Bailout Watch 576: Whitacre Keeps GM's Payback Lie Rolling

Edward Niedermeyer
by Edward Niedermeyer

“We intend to pay the debt,” GM’s CEO Ed Whitacre told reporters yesterday. “We’ll be finished by June.” Except that nothing has changed since we determined that GM is “taking taxpayers for a ride.” Here’s what he should have said:

By June we intend to return a small percentage of the taxpayer assistance that rescued this company from sure liquidation. GM will need to achieve an unprecedented market cap valuation at an eventual IPO in order to truly repay taxpayers for this second chance, and I will not rest until we clearly and honestly achieve that goal. Until that day comes, please refrain from printing misleading headlines like ‘GM To Repay Loan By June,’ as these imply that we are able to make the taxpayers whole when, as an unprofitable company, we have no such ability. Thank you.

Edward Niedermeyer
Edward Niedermeyer

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6 of 11 comments
  • Steven02 Steven02 on Dec 16, 2009

    Whitacre didn't negotiate the deal. It was done before he got there. This was a similar deal to what the banks received, some back in cash, some in equity. Lastly, I don't think GM is in any position to ask the media what to print and what not to print.

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    • Steven02 Steven02 on Dec 16, 2009

      @fincar1 While GM was given more much than it will likely pay back, the reality is, GM owes 6.7 billion to the gov't, and the gov't owns 60% of the company. It will be interesting to know the final numbers on the cost of this once Liquidation Motors is sold and the IPO occurs, both before tax revenues and after.

  • FishTank FishTank on Dec 16, 2009

    You guys have it all wrong! When he said "We'll be finished by June.", he was talking about GM as a company, not repayment.

  • DetroitsaRiot DetroitsaRiot on Dec 16, 2009

    Maybe they should take whats left of our tax money and buy back all of the profitable Divisions they sold off (at a discount) in order to "save" the Automotive part (they threw the babies out and we took the bath). Allison, Hughes, Electromotive Diesel, etc. Shrewd business moves that would make Gomez Adams proud : " I took a thriving railroad and in 6 months, ran it into bankruptcy!"

  • Mikedt Mikedt on Dec 16, 2009

    Part of me thinks they will pay back the money. And the only reason being that until they do they can't give their exec massive amounts of compensation. Look how fast Wall Street is giving back TARP money so they can go back to awarding billions in bonuses.