Bailout Watch 571: How GM Won't Pay Off Its Government Debt (But Will Try To Make You Think It Did)
According to GM’s 3rd Quarter financial results announcement:
GM plans to repay the United States, Canadian and Ontario government loans in quarterly installments from escrowed funds, beginning next month with an initial $1.2 billion payment to be made in December ($1.0 billion to the UST and $192 million to the EDC), followed by quarterly payments. Any escrowed funds available as of June 30, 2010 would be used to repay the UST and EDC loans unless the escrowed funds were extended one year by the UST. Any balance of funds would be released to GM after the repayment of the UST and EDC loans.
Though this sounds like positive news, don’t let it fool you. GM’s financials only acknowledge $6.7b in government debt, a sum that barely scratches the surface of the taxpayer “investment” in The General (let’s use $52b as a baseline). The escrow fund in question contains $13.6b of the final $30b GM was given as it exited bankruptcy. Having burned through nearly half of that princely sum, GM now plans on using at least part of the rest to pay off the “outstanding $6.7b.” The escrow account expires in June 2010, at which point whatever is left unpaid of the $6.7b will be returned to the government, and GM will keep the rest. GM will then declare victory and pretend like it has squared up with the tax paying public, when in fact the public will have merely paid itself back a paltry fraction of what GM actually owes. This “repayment” will then be dutifully reported without question by the mainstream media, and the stain of bailout will be symbolically lifted. Except, of course, it won’t. GM and the government are playing a classic shell game, taking advantage of the public’s inability to keep the billions straight. Shameful.
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- Crtfour If I could afford and was in the market for something like this, I'd be one of the ones to just go get a Range Rover instead (and possibly have money left over?) instead of a union assembled GM vehicle. But it's cool that something like this exists in this day and age.
- Analoggrotto Such an awesome vehicle to hire remove the third row , fold the second row, hire a driver and have a 4 some w/ Mary Barra, Hilary Clinton and Michelle Obama at 165 mph around Talladega. And that would be my idea of Wrenched Excess: Caligula 2023.
- IH_Fever Cue the "it's not what I want, therefore you don't NEED it" crowd...
- Tassos Nobody with any GOOD TASTE would either need OR WANT such a RIDICULOUS breadvan on stilts. Especially the laughable "V" version.
- ToolGuy Here is a slightly more expensive one.