GM, Pay Me My Money Down

Bertel Schmitt
by Bertel Schmitt

Reuters says GM is making a big deal out of sending a $1b check to the U.S. Treasury next Wednesday, “attempting to settle the loan with the government ahead of schedule.”

Who are they kidding? Reuters rightly points out that last November, “GM had said it would begin making quarterly payments in December of $1.2 billion to the U.S. Treasury and the governments of Canada and Ontario.” This coming Wednesday, the quarter is up and it’s time to feed the beast, boys.

GM “was given $50 billion of government financing to restructure in a bankruptcy steered by the U.S. Treasury, which remains a 61 percent owner of GM stock,” as Reuters reminds us. So if they keep up those quarterly payments, it will be 42 quarters, or 10 years, more or less.

Wait, we forgot the interest! Could the green eyeshade contingent please calculate how long it takes to pay off a $50b loan with $1.2 quarterly payments, at a generous prime rate of 3.25 percent?

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6 of 23 comments
  • Bryan Scholtes Bryan Scholtes on Mar 26, 2010

    "I thought your policy was 'Works on Consignment No Money Down" No, it is 'Works on Consigment? No. Money Down!'

  • Jkross22 Jkross22 on Mar 26, 2010

    How much are late fees? There's 3.25% interest and what happens if they're a day late? AMEX charges $39 and Discover is $49. How much does Uncle Sam charge in late fees? Perhaps they should just use the standard IRS schedule for sending in late tax payments. Seems just, no? But then, when does justice enter the discussion where GM is concerned?

    • See 1 previous
    • Jkross22 Jkross22 on Mar 26, 2010

      It would be telling to see what an actual bank would charge GM for a line of credit. Methinks it's somewhat higher than 3.25%.

  • Geo. Levecque Geo. Levecque on Mar 27, 2010

    I agree about the Interest, most people and Corporations too like to forget that fact of life, So GM will stay owe a lot and the 700 or so Jobs recalled here in Ontario won't matter in the long run, I also agree that the cost of Petrol will be soon heading a way up and yes its too bad they didn't use this time frame to make a smaller vehicle that would last much longer for the Workers employed in Oshawa and at other Canadian Plants, I wonder what the UAW thinks of this? I don't think they will think too kindly at this development as they are not employing laid off USA employees!

  • George70steven George70steven on Nov 24, 2010

    While we have more work to do, GM is building high-quality, award-winning vehicles, our direction is clear and our plan is working. Goldman does the IPO and holds a few shares to give the illusion that big investors are behind GM. online car insurance quotes