• Apr 24, 2010
While General Motors is busy making marketing hay from its early payoff of $5.8 billion in loans, Senator Chuck Grassley and House Representative Darrell Issa aren't buying it. "It looks like GM merely used one source of TARP funds to repay another," said Grassley of General Motors financial moves. Grassley has asked for justification of the creative money-shuffling from Treasury Secretary Timothy Geithner.

Meanwhile, Representative Issa is looking at the new fuel economy standards that went into effect last month. Documents about the negotiations leading up to the 35.5 mpg standard have been requested from GM, Ford and Chrysler, as well as Toyota, Honda, Nissan, Suzuki, Volkswagen and BMW. Issa contends that the standard only passed because GM and Chrysler were put in a hammerlock and forced to agree in exchange for bailouts.

[Source: Detroit Free Press]


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  • 83 Comments
      • 4 Years Ago
      Wow!!!

      Last time I checked we were a country that was made up of at least three political parties. Parties that sometimes had conflicting views.

      The system we have in the United States SHOULD BE a system of checks and balances e.g., one checking over the other. I don't necessarily agree that the GOP is in the right, but I don't think they are in the wrong either. They are simply doing what they think is best for their constituents.
        • 4 Years Ago
        In addition, I don't think we should be a society that tends to be agreeable with everything that happens, but if that were the case someone would inevitably be taken for a ride.
      • 4 Years Ago
      Boy Ed is off to a great start,.....I'm not against everything Bush did,...but this guy
      is the one who also signed off on AT&T doing the warrantless wiretaps there.
      He is not a Mulally...by any stretch.

      Lying is no way to jump start your new advertising campaign.
        • 4 Years Ago
        It's not a lie. They did pay the loans back.

        And not a Mulally? You mean not a guy who almost drove his last company into the ground by creating a new business model based upon massive outsourcing. A business model that didn't work and had to be undone after he left.
      • 4 Years Ago
      republican+tea party=wall street lackey
        • 4 Years Ago
        Big corporations like that donate to both parties. That's not news.
        • 4 Years Ago
        Some of Obama's top contrubutors:
        Goldman Sachs $994,795
        Citigroup Inc $701,290
        JPMorgan Chase & Co $695,132
        UBS AG $543,219
        Morgan Stanley $514,881
      • 4 Years Ago
      It is true. Feel free to read any of the numerous news articles out there on it. Or i'll just let you read this quote, from Neil Barofsky, the government-appointed overseer of TARP:
      ""I think the one thing that a lot of people overlook with this is where they got the money to pay back the loan. And it isn't from earnings. ... It's actually from another pool of TARP money that they've already received," [Barofsky] said Wednesday. "I don't think we should exaggerate it too much. Remember that the source of this money is just other TARP money.""
      • 4 Years Ago
      Whether the bailout should or shouldn't have happened is a mute point right now, the point is that GM, along with the Obama administration's help and approval, are directly lying to the tax-paying citizens on TV networks in both the United States and Canada in an effort to boost their image and increase their revenue. This is clearly illegal and i can't see the FTC allowing the commercial to run for much longer.
      • 4 Years Ago
      Rick Wagoner should have put GM into bankruptcy long before begging the government for a handout. After Obama & Co. effectively owned GM, stockholders were wiped out and bondholders were stiffed so the UAW could take 30% of the company. A normal court bankruptcy would have been fairer to bondholders.

      GM had too many brands, a messy dealer organization, and had made promises to the unions that couldn't be kept. Bankruptcy was the only solution, but Wagoner was too weak to bite the bullet and do what needed to be done. Too bad, because the government shouldn't be involved.

      Unfortunately, Obama had to pander to his beloved unions which are largely responsible for killing the company in the first place.
        • 4 Years Ago
        The unions are hardly innocent in the overall mess that befell GM but to place all the blame at their feet ignores history.

        The union took advantage of short-sighted management to gain significant long-term benefits for their members that helped contribute to GM's collapse.

        But if you only work 40 hours a week and have vacation & sick days you can thank the UAW.
      • 4 Years Ago
      Good.
      I own part of that company and I'm glad they did the fiscally responsible thing and paid down debt with associated costs.

      I honestly can't believe that the same people that have been whining for months that we gave them money are now whining even louder that they have paid some of it back.

      Honestly - this is just absurd.
        • 4 Years Ago
        Perhaps you missed the story.

        GM paid back the Federal loan with.... A FEDERAL LOAN! The Treasury gave GM more cash from the TARP fund to "pay back" the original loan.

        Imagine calling up Visa and saying "Hey, could you give me a cash advance so I can pay off my outstanding credit?"
        THAT is what GM just did. The Feds are trying to help spin the "success" of GM. Its BS, plain and simple.
      • 4 Years Ago
      I keep seeing different amounts quoted...and I've not been able to make them add up so far. $5.8+$6.6? or $7.1+$6.6? Or is it $16.1? or $16.1+? I think I'm seeing that GM actually has NOT paid back all the money it received from the government.

      So my question is: What is the TOTAL amount of cash that GM received from the government?
      • 4 Years Ago
      How are people this f'n clueless? Ever worked at a company before? Even understand the deal GM got with the 'bailout'?

      Here's the summary: GM got $50B, most of which was given for the majority equity stake. That money is currently spent. The rest of it was listed as a 'loan' to be repaid. GM used a portion of the $40B+ equity cash to pay off the loan. GM would not pay off the loan over time and then return the UNUSED portion of the equity cash after that.

      No matter how unpalatable the bailout was, the fact that GM used the govt's equity payment to close the loan is a good thing.

      Yet more proof our education system is broken. Bitching about a loan repayment and still voting in the duopoly that allowed all this crap to go down in the first place. Amazing.
        • 4 Years Ago
        "No matter how unpalatable the bailout was, the fact that GM used the govt's equity payment to close the loan is a good thing. "

        This is debatable. Is it better for a family to spend all of their savings to pay off a manageable debt immediately that could have been paid off over a period of years, only for that family to encounter an issue/emergency in the following month where they need that money?

        Another issue is GM leading people to believe the money came from earnings, that more vehicles are being purchased, this could be viewed as market manipulation and fraud...just imagine if these statements led people to purchase GM stock, the stock went up, then this story broke and the stock plummets, GM would go the way of enron and worldcom...

        there are a lot of problems with what GM is doing, and looks like it is starting to come back and bite them....

        http://www.foxnews.com/opinion/2010/04/23/did-general-motors-really-repay-taxpayer-bailout/

        GM even bragged that it was able to “repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying [GM] vehicles.” There was great fanfare, including expensive, around-the-clock GM TV commercials nationwide. But, the hype is not the reality. In fact, GM did not repay the loans with money it earned from selling cars. Instead, GM repaid the TARP loans with money it withdrew from another TARP fund at the Treasury Department.
        • 4 Years Ago
        "No matter how unpalatable the bailout was, the fact that GM used the govt's equity payment to close the loan is a good thing. "

        So your saying the advert IS a LIE,....gotcha.

        It's double talk at the bare minimum......plus the govt is not gonna
        get the rest back when they do sell the shares,...maybe a fraction,but
        even if GM does get back on the ball,...and becomes profitable,..
        the Govt will have already sold it's share,...and only GM stockholders and UAW leeches will be the benefactors.Is the UAW gonna sell their stock back off when the Govt does?...no.
        I'd love to see a purge of that monstrosity of a cancer on our auto industry.
        • 4 Years Ago
        No, loans are different from equity. The loans are repaid, the ads aren't a lie.

        Just asking, what would you prefer be done with the money that GM got from the bankruptcy? Just hold on to it? Oh wait, you'd probably rather they return it to the government. Oh wait, they did!

        The debt financing was paid with equity financing. This is a common deal in business. Note that Ford has bragged about how they have done it and people seem to lap that up.

        http://findarticles.com/p/articles/mi_kmafp/is_200810/ai_n29487609/
      • 4 Years Ago
      Quate by Expert

      "No one is saying that they've succeeded. Even Ed Whitacre says they have a long way to go in the commercial. They got $50bn in two ways: 61% equity for ~$43bn, and a loan for $8bn. Turns out their cash flow has beat all of their expectations, so THEY WILL NOT NEED TO HOLD ONTO HUGE AMOUNTS OF LOAN MONEY TO FUND OPERATIONS. THEY RETURN THIS MONEY.

      Then they make a commercial saying "hey, we paid off our loan, we're making good cars, buy a GM car" and everyone jumps their ass because OMFG THEY HAVEN'T PAID BACK THEIR BAILOUT. They never said they did! The government got 61% of the company for all of the non loan money they gave GM. GM can't pay them back for that. The government has to sell off their shares after an IPO to get a return on their investment, like anyone else who buys shares.

      Just because you have a third grade education and can't understand the difference between an equity stake and a loan doesn't mean GM was lying. Everything they said was true."

      Exactly, well said. I wish people would stop quoting Faux News, its not news, its an Op-Ed.

      You know its funny the same thing can be said for the banks who repaid their loans far earlier than expected, using "bailout money" to repay "bailout money". But Fox News isn't saying anything about that so all right wingers keep their eyes shut and walk in lock step. It really is getting pathetic and old.
      • 4 Years Ago
      Chuck Grassley & Darrell Issa received campaign money from Enron in the 90s (and later pleaded for them) and Goldman Sachs in 2002 (respectively) ?

      Yeah, that's the kind of ethics and morals the Republican sh!theads are so proud of eh?

        • 4 Years Ago
        "Goldman Sachs was one of Obama's biggest donors during the 2008 presidential election, contributing nearly $1 million dollars to his campaign."


        Err.... GS's employees and relatives donated nearly $1 million dollar to Obama. They also donate around $200,000 to McCain.

        Your cherry picking is annoying. Last time I check, it wasn't illegal for people to donate to a political party, maybe it's illegal in your fascist looloo USA but in the USA it ain't illegal. If the GS wanted to influenced the market then they should have bought out SEC not Obama. And Bush signed the bank bail out bill so it's a joint effort by two parties. I also remember being suspicious how fast and urgent Bush wanted to push the bail out bill too.
        • 4 Years Ago
        Goldman Sachs was one of Obama's biggest donors during the 2008 presidential election, contributing nearly $1 million dollars to his campaign.
        • 4 Years Ago
        McCain also got money from them, but McCain also got it from nearly every other major Wall Street player. Plus I can hardly consider Obama in Goldman Sachs pockets when his administration is launching a huge lawsuit against them.

        So, lets stop playing the politics game and refocus on cars, pretty please? It always gets so sensitive around here when we deviate from the main subject.
      • 4 Years Ago
      Only on the net could people complain about getting paid back fair and square by GM after they complain that Toyota is getting screwed by the government because Toyota got caught killing customers.

      What's next?

      I think the brain sturgeons that are complaining here and that bastion of truth Fox "News" should demand to see GM's birth certificate.

      My goodness has this country become over run with idiots.
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