Tag Archives: General Motors

News

Did GM pay off its bailout loans by using other government loans?

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Story from Ed Morrissey at Hot Air.

Moderate Republican Chuck Grassley, who supported Obama’s bailouts, wants to know how GM paid off their debts. He wrote a letter to Treasury Secretary Tim Geithner.

Excerpt:

General Motors (GM) yesterday announced that it repaid its TARP loans. I am concerned, however, that this announcement is not what it seems. In fact, it appears to be nothing more than an elaborate TARP money shuffle.

On Tuesday of this week, Mr. Neil Barofsky, the Special Inspector General for TARP, testified before the Senate Finance Committee. During his testimony Mr. Barofsky addressed GM’s recent debt repayment activity, and stated that the funds GM is using to repay its TARP debt are not coming from GM earnings.

Instead, GM seems to be using TARP funds from an escrow account at Treasury to make the debt repayments. The most recent quarterly report from the Office of the Special Inspector General for TARP says “The source of funds for these quarterly [debt] payments will be other TARP funds currently held in an escrow account.” See, Office of the Special Inspector General for TARP, Quarterly Report to Congress dated April 20, 2010, page 115.

Furthermore, Exhibit 99.1 of the Form 8K filed by GM with the SEC on November 16, 2009, seems to confirm that the source of funds for GM’s debt repayments was a multi-billion dollar escrow account at Treasury—not from earnings.

[…]In reality, it looks like GM merely used one source of TARP funds to repay another. The taxpayers are still on the hook, and whether TARP funds are ultimately recovered depends entirely on the government’s ability to sell GM stock in the future. Treasury has merely exchanged a legal right to repayment for an uncertain hope of sharing in the future growth of GM. A debt-for-equity swap is not a repayment.

Ed summarizes:

In other words, this is just a shell game. As Jim Vicevich points out, it’s akin to paying off your Visa credit card with your Mastercard — and then bragging about your financial condition. Taxpayers are still on the hook for GM. Nothing at all has changed.

Instead, we have another good reason for government to refrain from bailing out private companies. It makes them act like government when it comes to transparency about their finances. This claim really does prove that GM now stands for Government Motors.

Michelle Malkin also has a good column here about MORE connections between Democrats and rich Wall Street investment bankers. The Democrats are tightly connected with large corporations and investment banks. As a small government conservative, I find this alarming and unsettling. I believe in separation of government and corporations.

News

Who did Obama pick to handle the re-organization of General Motors?

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Look!Obama is appointing the best and the brightest person possible to oversee the bankruptcy re-organization of GM!

First, you need to know about Obama’s take-over of GM, which is pure communism.

Here’s the story from CNSNews:

Without the prior approval of Congress or any legislation authorizing the act, President Obama plans to announce on Monday that the federal government will take a 60-percent ownership stake in General Motors as part of a bankruptcy and reorganization plan for the company.

The White House on Sunday night announced that the plan will require the federal government to provide another $30 billion of taxpayer money to General Motors, on top of the $20 billion in aid the federal government already has given the company.

And guess who Obama’s picked to supervise the bankruptcy and reorganization?

Here’s the left-wing New York Times article: (H/T Hot Air)

It is not every 31-year-old who, in a first government job, finds himself dismantling General Motors and rewriting the rules of American capitalism.

But that, in short, is the job description for Brian Deese, a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry.

Nor, for that matter, had he given much thought to what ailed an industry that had been in decline ever since he was born. A bit laconic and looking every bit the just-out-of-graduate-school student adjusting to life in the West Wing — “he’s got this beard that appears and disappears,” says Steven Rattner, one of the leaders of President Obama’s automotive task force — Mr. Deese was thrown into the auto industry’s maelstrom as soon the election-night parties ended.

“There was a time between Nov. 4 and mid-February when I was the only full-time member of the auto task force,” Mr. Deese, a special assistant to the president for economic policy, acknowledged recently as he hurried between his desk at the White House and the Treasury building next door. “It was a little scary.”

Ed Morrissey comments:

Scary?  Well, yes, and not just for Mr. Deese, whose executive experience actually is less than Obama’s.  He’s never run any business, let alone worked in the auto industry.  He joined the Hillary Clinton campaign by taking a hiatus from law school, which he began after working as an assistant to Gene Sperling, now an advisor to Tim Geithner.  His entire resume consists of campaign work.

Perhaps Deese will do a good job, but I’m not terribly sanguine about the prospects of GM prospering under the guidance of someone who hasn’t ever met a payroll or sold a car.  A President who took his own job seriously would never have appointed a second-tier adviser to this position. A national media who took their jobs seriously wouldn’t let him get away with it, and don’t count this NYT piece in their favor.  They give a glowing report to this political-hackery appointment.

Heck of a job, Deesie!

Nice Deb has reactions from around the blogosphere here. Here’s one from the Heritage Foundation:

Will the new majority owner of General Motors — the United States Government — take an active role in managing the firm as it struggles for viability? In a statement earlier today, President Obama insisted that the government wouldn’t impose it’s own political agenda on GM.

“What we are not doing, what I have no interest in doing, is running GM,” he declared. Calling the government a “reluctant shareholder”, he declared that “GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality…They and not the government will call the shots and make the decisions about how to turn this company around… When a difficult decision has to be made like where to open a new plant or what type of new car to make, the new GM, not the US government will make that decision”.

This sounds reassuring, but in fact this non-interference pledge was broken even before he started speaking, as the White House was already trumpeting a pledge extracted from GM to “build a new small car in an idled UAW factory”, furthering the President’s environmental goals as well as pleasing his labor allies.

I think a law student/Hillary campaign lackey is the best candidate available. He’s a Democrat, at least, so you know you’re getting superior economic reasoning power. And GM just asked for another 30 billion, presumably to pay for their union member pensions and benefits. What do you expect when the President and Democrat Congress are running trillion-dollar deficits?

His Supreme Court nominee has similar qualifications. She’s Hispanic and female – female and Hispanic. And she thinks her sex and race will make her a better judge than white male candidates. The best and brightest!