By on December 16, 2009

How soon we forget... (

“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.

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11 Comments on “Bailout Watch 576: Whitacre Keeps GM’s Payback Lie Rolling...”

  • avatar

    Nice quote… pass this along to Colbert and perhaps he can get Lutz back on the show and read the quote to him.
    Regarding GM paying any money back, I wonder how they’ll scrape together $6B by then.  AS for the rest of the money, just thank your elected officials and the O administration for that.
    I wonder what other things could have been done with $50B?

  • avatar

    A question from a Canadian.
    Do the banks that got money from the US govt. have to pay that back?

    • 0 avatar

      Yes… and no.  It was kind of the same setup that GM got actually.  Some of it they owe back in cash, and other parts were turned into equity.
      Other banks had similar arrangements.

    • 0 avatar

      Most of them have… Citi and GMAC are notable exceptions. According to Treasury Secretary Tim Geithner’s recent testimony, only Chrysler GM and AIG are expected to come up short of full repayment based on projected economic performance.

  • avatar

    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.

    • 0 avatar

      Certainly not, but they might make an effort to put out press releases that show some resemblance to reality.

    • 0 avatar

      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.

  • avatar

    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.

  • avatar

    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!”

  • avatar

    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.

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