REPORT: Fritz says GM doesn't need any further aid from Washington
Fritz Henderson went to Washington to have a word the folks who wrote the $50 billion check to keep General Motors alive. While there, he answered a few questions put forth from The Washington Post about that investment and the "new" company created with it. His answers are sound, but qualified and a bit vague – that's to be expected, since the economic storm isn't anywhere close to being over.
On the subject of money, he said that "any reasonable planning scenario" they've looked at doesn't involve the government writing any more checks, and when it comes to payback, "If we get our job done, I think the government has an excellent chance of getting a return on its investment." That could all be read as a way of saying "We have no clue what's going to happen." But four months into his job is too soon for Henderson to be making promises for years out, so at the very least, we'll see what GM's next round of cars is like before we dissect his veracity.
On other scores, Henderson praised the UAW, kicked hydrogen cars in the doors, estimated that the Chevrolet Volt will come in at $40K, and he also said electric cars need a lot more investment from other sources for prices to come down. Click the link for the rest of The Generalissimo's words. Hat tip to Serge!
[Source: The Washington Post] | Image: Philippe Lopez/Getty]
Reader Comments (Page 1 of 2)
Epsilon-Not 5:35PM (10/30/2009)
They DID get $50 billion- if they need more than that then it's a bit ridiculous.
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Yaroukh 6:01PM (10/30/2009)
I get your point but to be fair, $50b included also the Chrysler bail-out and they are obliged to pay some $6-7b back. So it is more like $30-ish I guess.
Saxxon 9:32PM (11/01/2009)
Imagine that, a Government run entity, that doesn't know how much money it will cost the taxpayers!
Sounds like every other Government run program. "It will cost this much, promise." Then a few months later, "Sorry, we were wrong, it will cost this much." Again, further down the road, "Sorry, wrong again, it will cost this much."
When will people pull their respective heads out of the sand, and realize that no Government run program, or entitlement, ever works fiscally, the way it was intended.
You really think we will ever see a dime of the tax money used to facilitate this deal?
Sea Urchin 5:36PM (10/30/2009)
Washington? GM is using my money and i do not live in Washington.
I'll go and deposit my paycheck into Ally Bank, great bank by the way, rock solid, it did not even need a bailout.
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Samurai Jack 5:49PM (10/30/2009)
This is intentionally ironic, right? Isn't it common knowledge that Ally Bank is owned by GMAC?
Sea Urchin 6:01PM (10/30/2009)
Not owned, it is GMAC, they just renamed themselves.
Yaroukh 6:04PM (10/30/2009)
You get some provision from them? Because you are walking advertisement. :)
Samurai Jack 6:19PM (10/30/2009)
Not renamed, as GMAC is still in existence. Ally is just a subsidiary. Still, it's more honest than other corporate masking shenanigans. My favorite is Airtran, formerly known as ValuJet.
Epsilon-Not 12:08AM (10/31/2009)
It's more confusing than that- GMAC had a subsidiary named GMAC Bank. GMAC Bank renamed itself Ally Bank- so in a way, GMAC did rename itself Ally, while also remaining a subsidiary of GMAC... ah, the world of Wall Street.
Clavius 5:38PM (10/30/2009)
Famous last words anyone?
Its way to soon in my eyes to say that they wont need any more money or that they are fine. He should of just said "So far things are looking alright." and leave it at that. I just hope they dont let the old mentality that got them to what they were previously set in.
Also while I'm at it.. can we have him shave that mustache. Every time I see him I think of a plump stupid Hitler and it always irks me.
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adam1drift 5:46PM (10/30/2009)
Didn’t we just here that the likelihood of them paying back the money anyway is nada? So what that they won’t need any more money from us... Why not pay us back! That’s what I’m worried about. And if they no longer need money from us, when is the government going to pull out?
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Obviously DaMinority 2:36PM (10/31/2009)
I think you might be confusing the loans, which were a part of the liabilities that went with "old GM" and the current amount of investment. The current investment won't be 'paid' so much as 'earned'. Unless they rewrite the rules (I'll pause for the laughter to stop, I'm well aware they rewrote the rules several times in making all this happen) GM will not repay the investment but the government will recoup whatever it can in the company's IPO whenever that happens. If it goes particularly poorly, we're all out a bunch, if it goes exceedingly well, the government 'could' (not terribly likely) net more than all of it's investment.
Jake 5:57PM (10/30/2009)
So long mom and dad, thanks for the $50B, screwing over all the people that I owe money too, cash-for-clunkers.... I don't need any more help. Can I still come over and do my laundry?
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Yaroukh 6:05PM (10/30/2009)
+get special treatment from UAW
Tim 6:05PM (10/30/2009)
GM won't ever pay the government back because they don't owe the government anything. I think the government will, however, get a decent ROI. They have a 60% stake in the company. If the company is ever able to have an IPO I think the government will get back its $50 million pretty easily. Still don't think it'll come even close to the ROI they got from loaning money to banks that didn't need it.
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Clay Garland 1:35AM (11/01/2009)
that's billion with a b champ. And unless GM's stock pulls an AAPL, I don't think they're going to be raking in the cash.
Tim 2:33PM (11/02/2009)
You're right. In that case, the odds are definitely working against them. I don't think GM will ever be able to achieve a market cap of $100b+.
ropeburn 6:17PM (10/30/2009)
GMAC their financial side is still foundering....
can autoblog dig that story up and report how it affects GM...
... maybe it doesn't.
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Epsilon-Not 6:27PM (10/30/2009)
GMAC isn't really part of GM- IIRC their stake is something as low as 10% if that now.
I do wonder if GM would be better off starting a new financial arm and just let GMAC fail- of course, the government would probably have to pitch in even more money to allow for THAT to happen- it's a lose-lose situation.
Lemon 6:28PM (10/30/2009)
The American tax payers did not bail out GM. Non of us own any part of GM. China owns GM.
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