Bailout Watch 536: GM Draws an "Extra" $2 Billion Pre-C11
Bloomberg reports that General Motors drew $2 billion more than previously announced, feeding the cash burn raging amongst the company’s embers (or something like that). May’s federal payout brings The General’s monthly total to $4 billion. Not including the new $7.5 billion payment heading to its former captive still current lender GMAC. Which is on top of the $5 billion already propping-up the eleventh hour bank. And the $1 billion given to GM earmarked GMAC. Anyway, re: today’s $2 billion overdraft, GM is characteristically contrite. “Today’s loan draw is higher than the amount forecasted in the April 27, 2009 S-4 Filing for the Bond Exchange Offer and reflects updated timing of when certain expenses would be incurred. Total U.S. Treasury funding received by GM to date is $19.4 billion.”
Anyway, as ailing American automaker heads for its so long and thanks for all the fish where’s the sushi bar moment, may the Lord make them truly grateful for your contribution to the cause. And so He has. “We appreciate President Obama’s and his administration’s ongoing support of GM and the domestic U.S. auto industry as we undertake the difficult but necessary actions to reinvent our company,” GM said in a statement confirming the borrowing. “We will continue to work closely with members of the President’s Auto Task Force throughout our restructuring and together we will continue to monitor our liquidity needs during this period.” Amen.
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When the absurd becomes commonplace, madness is never far away.... http://www.realclearpolitics.com/articles/2009/05/20/the_ground_shifts_under_the_auto_industry_96590.html
Funny way way back a little over six months ago the first few billion were hotly debated. The public was overwhelmingly against it, while the politicians said, sure. They said if we didn't give them free money they would go bankrupt. Now there is no debate and no coverage. A few tens of billions more. Here you go. Plenty more where that came from. Infinite more where that came from. Week after week after week.
This report calls this a "loan" and GM refers to it as "borrowing". So does this mean it will be paid back or can we add this money to the 15-20 some billion we will never see again? From what I have been seeing lately "loan" and "hand out" now mean the same thing.
It is an interesting question what giving all this money to GM and Chrysler is going to end up doing to Ford and other manufactures? Already Chrysler has to be selling cars below their cost of production just to move them, when in reality the government is making up the difference. This really creates unfair competition and is going to damage all manufactures in the end. However I'm sure that the current party in control could care less as a crisis creates great opportunity to do whatever they want to do.