• Oct 28th 2008 at 4:01PM
  • 57
In the latest development of The Incomprehensible Union, General Motors is reportedly asking the U.S. government for $10 billion -- on top of the $25 billion loan approved recently -- to help it merge with Chrysler. The supplemental infusion would give the government, i.e. you and me, a stake in the merged company in the form of preferred stock, would see the government taking over pension obligations and provide a credit line for operations.

The government is weighing the request since it's likely that no federal official wants to be on the watch that saw the instantaneous vaporizing of two American icons and hundreds of thousands of jobs. The government has asked that as many jobs as possible be spared, and GM said "Sure!" Yet for a merger where cost savings and redundancy elimination have been the headlines, we don't know why anyone believes GM-Chrysler wouldn't jettison a whole bunch of the 11 brands, 10,000 dealers, and 100,000 union jobs. And that's just for starters.

Which is one of the (many) reasons we still don't understand the GM-Chrysler union. The additional $10 billion we can swallow -- after all, the government spends much more than that on projects that could be considered far more dubious than trying to save an astronomical number of jobs and businesses. And we know what Cerberus gets from the deal. We'd like to find out what the GM guys see that makes this merger attractive... other than the fact that Chrysler has $11 billion in cash.

[Source: Reuters]

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    • 1 Second Ago
      • 6 Years Ago
      'The Big Three" becomes "The Big Two" now hooked on unlimited billions of taxpayer money with no incentive to get up and do anything except score more free money.

      We should all congratulate ourselves, we've made the biggest "crack head" is history.

      Can't wait until GM/Chrysler and Ford merge into "The Big One" and ask for an outright trillion cash grant, not a loan.
      • 6 Years Ago
      Stop being a dumbass, the bailout didn't go into the bankers' pockets, the point was to stop regular companies from going bankrupt because the banks stopped loaning money (to avoid bankruptcy themselves from bad loans). If anything the government should have started the bailout earlier with Lehman brothers and prevented the chain reaction that occured because of Lehman's failure. The entire bailout is to stop the credit markets from freezing and screwing up every single company that uses credit (which is basically every single company in the midwest, in the northwest, in the southwest, everywhere).

      The whole reason why GM and Ford need government loans is because banks aren't lending to them, because the credit markets are frozen.

      But at least the banks are more likely to pay us back versus GM. Do you really think GM is going to be paying us back this 10 billion? From what? Their nonexistent profits?

      For example, AIG pays 11% interest on it's loans from the government and is selling off it's assets to repay it. Even if GM sold off all it's assets it's huge liabilities make it impossible for there to be any money left to pay off it's bailout cash.

      The only way this bailout can even vaguely work is if they fire off the retards in charge at GM and put in some new management, and the government would have to retain real non-preferred shares. At least then we might have a chance at recouping these bailouts. What Wagoner wants is basically us to write checks to stop GM from drowning for another couple of years so he can keep getting his $15 million a year.

      So tell me, why are we loaning money to companies that probably can't repay their loans?? It only makes sense to bail out businesses that will someday recover and be able to PAY US BACK. Giving money to a doomed business is just throwing money into a black hole.
      • 6 Years Ago
      Guess that whole laizzes faire thing went to hell pretty quick.
        • 6 Years Ago
        @ Boxer, by "let die" i meant stay on the sidelines, do not give these companies any bailout money, let markets work.

        Not giving a bailout will result in death of weaklings.
      • 6 Years Ago
      What a shame ! GM
      • 6 Years Ago
      I'd be more in favor of giving GM the money if they weren't buying Chrysler. Why give them money to put another big American company out of business?

      Chrysler is likely a goner either way, but I don't see why taxpayer money should be used to push them into the grave more quickly.
      • 6 Years Ago
      10 billions? That's how much we spend in a week on shooting donkeys and pigeons (and occasionally kids with their grandparents) with high-tech pricey equipment in Iraq. If it is a small price to pay for a few politicians publicly lying to the rest of the world about the motives, it is also a small price to pay for saving an entire sector of the economy.
      • 6 Years Ago
      Couldn't have said it any better myself
      Thank You Gabagool...
      • 6 Years Ago
      Dear GM:


      The Already Penniless Taxpayers of America
      • 6 Years Ago
      Why worry about a presidential candidate being a socialist when socialism is alive and well under our current administration? Sure, let's give poor old GM a break.
      • 6 Years Ago
      I hope GM sees some sort of customer backlash from this. Your tax dollars bail out this failed company and for what, so they can start selling their cars to you at full MSRP again? I don't care how much you like their cars, Id tell them where to shove it from now on.
      • 6 Years Ago
      I'm at a loss here with you blind believers - burn me once shame on you, burn me twice shame on me... that is GM/Ford/Mopar to a lot of its former customers (like me). Back up your junk and take care of issues or I shop elsewhere. You expect us to come back for more pain to buy your new products? NO THANKS!, now you want to grab my wallet from my back pocket to keep your plasticy inferior cars on the market? NO THANKS! If this package goes through - I'll never buy another welfare auto made car from you ever. "But our quality has imporved" - to little to late, NO THANKS! Maybe an apology to all the customers you've F@#$ed over in the past might be a good start - send them a postcard and make it right.
      From a former GM/Mopar customer... now a US/Japan buyer... go figure - same labor force but different Management? You reap what you sow...
      • 6 Years Ago
      We are continuing to socialize risk and privatize profits. If GM made a profit, would the taxpayers be given a cut (beyond ordinary taxes)? Hell no.

      These "bailouts" are horribly dangerous. British Leyland anyone? Politicians will be able to practice an industrial policy and decide who survives and who goes under in any given segment. Is it coincidental that a goldman guy (paulson) bails out goldman and lets lehman die?? Capitalism only works when bad decisions are punished, across the board.

      How long before the gov't decides that toyota or honda are the real problem (since people actually buy their products) and proceed to punish them?

      Oh wait, they already are. They are taking money from productive and profitable enterprises and giving it to failed ones.

      And the UAW will claim a victory. The sad truth is they will all be unemployed soon enough. Just delaying the inevitable.
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