For the love of Satan, could we have one GM thread without inane theories on Obama that have no basis in fact or logic? How little do you have to know about economics and politics and any number of other things to make a comment like this one?

      • 0 avatar
        28-Cars-Later

        I can agree with you on cutting down on the overall abundance of Obama-esque posts, it does get old. However there is nothing inane or inaccurate about his statement. Politicians in the US, Europe, and most likely everywhere else will sell out you, your children, their countries and their mothers in order to keep their lofty positions of power, its just that simple. They and central banks have to keep the system going and will do so by propping up each other, at the expense of your savings and currency. Do your own research if you disagree and then please present evidence this is not what is happening, I would love to hear it.

      • 0 avatar
        corntrollio

        28-Cars-Later, are you seriously telling me that GM will be able to eliminate up Europe’s debt problem and that GM’s actions in magically shoring up Europe with diesel unicorns will magically get Obama elected? I’m not the one making the inane claim, vanpressburg is, and it’s his/her burden to back up something as ridiculous as this on its face.

      • 0 avatar
        28-Cars-Later

        GM is only part of the equation, but I think its safe to say an Opel, Fiat, and/or PSA liquidation at some later date could set off a powder keg in relatively stable (to Greece) economies such as Germany, France, and aggravate damaged ones in Spain (Opel plant) and Italy (Fiat). Bailing out GM at home, in effect helped subsidize its failing operations in Germany and then operations in Sweden. You could also make the argument the Fiat-Chrysler deal was a partial bailout to Fiat, because even if Chrysler had still kicked, Fiat was given $1.3 billion for its trouble and could auction off the Chrysler pieces to the highest bidder.

        The big show here is keeping the failed EU and its Euro funny money afloat through Fed intervention and ECB printing. Read ‘Currency Wars’ by James Rickards for more insight into this.

      • 0 avatar
        Pch101

        “How little do you have to know about economics and politics and any number of other things to make a comment like this one?”

        There is a certain percentage of the population that goes out of its way to be completely misinformed. A fair number of those people end up in the TTAC comment section.

        Just a thought, but if one finds it necessary to go to dubious sources such as ZeroHedge or Breitbart to “prove” one’s point, then the point probably wasn’t worth making. People who rely upon third-rate blogs for their information end up knowing less about the world than those who read nothing. At least the people who read nothing get to avoid having their minds filled with nonsense, which is an improvement over dipping one’s head into a vat of factual excrement.

      • 0 avatar
        28-Cars-Later

        Please present facts to the contrary, just ensure they aren’t from fictitious sources such as the Onion or the New York Times.

      • 0 avatar
        Pch101

        What’s next, do I have to write a rebuttal to Mein Kampf to prove that it’s a load of crap?

        Why should I waste time writing a rebuttal to every lame, poorly research hyperbolic hunk of drivel that ends up on the internet?

        If you want to believe crazy things, then you’re going to believe crazy things. There isn’t a thing that I can do about that, since you want to believe crazy things.

        Well-informed people read credible sources and skip those that aren’t credible. Just because some nutbar writes stuff with a pen name taken from “Fight Club” doesn’t mean that I need to pay attention to it. There is an abundance of better stuff to read that can actually teach something that’s worth knowing.

      • 0 avatar
        28-Cars-Later

        “Why should I waste time writing a rebuttal to every lame, poorly research hyperbolic hunk of drivel that ends up on the internet? ”

        But that is what YOU do on this website, sometimes with great insight and bravado, sometimes not. Very easy to hide behind wit or sarcasm, to bemoan what is ‘credible’ and what is not in order to refute what you cannot explain or understand.

      • 0 avatar
        Pch101

        “Very easy to hide behind wit or sarcasm”

        I am not being sarcastic.

        You cite lousy third-rate melodramatic blogs as “sources”. If you understand the subject matter, then you wouldn’t do that.

        Large chunks of the internet are devoted to nurturing the ignorance and paranoia of poorly informed, ignorant people. No one reasonable person could possibly rebut all of that bilge, since there is far too much nonsense to which to respond.

        Go read better sources. If a guy needs to use vapid overly dramatic terms such as “cartel” to explain how a central bank operates, then you should ignore him and go read something better. Trying to learn about the world from paranoid and delusional people just isn’t a smart idea.

      • 0 avatar
        el scotto

        @ Pch101 I’d make it real easy. Anyone who espouses the New World Order, Zionism, Federal Reserve chicanery, unseen and unreported financial cabals, information cabals, or what the world government really does cabals would have their avatar replace with one of Dale Gribble. http://www.youtube.com/watch?v=enBllfqkMEw

      • 0 avatar
        corntrollio

        “There is a certain percentage of the population that goes out of its way to be completely misinformed. A fair number of those people end up in the TTAC comment section.”

        That much is clear, pch. Still waiting on 28-Cars-Later or vanpressburg to explain how GM is taking the role of the ECB and Merkel in fixing the crisis on the continent all in a giant conspiracy to get Obama elected.

  • avatar
    el scotto

    I don’t know who said it above but I thank my lucky stars GSA “stripper” cars come with AC, FM radio, and usually a CD player.

    • 0 avatar
      highdesertcat

      Yeah, my daughter-in-law drives a GSA stripper almost daily in the performance of her duties and many of them are much nicer than her own car.

      GSA cars have all the amenities like Automatic transmission, AC, Cruise Control, Power Steering, Power Brakes and Power Windows, AM/FM/MP3/CD radios. And they are very well maintained right down to the tire pressure, before they are released to a driver.

      What’s not to like? Best of all, the gas is free because the taxpayers are paying for that. No wonder so many people run their own errands in them before returning them to the motor pool.

      • 0 avatar
        el scotto

        @HDC Good to hear from ya, how’s teaching going? I don’t know how the Air Force did things but the Navy had some nasty GSA vehicles in the mid-80′s.

      • 0 avatar
        highdesertcat

        Hi el scotto, teaching is going great. I am highly impressed with the adult students of this day and age in pursuit of higher education, especially the young Army and Air Force Active Duty Officers going for their MBA. One of the courses I teach is a senior-year, graduate-level requirement for an MBA.

        The other, undergraduate, course I teach mostly has young adult men and women going for a Bachelor of Science in Business Administration, with many of them being recently discharged ex-military and on the VA College Assistance program.

        I actually try to use real-life examples in my course curriculum and among them I have used examples of the Global auto industry as well as the trials and tribulations of corporate giants like Wal-Mart and GE.

        The most fun case study was Dunkin’ Donuts and the team that presented the case study brought 24 Dunkin’ Donuts to class at 5pm. The donuts were gone in no time.

        But, back on topic, we, in the Air Force, rarely used GSA vehicles for the military side of the house but the civil service side used GSA almost exclusively.

        When Carter cut back on the military during his tenure, those of us who went on TDY or TAD were authorized a rental vehicle reimbursement, or cab/taxi fare reimbursement, as long as we had receipts and the cost didn’t exceed the GSA rate.

        Most of us who traveled for duty ended up renting, filing travel vouchers for reimbursement, waiting 60 days or more to get reimbursed and then finding out we were only getting about 75% of the cost of the rental reimbursed.

        And for the senior guys like me who rated private rooms/quarters, we were only reimbursed about 80% of the cost of lodging and none of the food costs because we already drew BAS.

        So, in many cases getting a GSA vehicle and GSA lodging or on-base TLA lodging was what we all preferred, no matter how ratty a car or room was.

  • avatar
    blowfish

    i suppose Europe per se had not been a good thing for GM, Opel and the previous nupital with FixItAgainTony , a total raw deal for GM.
    if GM had ditched Europe 10 yrs ago, perhaps she wouldn’t be in such a bad shape.

  • avatar
    acuraandy

    See guys! Told you so; I might just be an ‘idiot grease monkey’ but i’ve been stating these points for years. Tyler, thank you!

    • 0 avatar
      sunridge place

      What have you been saying for years and what did Tyler write that proved it?

    • 0 avatar
      acuraandy

      @sunridge:

      Oh boy, here I go…

      In the 80′s when AMC was sold to Renault, it was, well, a marriage made in the depths of hell. When the French nationalized Renault realized that AMC was a basketcase, it decided to dump it. To…Chrysler!
      Chrysler took the shell that is Jeep was and ran with it. It then turned AMC into a marque brand (i.e. rather hypocritically, ‘Eagle’) with Imported from Japan parts.

      Anyone born in the past 30 years knows how that all went down.

      According to wikipedia, ‘On March 9, 1987, Chrysler agreed to buy Renault’s share in AMC, plus all the remaining shares, for about US$1.5 billion (US$3,068,541,301 in 2012 dollars[8])’

      Problem was, back in 2009ish, there were no entities with capital that WANTED GM or Chrysler, notwithstanding their legacy costs/other liabilities.

      Case in point, if the business model existed, there would’ve been either a private equity firm (i.e. former Pentastar owner Cerebrus) or other automaker that would’ve been interested in buying outright either corporation, and that did not happen for a reason.

      Hence, Chrysler had a ‘shotgun wedding with Fiat’, (verbatim quote from Barack Obama circa 2009) and GM became owned in a majority stake by the US and Canadian taxpayer.

      In the ‘Reagan era’, one could only have imagined what the populous had done if AMC had been ‘bailed out’ by the taxpayer. Maybe we’d be driving 4th or 5th-gen AMC Eagles? Now there’s a thought, Subie would have their work cut out for them, as the Eagle was the first AWD ‘car’ built for US/Canadian consumption. (Although by the EPA it was classified as a ‘light truck’)

      And don’t even get me started on the George Romney angle…leaving the whole ‘Mitt put a dog in a kennel on the roof of a ’72ish Ambassador wagon for a drive’ out of that argument :)

      GM, Fiatsler and AMC’s situations (‘bailout wise’) are very much so analogous.

  • avatar
    Domestic Hearse

    This. It’s why we can’t have intelligent discussions on TTAC. A perfectly good illustration of Godwin’s Law of Internet Discussions (substitute “financial conspiracy” for “Nazi,” and you get the idea).

  • avatar
    Iambic PentaMaster

    Obama Fluke Woman

    Obama Phone Woman

    Obama Car Guy

    Where does government dependency end?

  • avatar
    FRANKOK1

    The feds are buying Volts but did GE’s Inmelt renege on his deal from Obama he got on Volts and making the charging systems. Since Gov. Motors is selling in China maybe the CHICOMS will buy them.

    From Forbes DOT com 3/16/11
    Recently, President Obama selected GE CEO Jeffrey Inmelt to chair his economic Advisory Board. GE is awash in windmills waiting to be subsidized so they can provide unreliable, expensive power. Consequently, and soon after his appointment, Immelt announced that GE will buy 50,000 Volts in the next two years, or half the total produced. Assuming the corporation qualifies for the same tax credit, we (you and me) just shelled out $375,000,000 to a company to buy cars that no one else wants so that GM will not tank and produce even more cars that no one wants. And this guy is the chair of Obama’s Economic Advisory Board?
    AND excerpts from nlpc DOT org
    2/27/12
    Crony corporation, General Electric, claims it is buying 12,000 Chevy Volts and forcing all employees to drive them so that they can save money. Really? Does anyone believe that GE is spending about $480 million to save $2 a day in gas for each vehicle? GE has also told employees that they can run the cars on gas only, further evidence that GE’s decision to buy Volts is a blatant example of crony capitalism.
    How technologically advanced is a car that has a power source that takes 12 hours to charge only to have the capacity of one gallon of gas? And why are taxpayers footing the bill?

  • avatar
    The Patriot

    YOU ARE SO FULL OF IT DUDE! HAVE SOME SHAME.

  • avatar
    mmilesll

    GM will bail out yet again. The same bunch of idiots and union thugs are still running the place. I am not surprised at all

  • avatar
    analoca

    “GM has run into several tax assessments in South America, including a $292m assessment for the years 2002-2004 by the Mexican government and a $180m assessment for 2007 by the Brazilian government”

    While it is clear that Brazil in located in South America, it should also be clear that Mexico is not. If you look at the American continent, Mexico is clearly in North America…

  • avatar
    Oldtimer

    General Motors should have been allowed to die and go to the corporate dustbin. The past 90 years of US history would have been better had GM died at birth. Their sins are many including bribery, mob connections, destruction of the US interurban electric lines, the demise of the steam locomotive, corruption of government on all levels,the paving of our cities with freeways, unsafe products the list goes on and on. They exemplify the worst of corporate America for the last 90 years. Albert Sloan should have died at birth and MIT should be burned to the ground for teaching him how to destroy America.


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