Followup: GM receives second gov't loan installment of $5.4 billion
Cue the angels! General Motors reports that it has received the second installment of the $13.4 billion government loan that it was promised by former President Bush late last month. Sure, it may have arrived a few days late, leading GM's coffer-keepers to anxiously check their mailboxes every few minutes, but it showed up with time to spare before The General ran out of funds to pay the bills on March 31st. For those keeping track, GM's total draw from the bridge loan so far rings the taxpayers' registers to the tune of $9.4 billion, leaving $4B still to come at a later date. In order to keep the money, GM must go back to Congress by February 17th with a full progress report detailing how it is fairing in reducing its current $28 billion in debt.
[Source: Automotive News - sub. req'd]
Reader Comments (Page 1 of 2)
000000 3:32PM (1/22/2009)
Hopefully they'll be able to turn it around... BTW do any of the banks have to become "viable" or give the money back?... To me it seems they can just keep asking(and getting) more money whenever they need it.
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skant 4:35PM (1/22/2009)
Yes they do have to give the money back and usually the goverment demands to take equity positions in addition to high interest rates would be a turn-off, except for the fact that the government is the only one willing to fund anyone at this point. Basically, if the banks had any other choice but to accept the governments terms, they would....but they don't.
halogenrepublic 3:35PM (1/22/2009)
The treasury could not print the money fast enough.
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TurboPanzer 3:49PM (1/22/2009)
"I can haz more Benjamins later?"
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Torrent 3:54PM (1/22/2009)
Why don't you tell us how you really feel? lol
jk, please don't.
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Dave T. 3:57PM (1/22/2009)
So...they went through $9.4 billion in less than a month? With no plants open? Umm...how long is another $5 billion going to last?
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Doug A. 5:50PM (1/22/2009)
They only had $4 Billion, which would have lasted them until March 31st. The additional $5.4 Billion bring their total to $9.4 Billion and will hopefully last until August at least.
The last $4 Billion (if needed) is likely to bring them through the end of the year and hopefully into an operating state which not only does not require government loans, but into a state in which they can repay the loans they have received.
Torrent 3:57PM (1/22/2009)
At least it looks like GM can actually use the money right. unlike those-
ZOMG TAHNK U AMERIKA WEZ ULMOST DIEDZ advertisements by Chrysler.
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MachinaDC5 4:05PM (1/22/2009)
Well it's good news that they got the money they were promised. And then in a few months they'll need another couple billion, and then in a few more months they'll need another couple billion, and then in a few more months they'll need another couple billion, and then in a few more months they'll need another couple billion, and then in a few more months they'll need another couple billion...
Sorry GM, but I'm just really sick of giving my tax dollars out to you when I wouldn't put any of your cars in my driveway.
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Torrent 4:14PM (1/22/2009)
So what are you going to do? NOT pay your taxes? Yeah that'll work out. When you pay your taxes, don't look at it as paying for a selfish company that hordes money (or whatever is was you said you didn't like their cars for). Look at it as helping the tens of thousands of people working for the GM keep their jobs.
I don't mind, because if they keep putting out cars as great as their newest products, they have nowhere to go but up. And remember- GM is going to pay this money back. They're not keeping it like that 700 billion for the worthless Citigroup. The money didn't even help those crooks. This money is going to help the Big 3. It won't happen overnight, but stuff over in Detroit is going to change for the better.
MachinaDC5 5:09PM (1/22/2009)
Why should I be the one doing anything? I'm already making my point in the market by buying the competition's cars instead. So my reward is that my taxes get taken to indefinitely put a bad company on life support?
BoxerFanatic 2:23AM (1/23/2009)
MachinaDC5 is mostly right.
It is not my job to protect someone else's job. It is my job to work to provide for my family.
It is that other person's job to provide for theirs. I make less than UAW union wages, and I certainly don't get their benefits and retirement package. Yet I make enough to pay taxes, and will continue to have to pay taxes into the future, when this huge debt storm comes due.
Banks, Car companies, and all other private enterprise, and private citizenry are responsible for themselves. That is not a burden the American Taxpayer can long bear, nor should they be expected to. Business that is not self-supporting is not business.
If the big 3 can do business, they need to do their business efficiently. If they cannot do business, they need to evaluate why, or clear out for new business practices to grow in their places, and fill the market demand in refreshed and refined ways. If that means new management, so be it. If that means new labor, so be it. Hopefully it means new products, that actually compete on cost and quality, and don't sacrifice one for the other, as the Big 3 have for so many decades.
But this has become a political issue. On a political level, it is completely abhorrent and absolutely immoral for the government to tax under force of law, to take my earned income away, and give it to people who did not earn it.
Torrent is absolutely right... Try not paying taxes, and see where that gets you. I doubt that you will be treated as well as they treated Timothy Geithner, who is to be the new secretary of the treasury, and will be managing all of this government loan business, who cheated on his own taxes for years, among other infractions that should disqualify him entirely.
But Torrent is not right in asserting that taxpayers should be ensuring the jobs of other taxpayers via government spending.
It is well outside the enumerated powers of the federal government, and it is absolutely at odds with the freedom upon which this country was founded, and the free market principles this economy was built on.
Political and Economic freedom are co-dependent on each other, and neither can sustain without the other. Both are under assault by a government run amok.
This course will not work. It has been tried, and has failed invariably EVERY time. Government is the PROBLEM, therefore more government cannot possibly ever be the solution to that problem. The antidote to poison is NEVER more poison!
Judy Zik 11:24AM (1/23/2009)
Good idea. We will just take the bailouts away. Instead of lending money to one of the largest employers in the world we will let them go bankrupt. That couldn't possibly effect the economy in anyway. We will spend the same money or more paying all those workers to sit at home and do nothing on unemployment or welfare. Then we can watch our economy implode with smug satisfaction knowing we stood up to evil GM.
I get the whole I hate GM thing. I owned a Sunbird once. Personally I think their new vehicles have turned the corner but I still understand the hate. What I don't get is the idea that people think we can just stand back and watch them implode and not get hurt by the storm it would create.
MachinaDC5 1:13PM (1/23/2009)
Gotta break a few eggs to make an omelet. Yeah things will be bad, but I'd rather have things be bad now than much much worse just a couple years down the road. Sure it sucks, but it's a better option than endless magical tax money handouts to failed businesses.
The Luigiian 4:08PM (1/22/2009)
An interesting question is what's going to happen when Obama starts pushing for more money for the automakers against the will of the majority of Americans. He said he was going to, but last time I checked the polls were overwhelmingly against a bailout.
http://www.egmcartech.com/2008/12/04/poll-cnn-says-6-in-10-americans-against-detroit-bailout/
Obama's honeymoon with the American people will be short-lived at this rate.
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Dude 4:11PM (1/22/2009)
Real men aren't afraid to admit they failed, file for bankruptcy, and rebuild.
GM needs to grow a pair.
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jv2k 8:53PM (1/22/2009)
people wont buy cars from a bankrupt company.
BoxerFanatic 2:33AM (1/23/2009)
@JV2K...
They already ARE bankrupt, they just refuse to call it what it is.
No private lender would touch these companies at this point, because the probability of payback is very low. Government is playing with the citizen's money, not their own, and wants to run with a political football, they are not focusing on what these businesses need to do to survive and heal.
The tax payers are just funding an extension of the inevitable at this point. No course change is happening, neither by the companies, nor by the government.
Even if the businesses change course, it is still not the government's purview to spend yours and my monies to prop up another private enterprise. That is extortion, racketeering, theft, and possibly fraud, if anyone who isn't a law-maker would try to do any of this on their own.
Any government that is powerful enough to give you anything you want, is powerful enough to take everything you have. - Thomas Jefferson.
Patrick 4:13PM (1/22/2009)
After Merrill served up fat bonuses to its execs (that probably are worth more than the GM loans) and the govt doling out more money to B of A like it was candy at Halloween, I would hope GM would get their money.
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iQuack 4:25PM (1/22/2009)
Throwing money at GM and Chrysler is like pounding sand into a rat hole.
You never fill it up.
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