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US Lost Ten Billion Dollars on GM Bailout

Jack Hays said:
The US lost $10 billion on the GM bailout. What do you think about that?
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The entire TARP program, which laid out $418 billion, only wound up losing $12 billion. What do you think about that?
 
Visbek said:
The entire TARP program, which laid out $418 billion, only wound up losing $12 billion. What do you think about that?
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It happened. Probably politically unavoidable. I would have preferred good old fashioned bankruptcies.
 
Lord Tammerlain said:
Considering the probably costs of letting GM close, 11 billion is not bad

The cost would be, increased medicare and Medicaid bills, welfare and UI payments not just to GM workers and retirees, but to dealership and suppliers as well
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not necessarily, that is only speculation on your part. The ending of poor ideas and management styles opens the doors to better ideas and business start ups.
 
Jack Hays said:
The aviation supply chain is considerably more complicated than that. Nonetheless it doesn't matter; AA is a large complex business whose situation is/was fully analogous to that of GM. You need to stop defending an indefensible position.:peace
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Indefensible? Hardly according to Mark Zandi chief economist for Moodys

Bailing out Detroit - Philly.com

POSTED: February 26, 2012
The government bailout of the U.S. auto industry was a success.

Without financial help from Uncle Sam, General Motors and Chrysler likely would not exist today. The American auto industry would be a shadow of its former self. And the U.S. economic recovery would be even more drawn out and frustrating than it has been.

Saving the automakers was distasteful, but necessary.

Rehashing this bit of history is timely on the eve of the Republican primary in Michigan, where the economy has long been tethered to the auto industry. The potential GOP nominees have all spoken out against the bailout, which the Obama administration helped engineer. Yet it is worth remembering that when the bailout was being debated three years ago, in the teeth of the Great Recession, it had bipartisan support. And it was the Bush administration that provided the first substantial chunk of financial aid to the industry.

[...]​
 
pbrauer said:
Indefensible? Hardly according to Mark Zandi chief economist for Moodys

Bailing out Detroit - Philly.com

POSTED: February 26, 2012
The government bailout of the U.S. auto industry was a success.

Without financial help from Uncle Sam, General Motors and Chrysler likely would not exist today. The American auto industry would be a shadow of its former self. And the U.S. economic recovery would be even more drawn out and frustrating than it has been.

Saving the automakers was distasteful, but necessary.

Rehashing this bit of history is timely on the eve of the Republican primary in Michigan, where the economy has long been tethered to the auto industry. The potential GOP nominees have all spoken out against the bailout, which the Obama administration helped engineer. Yet it is worth remembering that when the bailout was being debated three years ago, in the teeth of the Great Recession, it had bipartisan support. And it was the Bush administration that provided the first substantial chunk of financial aid to the industry.

[...]​
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Moody's is linked to investors. Of course they want to avoid bankruptcy. Just protecting the BHO gang's financiers.:peace
 
Jack Hays said:
Moody's is linked to investors. Of course they want to avoid bankruptcy. Just protecting the BHO gang's financiers.:peace
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You sure throw around the bull**** Jack. They did go bankrupt, why in HELL did they have an IPO??? LMMFAO And polgara likes your post? Double LMMFAO :peace:peace:peace
 
Jack Hays said:
It happened. Probably politically unavoidable. I would have preferred good old fashioned bankruptcies.
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Yes, those good ol' bankruptcies did a great job in the Great Depression. Oh wait....
 
pbrauer said:
You sure throw around the bull**** Jack. They did go bankrupt, why in HELL did they have an IPO??? LMMFAO And polgara likes your post? Double LMMFAO :peace:peace:peace
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It wasn't real bankruptcy. It was "too big to fail" bankruptcy. Don't laugh so much or I won't defend you next time a poster says you're missing a few parts. GM should have been sent into real bankruptcy.:peace
 
pbrauer said:
:funny

http://www.nytimes.com/2009/06/02/business/02auto.html?_r=0
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Sense when does big daddy government lose 10 billion on a bankruptcy? Sense when does big daddy government go around and buy stock in a bankrupt company? But you know all this was a bailout by big daddy government. In fact big daddy did not want GM to file bankruptcy as it would go out of business or be broken up and the unions would lose big time and the bond holders would get something on their dollar, as this was a structured bankruptcy that big daddy orchestrated before the filing. But you know all that.
 
Jack Hays said:
GM would not have shut down. American Airlines flew while bankrupt. This is just administration propaganda.:peace
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Yes administration propaganda

Which does not explain why the top auto executives begged for a government bailout

The Auto Industry Bailout: Thoughts About Why GM Executives Are Clueless And Their Destructive

I am ambivalent about whether the auto industry should receive the 25 billion dollars that they are begging and pleading for from the U.S. taxpayers. On the one hand, I realize that millions of jobs depend on the industry and that saving these jobs is not only a humane thing --- it also may help the country(and even the rest of the world) from sliding into a deeper recession in the long-term. On the other hand, I worry that it will be a waste because the industry has lost so much money and so many jobs in recent years that these firms are in a death spiral that is impossible to stop (GM alone lost 39 billion last quarter). I also believe it will be a waste because the leaders of these firms (at least GM, which I know best) are so backward and misguided that the thought of giving these bozos any of my tax money turns my stomach – which is pretty much the same point made by observers ranging from ultra-capitalist Mitt Romney to near-socialist documentary filmmaker Michael Moore. Recall that Moore made the famous film that attacked GM, Roger and Me.
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GM lost in one year 39 billion dollars, and was losing a lot the year they begged for a bailout. I am rather certain that if the auto executives had any other choice but to go to the government begging for money, they would have done so
 
Lutherf said:
So if there was no demand for cars and trucks GM should have been supported because.......why?

Quite often the best time to make capital investments is when demand is low due to short term economic conditions like the 2009 crash. The bulk of GM manufacturing could have been picked up cheap and the buyer wouldn't have the burden of an underfunded pension plan or a financing division that was a mess. Such a move would have also had an immediate positive effect on the economy because the way things played out it only added a bunch of uncertainty to the bond market where all of a sudden bondholders could no longer be confidant that they would be in first position in the case of a bankruptcy.
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Yes in NORMAL economic times it is a great time to do so. But in this case no companies were willing to step up and risk the money that would have been required to do so. Or those that would have been willing would not have gotten financing from the banks. With the exception of Chinese ones. I doubt SAIC would have been allowed to buy GM so it does not matter
 
And saved how many jobs directly, indirectly, and tricklin down--10 billion is 40% of what the GOP House threw away in October..
 
Lord Tammerlain said:
Yes in NORMAL economic times it is a great time to do so. But in this case no companies were willing to step up and risk the money that would have been required to do so. Or those that would have been willing would not have gotten financing from the banks. With the exception of Chinese ones. I doubt SAIC would have been allowed to buy GM so it does not matter
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In bankruptcy the price falls until a buyer comes forward. There would have been a US buyer.:peace
 
Lord Tammerlain said:
Yes in NORMAL economic times it is a great time to do so. But in this case no companies were willing to step up and risk the money that would have been required to do so. Or those that would have been willing would not have gotten financing from the banks. With the exception of Chinese ones. I doubt SAIC would have been allowed to buy GM so it does not matter
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Are you serious? Do you believe the creditors that took the crew cut during the bankruptcy could not have come up with a better restructuring?
 
Jack Hays said:
In bankruptcy the price falls until a buyer comes forward. There would have been a US buyer.:peace
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it is not the price of buying the company that is was an issue. It would have been the money required to keep the company in operation during the bankruptcy proceedings. From what I recall GM would have needed 40 billion or so in debtor in financing money to remain operational during bankruptcy.

And if you can name a few companies or people that would have had access at that time who would have been interested in taking over GM I would like to know them
 
Jack Hays said:
Ancient history. Not of interest.
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So we should have let the economy go straight into the toilet, because you're not interested in similar events from 75 years ago? Good to know. :roll:
 
AlabamaPaul said:
Are you serious? Do you believe the creditors that took the crew cut during the bankruptcy could not have come up with a better restructuring?
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Where was the money going to come from?

The banks which were getting money from the government in the first place? Use government bailout money from the banks to fund a private bailiout of GM?
 
Visbek said:
So we should have let the economy go straight into the toilet, because you're not interested in similar events from 75 years ago? Good to know. :roll:
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The economy would have recovered more quickly.
 
Lord Tammerlain said:
it is not the price of buying the company that is was an issue. It would have been the money required to keep the company in operation during the bankruptcy proceedings. From what I recall GM would have needed 40 billion or so in debtor in financing money to remain operational during bankruptcy.

And if you can name a few companies or people that would have had access at that time who would have been interested in taking over GM I would like to know them
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Oh, oh, can I answer? The same way Chrysler was bailed out previously, with loans guaranteed by the government, not by the government screwing over the bond holders to the benefit of the unions by taking over the company...
 
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