Bailout Watch 570: Your Tax Dollars At Work Overseas

Edward Niedermeyer
by Edward Niedermeyer

We do have the ability, if it’s necessary, to provide support directly, but again that’s only if necessary… We are able to run a global business

GM CEO Fritz Henderson in the Detroit Free Press, explaining that GM is allowed to spend US -government bailout money on overseas operations, in this case, Opel. According to the Freep’s paraphrase of Henderson, “the terms of the prebankruptcy loans and the new government financing are different.” So why did GM insist just weeks ago that it wasn’t allowed to spend US taxpayer money on a $413m Daewoo rescue? Has GM been shuffling bailout cash to mismanaged overseas operations? Or would an Opel rescue mark the first time this had happened? In any case, wasn’t GM saved to prevent disaster in the US economy rather than stop job loss overseas? The unintended consequences of bailout keep marching on… and so will our search for answers to these questions.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Join the conversation
  • Steven02 Steven02 on Nov 10, 2009

    Can you point me to a link where GM said it couldn't send the money over? I have seen it quoted here in articles, and by the third party bank, KDB, in your TTAC link here. But nowhere have I seen GM say that. After the GM bankruptcy, GM was allowed to send money overseas. Before the bankruptcy was completed, it was not allowed to do so. Not that I agree with sending the money over, but all of the bank bailouts did this. From a business standpoint, it would be hard for GM to survive by not allowing them to spend the money abroad like any other global company. In that case, bailing them out makes no sense at all.

  • Psarhjinian Psarhjinian on Nov 10, 2009

    Well, you could play the race card and say the GM wasn't allowed, by convention (though not law) to spend US tax dollars in a non-white nation. I say this tongue-in-cheek, but I do think there would be far more to-do about spending in Korea or China versus Canada or Germany, and that, if you scratched the complainants, race would play a part.