Quote Of The Day: Ed Whitacre's Big Lie Edition

Edward Niedermeyer
by Edward Niedermeyer

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.

Edward Niedermeyer
Edward Niedermeyer

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  • Steven02 Steven02 on Jan 11, 2010

    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.

  • Lw Lw on Jan 11, 2010

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

  • DweezilSFV DweezilSFV on Jan 12, 2010

    +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

    • See 1 previous
    • Twonius Twonius on Jan 14, 2010

      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.

  • Christy Garwood Christy Garwood on Jan 12, 2010

    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.

    • ASISEEIT ASISEEIT on Jan 15, 2010

      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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