By on January 11, 2010

Yuk it up... (courtesy:DetNews)

It’s a bit early in the day to be crowning a QOTD, especially considering there are sure to be plenty of juicy quotes coming out of the NAIAS today. Still, this one deserves a special place at TTAC for the sheer bold-faced shamelessness of its untruth.

I think (the government bailout was) well placed, and I think they’ll make a lot of money. GM’s on its way back. We’ll be back. The government’s made a good investment. We appreciate their support. We’re glad they’re here.

So said GM Chairman and CEO Ed Whitacre to reporters from the Detroit News today. As I recently explained in an op-ed in the NY Times, unless GM’s market cap soars to its highest level in history (a pipe dream if ever there was one) the taxpayer losses on the GM “investment” will be in the billions. Even the government estimates losses on the GM and Chrysler bailouts to reach $30b. Whitacre surely meant that a GM IPO will generate some kind of money for the Treasury’s 60 percent stake in GM, but the way it came out makes it sound like the bailout will be a positive investment for the government. That’s an impression that GM desperately needs to foster in order to have a chance at emerging from government control. Too bad it’s just an old-fashioned fib.

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16 Comments on “Quote Of The Day: Ed Whitacre’s Big Lie Edition...”

  • avatar

    “Lie” is a little harsh.  Though what Ed said was certainly a type of deception in the form of an untruthful statement, especially with the intention to deceive others, often with the further intention to maintain a secret or reputation, protect someone’s feelings or to avoid a punishment or repercussion for one’s actions.

  • avatar

    The government does not make investments; they create expenses.  

    A car depreciates and you hope it returns sufficient value while you have it to have been worth the expense.  However, you would not call it an investment, strictly an expense. 

    Government programs generally cost money to do things that (in a perfect world) need to be done, but they do not return a profit.  Therefore, they are expenses, not investments.  It is hoped (foolishly IMHO) that they will return sufficient value to have been worth the expense.  If a cost/benefits analysis were done of the stimulus, CFC, bailouts, etc., no investor would put a dollar into it. 

  • avatar

    I agree- you’re too harsh with ol’ Ed.
    He’s a government employee. What do you expect…?

  • avatar

    Now where is that flying pig cartoon I saw earlier?

  • avatar

    I suppose it’s true in the sense that if the government didn’t bail out GM and Chrysler they’d have had to pay even more to bail out the pension guarantee trust fund.

  • avatar

    “Lie” is a little harsh.
    Considering the sheer level of gross incompetence over 4 decades of GM management, it’s simply not possible to be ‘harsh’ with GM using normal printable language.  In consideration of this:
    So said GM Chairman and CEO Ed Whitacre to reporters from the Detroit News today. As I recently explained in an op-ed in the NY Times, unless GM’s market cap soars to its highest level in history (a pipe dream if ever there was one) the taxpayer losses on the GM “investment” will be in the billions. Even the government estimates losses on the GM and Chrysler bailouts to reach $30b.

    …there should be public outrage at the whole bailout farse. Whiteacre is a liar as was Henderson and Wagoner before him. The latest in a long line of them and in all likelyhood, not the last. In fact almost everything that comes out of GM’s PR machine is outright lies or just plain BS.

    • 0 avatar

      It’s farsically consistant with almost every economic decision made by our Goldman Sachs run govt(s) in 2008 and 2009.  Why should the GM bailout be any different than Ins Co, or bank bailouts or the failed stimulus in general?

    • 0 avatar

      SKCUSMG—-Hey here’s something that I watched last night on our local PBS station that will reinforce everyones understanding of  G.M.’s  history of a complete lack of coherent management and their obvious downward/backward suicidal race!! This documentary is called “Who Killed The Electric Car?” This is a history of G.M.’s EV1  among other electrics in our history. I believe you can find it on the web on Google Video! Check it out, but it might make feel like regergitating.

  • avatar

    While we are on the topic, any idea about how much money would have been lost if GM did go chapter 7?  How about the taxes from the people it employees?  Or the sales taxes from the cars that are being sold?  When GM turns a profit, and that is taxed, what will it do then?
    So, in 5 to 10 years, this could be a good investment for the gov’t.  Remember, as much as we are taxed, the IPO is only the beginning of the pay back to the gov’t.

  • avatar

    This is sooo cool…
    Ed is paying back all the GMAC money and anything forgiven during the bankruptcy…  With Interest!!!

  • avatar

    +1 lw

    Just re-read Edward’s quote: that IPO won’t even be a start to “pay back”.

    It’s fantasy to believe that any tax revenue from GM’s “profits” will ever make it to pay back the government. They have to make a profit first and you don’t do that putting $4o00 on the hood of every car you sell.

    And since the last time GM made any money on it’s automotive operations[ rather than it’s mortgage finance arm]was, oh I don’t know, 2001-2002, I’d like to see the evidence that this magical thinking has any chance of becoming reality in even 5-10 years. A stretch even for the GM fan boys to make.

    Especially since nothing has been said about the bail out money benefitting the buyers of GM’s cars with higher quality and more desirable products. All we’ve heard is  what’s good for GM and the UAW. Screw the public. Just shut up and keep paying the bills.

    Whitacre: liar. Perfectly apt use of the word. Profit and pay back to the US taxpayer: never going to happen, as EN so clearly pointed out

    • 0 avatar
      Christy Garwood

      Ask any buyer of a new Buick LaCrosse, Chevy Equinox, Chevy Camaro or Cadillac SRX if their ride is desirable and has high quality.  I bet they say YES!

      Please go back and review the GM Viability Plan that was filed with the public BK paper work. It describes how GM will make a profit. It has to do with erasing original, private debt from the books, transferrring UAW health benefit liabilities into the VEBA account, and having an 18% market share in a 10 – 11 M SAAR market.  And where do you get the info about GM putting $4000 on the hood? I like facts, so please show me.

      As for profit back to the US TAXPAYER, I don’t think Ed used those words.

      The US Treasury ‘printed’ money to bail out banks and two auto OEMs. That money was loaned to the US by the Chinese government. IMO, we taxpayers haven’t been tapped yet.

      Ed says that he thinks the governmnet invested wisely, not that the government will make a profit on the investment.  Looks like an opinion to me, not a statement of falsehood.

      Yes, I work for GM, and these are my own opinions.

    • 0 avatar

      You’re right the US borrowed the money it gave to GM, but  we’re definitiely on the hook for what they can’t pay back.

  • avatar
    Christy Garwood

    As a Cadillac-GMC-Buick-Chevy employee speaking on my own, don’t forget how many state governments would be in deficit spending modes if Chrysler and GM were not bailed out. The cost of all those unemployment checks for all of the suppliers and mom-and-pop service businesses around the plants/ offices in addition to the big OEMs would be staggering. Instead of losing just 7 million jobs in the past two years, the US would have lost 10 M, probably.

    • 0 avatar

      I don’t believe “Most” people want to see G.M. go down the toilet, especially employees and retirees. I also believe there were scores of concerned critics(some insiders)sounding the warning bell(for years) trying to let G.M. know they were heading for a cliff but in their obvious arrogance at the top they continued on their path, or was this done on purpose? Take the company down to rock bottom discard retirees, thrash management employees, and restrain the union!!  “Now we’ll start to build vehicles people actually want”! I don’t know if you’re union or management but you had better save as much money as you can and I hope you live in one of the smaller towns G.M. still does business in because your money will go a hell of a lot farther. I put in over 30 years and am starting a new career. You should have a back-up plan. When union wages and benefits match non-union wages and benefits in the trans-plants the foreign trans-plants will start to drop their wages and once again there will be pressure about competition and to lower total compensation. Let’s face it America can’t compete with slave wages in other countries at both the labor and professional levels. 

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