Pay Up, GM. Then Get Lost.

Tony Soprano must be rolling over in his grave.

Two years ago, deadbeat debtor General Motors told the government it needed billions of dollars in bailouts or it would go bankrupt. It got the money -- then went bankrupt anyway. This alone would've earned it a kneecapping from the Soprano crew.

Mission accomplished
Fast-forward two years and GM CEO Ed Whitacre emerged Wednesday from a meeting with Treasury Secretary Timothy Geithner and Speaker of the House Nancy Pelosi to proclaim that, just like fellow TARP recipients Bank of America, Citigroup, and Wells Fargo, GM had paid its tab: $7 billion in government loans [claps hands and makes whisking motion] gone!

Which is great, Ed, but -- wait a minute, getting out my calculator here -- didn't we give you guys $50 billion?

60% of what is what?
Actually, we did. But don't worry. According to Whitacre, GM's good for the other $43 billion. Says he: "I think the stock could be worth a lot and the taxpayers could get all their money."

You see, when GM filed for bankruptcy, the U.S. government took a 60% stake in the company in lieu of repayment. (Which is why GM's corporate structure is described by some -- literally and accurately -- as a subsidiary of the Department of Treasury.) Whitacre says he has every intention of making good on that investment and getting out of the "Government Motors" business. But how likely is it that we'll succeed in converting our national 60% shareholding in GM into $43 billion, cash money?

Earlier this month, GM filed its first complete financial report since emerging from bankruptcy protection. In it, we see that GM booked $104.6 billion in revenue last year and rang up about $21 billion in operating losses. By way of comparison, Ford (NYSE: F  ) collected $118.3 billion in revenue last year, with a much smaller operating loss of only $611 million. Yet despite boasting more revenue and smaller losses than GM, Ford's market cap stands at just $48 billion.

Let's be clear: To make the government's 60% stake in GM worth $43 billion, GM as a whole would require a market cap of approximately $71.7 billion. In other words, GM needs to IPO at a price 50% higher than Ford currently carries. This, despite the fact that GM brought in 12% less revenue than Ford did, and lost more money.

Doesn't seem likely.

A more likely scenario
Continuing with the comparisons, Toyota (NYSE: TM  ) made $184.8 billion in sales last year, and carries a $122 billion market cap. Honda's (NYSE: HMC  ) numbers are $86.8 billion (sales) and $63 billion (market cap). Nissan (Nasdaq: NSANY  ) has $76.6 billion (sales) and $34.3 billion (market cap).

GM's about midway between Ford and Honda in terms of revenue. So let's assume investors grant a revitalized GM a price-to-sales ratio somewhere between those of Ford and Honda. Say, a nice, round 0.5 times. This suggests that at $104.6 billion in sales, a newly public GM should fetch roughly $52 billion in market cap, making our national stake in the company worth $31 billion. That's a far cry from $43 billion.

Will our stake ever grow back to the $43 billion we initially sunk into the company? Yes. Simple annual inflation of 3% should turn our $31 billion take into $43 billion in just 11 years. (Of course, those dollars won't be worth as much as they are today.)

A modest, Foolish solution
And so the U.S. government will soon face a choice. GM says it could sell shares to the public as early as the end of this year. Assuming rational investors apply a rational valuation to the stock, the government will have the option of sitting on its GM stake for perhaps a decade (or, more pertinently, three election cycles), at which point it can proudly proclaim its brilliance at having "invested" in GM way back when, and declare the debt to the U.S. taxpayer paid in full.

The government can do that … if it's about as dumb as a doorstop. As fiduciary for the U.S. taxpayer, I'd hope our elected representatives would make better use of our money, or allow us to make better use of our money.

To my Foolish eye, the decision here is patently clear: Just as soon as GM comes public, the government should sell its shares to whomever it can find (China? You hearing me?), take the money, and return it to the taxpayers who fronted it the cash.

Trust us, Tim Geithner. We'll do a better job investing the money than you did.

Got a different take on the situation? Tell us about it in the comments section below.

Ford is a Motley Fool Stock Advisor selection. Fool contributor Rich Smith does not own shares of any company named above. The Motley Fool has a disclosure policy.


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  • Report this Comment On April 26, 2010, at 11:13 AM, wigginsrl wrote:

    As a self-appointed spokesman for doorstops, we don't appreciate the comparison, Rich. But otherwise, you hit all the nails on all their heads!

    Thanks.

  • Report this Comment On April 26, 2010, at 11:42 AM, jellie123 wrote:

    The thing that bothers me about this article is that nothing is said about the fact that approx. 240,000 jobs were saved - people paying taxes, people buying goods, etc.

    With articles such as this the human factor is never taken into consideration, as if the human factor and effect makes no difference.

  • Report this Comment On April 26, 2010, at 11:48 AM, timmythetiger wrote:

    Tony Soprano was not killed off, therefore he is not doing anything in his grave, including rolling over. Please find better tired cliches to make your point.

  • Report this Comment On April 26, 2010, at 11:51 AM, DebateDave wrote:

    Please tell us what other government spending can provide some type of benefit that equates to 72% of the outlay?

  • Report this Comment On April 26, 2010, at 11:54 AM, aqua225 wrote:

    jellie123:

    The human factor is irrelevant. And here is why...

    The auto makers and the auto unions long ago realized manufacturing is dead in the USA, at least for the time being. But they insisted on staying the course of trying to produce overpriced cheaply made goods in the USA, meanwhile boosting salaries, wages, and benefits.

    Do they expect the business & market wise among us to shed tears when the resulting train wreck eventually comes?

    These people should have been slowly released into unemployment as the market shifted rather than culminating in one big wallop, allowing these workers to slowly re-educate and move into other fields. They just knew a bunch of soft hearts just like you would lend them a helping hand when the collision was inevitable.

    And help you did, helped yourself to my tax money to assist your guilty heart, even when your heart should not have had sympathy or guilt.

  • Report this Comment On April 26, 2010, at 11:55 AM, coolerbill wrote:

    Beyond the specific job-count there are other "big picture" implications to the GM rescue. consumer confidence is one, the other is Ford. Where would Ford be today if half of its suppliers tanked after a GM closure. Would Fiat have joined with Chrysler if we had let GM fail?

    The argument for a hands-off government is short sighted and accepts simple answers to complex problems. It is easy to call the bailouts "Unfair!"... but they are not as unfair as the Depression we were talking about 2 years ago.

  • Report this Comment On April 26, 2010, at 11:56 AM, TMFTomGardner wrote:

    Jellie, one approach we could take would be to simply print a few trillion dollars more, hand it out, ensure everyone's job, provide everyone the cash to buy stuff (like new instead of used cars), and feel very good about ourselves. The problem comes on the other side of all that cash printing and low productivity. Much larger segments of society will suffer then.

    There were no bailouts for the employees of Enron, Kmart, Worldcom...no bailouts for the employees of Internet companies that went kerplunk in 2001. There were no bailouts for The Motley Fool when we hit a very difficult period in 2001.

    You see, my fear is that there were bailouts for the automakers because they are backed by unions with lobbyists and special interest donations to our elected officials. This is not a politically charged point. It happens on both sides of the aisle. And who gets the bill? Productive organizations, organizations that solve their problems and manage themselves effectively...and individuals who do the same.

    I don't mean to sound snarky. Is there a way you can see where we can bailout every company that heads toward bankruptcy or that has layoffs? Where would the money come from? And do you think union lobbying support led to any of the bailouts we've seen?

  • Report this Comment On April 26, 2010, at 11:58 AM, coolerbill wrote:

    Aqua: "long ago realized manufacturing is dead in the USA"

    Tell that to Honda, Toyota, Nissan, BMW, et. al. who all manufacture here.

  • Report this Comment On April 26, 2010, at 11:59 AM, grant224 wrote:

    Just a clarification question that probably has an obvious answer...

    In that GM commercial where the CEO is talking about their success in repaying Gov't loans, he says something along the lines of," We've already repaid our loan plus interest."

    Wouldn't paying off a loan early allow you to avoid future interest payments? Does this mean that although they may have repaid their loan, they short changed the government in that they skirted future interest payments?

    Or was the loan structured differently? It seems that all the recent taxpayer beneficiaries have "repaid their loans early" as a mark of success, but my question is does the loaner actually benefit from early repayment ? I would have assume (or at least hope) that the Govt was trying to secure some sort of profit..

    g

  • Report this Comment On April 26, 2010, at 11:59 AM, jahartmu wrote:

    Any hope in the federal government making wise decisions here is based on the assumption that they have any concept of "our" money being "ours." The current inhabitants of D.C. seem to think all wealth and success is directly due to, and/or on loan from, the illuminated technocrats making more and more of Americans' decisions for us. Leftists love the UAW so much because it's another layer of bureaucracy hammering the concept of dependency into voters.

    But I'm sure the Volt will save both GM and humanity!

  • Report this Comment On April 26, 2010, at 12:07 PM, joerancho67 wrote:

    The Devil is in the details....

  • Report this Comment On April 26, 2010, at 12:07 PM, aqua225 wrote:

    coolerbill:

    Yeah, but as they have moved cars into production here, they have started doing the same things American makers have been doing: de-content-ing the vehicles. I read the car mags, and all of the American produced foreign vehicles are suffering. Camry no longer wins interior fit, finish, and quality awards, is just one example.

    Additionally, what happens when UAW gets their nose in those factories? They'll more than likely leave, just like Toyota is doing in CA.

  • Report this Comment On April 26, 2010, at 12:12 PM, aqua225 wrote:

    coolerbill: "Tell that to Honda, Toyota, Nissan, BMW, et. al. who all manufacture here."

    It will interesting to see what effect the UAW will have when they move in on the foreign-US manufacturing facilities. Will these companies leave or go?

    And that ignores the fact that all of the US-built models are showing signs of GM/Ford/Chrysler-itis: the decontenting of interiors, the reduction in interior build quality, panel gaps, etc. How long will that continue before consumers start checking the "made in" tag in the driver's side door before making a purchase decision?

  • Report this Comment On April 26, 2010, at 12:23 PM, coolerbill wrote:

    Have you guys looked at a new Ford? Panel gaps? Get real.

    Foreign firms have been building in the US since the 70's. (was VW in PA the first?). The UAW is your bug-a-boo but they got slapped down in the bankruptcies and have made no real inroads in the foreign owned plants over the decades. UAW is all but dead.

    Get your biases and talking points up to date gents. Better yet, look for yourselves before parroting the words of others :-)

  • Report this Comment On April 26, 2010, at 12:38 PM, TMFDitty wrote:

    @DebateDave: You seem to be confusing getting "72% of the outlay" as a "benefit," and getting 72% of your initial investment back -- a 28% loss.

    @grant224: You assume/hope correctly, at least in some cases. When the government took equity stakes in the big banks, for example, they received warrants to buy additional shares. The Feds have been steadily selling off these warrants, raising some $1.1 billion in December 2009 alone.

    As for GM... even Professor Warren, in charge of *trying* to keep track of the bailout cash, isn't 100% sure who got what, under what terms, or what they're doing with it. That said, I'd be surprised to learn that the government put any kind of prepayment penalty in their loan terms. Like I said, it's in the politicians' interest to be able to "declare victory" on the bailout as quickly as possible. They wouldn't have wanted to make it any harder for GM to pay back the loan, than necessary.

    @timmythetiger: Whaddyathink the "guy" did after emerging from the bathroom? Tony took two to the base of the spine. He's dead.

    And finally, @wigginsrl: I apologize to the entire Doorstop Community for the comparison. In future, I shall follow Buffett's lead and confine my aspersions to cavemen.

    TMFDitty

  • Report this Comment On April 26, 2010, at 12:45 PM, squiggy2 wrote:

    The US Government selling its stake in GM at less then GM owes cant be a good idea. Why? The article argues that we (the government) can invest the money better than GM. Once the money is returned to the treasury does anyone really think the U.S. will reinvest those dollars? No the money will simply be returned to the treasury locking in our losses.

  • Report this Comment On April 26, 2010, at 12:54 PM, TMFDitty wrote:

    @squiggy2: Apologies, but you seem to have misunderstood. That's about 180 degrees off from what I said.

    I said the government *cannot* invest the money well (as demonstrated by the loss it's likely to take on its GM purchase.) I said that we, the taxpayers, can invest the money better than the government.

    More important, though, I think, is your suggestion that it's a bad idea to "lock in our losses." Those losses are already there. The market doesn't care how much our initial investment was worth, only what it's worth today. There's no guarantee whatsoever that by leaving the money in GM, we'll ever be made truly whole -- that we'll "get back to even", so to speak. Better to cut our losses now, and make better investment decisions in the future.

    For an example of how this works in practice, check out fellow Fool Jim Mueller's segment on FoolTV from Friday:

    http://www.fool.com/features/market-recap/2010/04/23/netflix...

    TMFDitty

  • Report this Comment On April 26, 2010, at 1:52 PM, Ronpad1 wrote:

    There could be a play here and it is the GM bonds. The GM 2028 6 3/4% is selling at a massive discount - about 34.00. When the IPO comes, bondholders will get warrants (I think two groups of warrants - please Fool, correct me if I am wrong.) One group of warrants can be used immediately w/cash to buy the IPO. The other warrants can be used later (sort of like an option.)

    And since we common folk operate like Fools anyway, I think the issue will be "hot" - no matter the "reality environment" and some profit could be made on that first day.

    I'm glad we saved the old lady - Remember "What's good for GM is good for . . . . . ?" I think that applies to Coca Cola, and Campbell Soup too.

    Ron

  • Report this Comment On April 26, 2010, at 2:05 PM, CAPTAINWACK wrote:

    Face it folks, GM will be buried in debt for life and then some.

    The best part is GM vehicles are now being produced by disgruntled employees whom in turn really don't care about the quality of the product. That's why GM makes 4 of the top 10 unreliable vehicles in the country.

    Was I the only person that questioned why GM got a 2+ billion dollar bailout on new years eve?

    Yes, when Americans were partying like mad dogs and hope was in the air for a better 2010. GM took another 2+ billion and not a word was said about the bail out money in the press.

    Come Friday morning with millions of people still reeling from the night before a small article caught my attention pertaining to more bail out monies going to GM. After that nothing was ever mentioned and it all went away, nice and quite.

    Nobody was paying attention and that's the way the Obama admin wants it.

    I can't wait for November.

  • Report this Comment On April 26, 2010, at 2:07 PM, plange01 wrote:

    the best headline in the fools history!!.GM the bankrupt disgrace must be forced to speed up the sale of its remaining assets repay taxpayers welfare checks it was given the be closed by the end of 2010..after the way this company treated its stockholders accident victims and other crediters with its obama inspired pre packaged fake bankruptcy there is no place left in america for this company or obama...

  • Report this Comment On April 26, 2010, at 3:12 PM, TaoOfPatrick wrote:

    Rich! come up here to Michigan,Me and the boys would like a little Sit Down!

  • Report this Comment On April 26, 2010, at 3:15 PM, Ronpad1 wrote:

    Wow - let's not make the board political. The auto bailout, bank bailout and TARP origins dates back before Barry took the oath of office. I'm not being judgemental here. EVERYONE fell asleep at the switch - Dems and Reps.

    Lets hope the country is in a strong recovery. And that we get most of our bailout money back. And the credit would go to both the Reps who originated the bailouts (Remember, "The bill must pass tomorrow or there will be a catastrophy. GB") and the Dems that carried it out.

    I want whoever is in office to succeed for the USA. I want The Motley Fool to succeed. And mostly, I want to make money.

    Ron

  • Report this Comment On April 26, 2010, at 3:19 PM, yosemitebean wrote:

    Rich - You said, "The government can do that … if it's about as dumb as a doorstop"......"IF" its about as dumb as a doorstop????? You mean you STILL have doubts?????. Then you said, "As fiduciary for the U.S. taxpayer, I'd hope our elected representative would make better use of our money, or allow us to make better use of our money. I'll second that motion. To: jellie 123 - I am happy to hear that 240,000 jobs were saved in exchange for the MILLIONS of jobs that were lost in the process. The Dealerships cost GM and Chrysler absolutely nothing to keep open. These Dealerships ARE the ones who pay to keep the Dealerships open. The Dealerships also pay for the upkeep, for the maintenance, for the employees, for the employees training, for the employees sick days and vacations, for the employees healthcare benefits and retirement plans. The Dealerships also pay for all of the advertising costs in ALL of the local newspapers, several of the local radio stations, and the many ads that you see on your own local television and cable channels. GM and Chrysler also REQUIRED all of these Dealerships to BUY zillions of expensive Dealership tools that are required to fix THEIR vehicles. If they designed THEIR vehicles better, then the Dealerships would not NEED to buy so many manufacturers "SPECIAL" tools to repair them. These Dealerships ARE also the ones who have for decades donated to ALL of their local charities, boys and girls clubs, schools, etc. They have also sponsored many of the local events and parades for generations. Not to mention, all of the Dealership PARTS that were used to fix ALL of these thousands of vehicles, at all of these THOUSANDS of Dealerships nationwide that were closed down for one reason or another. When the government got involved and allowed GM and Chrysler to close over 4,000 dealerships, and now, they are wondering why they are NOT selling as many vehicles, as many parts, or as many special tools as they had been. And, then wonder WHY so many people are unemployed. NOBODY is going to drive 100 miles one way to get an oil change, or to buy a car in one of the LITTLE dealerships that remain open. They closed some of the BIGGEST Dealerships in the nation. And, for what? Many of those Dealerships had to layoff many of their employees, others went out of business completely, and some just retired. Millions were left without a job in cities and towns all across this nation. Local Charities lost many of their biggest donors. Boys and Girls Clubs across this nation lost a big portion of their funding, local events had to be cancelled, and so it goes. To: wigginsrl - I also believe the doorstops should be totally left out of this. Many doorstops around the world have been overheard complaining about the comparison made. I believe the doorstops are owed an apology.

  • Report this Comment On April 26, 2010, at 3:53 PM, Milligram46 wrote:

    Ya, sell it to the Chinese, and hand the Buick brand to the largest car economy in the world, projected to be buying 45 million light vehicles A YEAR by 2015 - in a country where GM is the number one importer and Buick the number one import nameplate.

    Ya - lets gut the US auto industry in one fell swoop of branding disaster by having a fire sale to the Chinese and then walking away from any further revenue, or the taxes that would be collected.

    Less than two years ago the prediction was we wouldn't see one penny from GM and it would go Chapter 7 anyway. So what next...

  • Report this Comment On April 26, 2010, at 4:02 PM, Superdrol wrote:

    Great article. Chrysler did the same thing as well. Get the money and go bankrupt. Don't think though for one second that this wasn't politically motivated. The UAW contributed and campagined hard to get Obama in office.

    Plus Chicago politics are corrupt by nature, that goes without saying (Rod Blagojevich anyone ?)

    The Treasury Dept just needs to write off the loss. GM will never pay back the 50 billion they recieved, plus this little short-circuit in bailouts completely negates 'capitalism'. What this is is 'pseudo-capitalism' at best.

    I'm sure the union employees are still complaining that they are not being paid enough.

  • Report this Comment On April 26, 2010, at 4:49 PM, coolerbill wrote:

    Man, what has happened to TMF? I thought this place was about making money. Now it's just another mouthpiece for the ranters? Life is too short and there are too many opportunities out in the real world to wade into discussions like this. C-ya

  • Report this Comment On April 26, 2010, at 4:57 PM, knudfool wrote:

    When comparing Ford to GM. Have you considered the debt Ford has! After subtracting Cash I have that at around 100 Billion. Other than the Government Debt does GM have other debt? If no then recompute your comparison and GM does not look that bad. I also thought they got deeper concessions from the union. So back out the debt and recalculate.

  • Report this Comment On April 26, 2010, at 5:03 PM, yosemitebean wrote:

    To: coolerbill - TMF does not have a problem, YOU seem to have a problem. It wasn't a discussion, it was a statement that I made. Why don't you head over to the cooler and catch up on some gossip instead. Have a nice day. C-ya

  • Report this Comment On April 26, 2010, at 5:14 PM, 789pol wrote:

    Well I lost $44,000 in bonds I had held for 5-6 years never in this world thinking this debacle would happen. I want my money back. I grew up with GM and now wish they would just go away. The government has no business helping them anymore. Government help did not prevent me from loosing money on a bond. I am really mad as hell about this. It is my retirement money they stole.

  • Report this Comment On April 26, 2010, at 5:28 PM, mtracy9 wrote:

    Whatever the public gets stuck for on GM (if anything), is a pittance compared to what taxpayers have been stuck for regarding the Bush gang's military adventure in Iraq, which has cost us $10 billion a month, going on 8 years.

  • Report this Comment On April 26, 2010, at 5:33 PM, Cblaha wrote:

    Well before we make these comments I suggest reading a book "Why GM Matters". You will read the thousands -- tens of thousands of peoples lives changed for the better with GM. This book will make any former employee proud. My father retired there. The company wasn't perfect and his stock isn't worth a thing. But he, and thousands others and their supplying co's benefited.

    Enron was a fraud. GM was stupid.

    You have to monitor your stocks. If you lost maybe it just wasn't GM's fault. Maybe your own -- I mean it's fall wasn't exactly a surprise.

    My father passed a couple weeks ago. We are buying the "new" GM stock for the kids. But they will have to read the above mentioned book first. This is not the typical corporation BS. You have to read this book to understand what percent of the GNP this company provides. It's the 2nd largest buyer of information technology (2nd to the govt).

    The rippling effect -- that is why it matters.

  • Report this Comment On April 26, 2010, at 5:37 PM, winchester243 wrote:

    GM made a big deal about repaying the loans early. One might ask "how did GM pay the loans back ahead of time despite ongoing losses?"

    Well easy, with new TARP money dummy.

    http://www.foxnews.com/politics/2010/04/22/grassley-slams-gm...

  • Report this Comment On April 26, 2010, at 5:37 PM, Cryptblade wrote:

    Jellie123, are you serious about the "jobs saved"?

    First of all, that's a figure from "the gov't" - the very people in bed with GM and bailed them out with $50 billion TAX PAYER MONEY. Just like the gov't lies about jobs created in other times - the "jobs saved" is also a lie.

    Second - WHO CARES?! Even if 240K jobs were saved - they do NOT add up to $50 billion in value; not in taxes, not in $ pumped back to the economy, not in even in humanitarian value - because I bet if you add up all the life insurance value of each of those "saved" jobs, those people are not worth $50 billion or $43 billion! And of you add up the cost of what the gov't would pay in unemployment, food stamps, and other aid to those 240K jobs saved, it would STILL be less than $43 BILLION.

    Either way you look at it, the gov't decided to sleep with these ppl and spend our taxpayer money away. The only satisfaction that the gov't has is that they get to prop GM up and throw GM under the bus whenever they want. They basically bought a $50Billion sock puppet.

  • Report this Comment On April 26, 2010, at 5:39 PM, Ronpad1 wrote:

    Mtracy9 - good insight into part of our problem. It's a shame we didn't understand the "Special Ops" inventment possibilities with Halliburton. GM was small change.

    With their incredible "NO BID" contracts - and then outrageous contributions to the RNC. Wow - where was The Motley Fool Special Op's recommendations when we really needed them? We coulda cleaned up. HAL moved from a high $4 level in 2002 -- straight up to the mid $50's in 2008. Look at the chart.

    Of course the first thing President Obama did was issue the restriction on "No Bid" contracts, and costs fell mightily. I'll bet Rush Limbaugh lost a ton when HAL dropped.

  • Report this Comment On April 26, 2010, at 5:39 PM, PoundMutt wrote:

    How much of a booming economy will the USA have when all the auto workers in the UAW are unemployed or making fast-food restaurant wages?

  • Report this Comment On April 26, 2010, at 6:04 PM, TMFDitty wrote:

    @TaoOfPatrick:

    Ha! "Come heavy or not at all," eh?

    Thanks for the chuckle.

    TMFDitty

  • Report this Comment On April 26, 2010, at 6:04 PM, TIQSURF wrote:

    Doorstop? I am a government employee and have been called many names, a lot of them worse, but really...Doorstop? Because let's face it; that is exactly what the government is going to do.

  • Report this Comment On April 26, 2010, at 6:33 PM, buntyp wrote:

    This is an excellent article. The Govt. could find takers for an IPO value of 43 Billion, (Maybe the Union), if word got out that the Legacy costs now seem to be bourne by the Govt.

    And, I am not sure if that is a direct Govt. Motors contribution.

    The posit. here is a Sick Joke. If the company can never see daylight again, & they know it, how will they explain their continuing need for direct Govt. support.

    If they were seriously trying to raise anything like the 43 Billion, they should be putting together, right now, a Prospectus for such an IPO offering, because if they wait until another 'Bail-out' is needed, who would be the takers of any IPO?

  • Report this Comment On April 26, 2010, at 6:55 PM, jerrkowa wrote:

    Remember WW2 when the auto companies stopped making cars and totally converted to defense production. While it is not likely to repeat, no one can say for sure that their won't come a time when we will again need their production capacity.

  • Report this Comment On April 26, 2010, at 7:34 PM, Buckeye46 wrote:

    The Human Factor be damned. This is Taxpayer money taken by FORCE, given to a company that will never work it's way out of debt and administered by a government that really doesn't give a damn (sorry, a PARTY that doesn't give a damn). Keep buying FORD and Ford products and stick it to this administration( and Buffett).

  • Report this Comment On April 26, 2010, at 7:47 PM, richsue3 wrote:

    Seems to me we have forgotten that GM stiffed all their previous investors and relieved themselves of debt only to start out again FRESH and still having a loss. This company has nowhere to go but down and as an investor I have very little faith that my securities with this company would be any safer than before.

  • Report this Comment On April 26, 2010, at 8:00 PM, Su37rn wrote:

    The one foreign car maker that made money last year was Subaru.

  • Report this Comment On April 26, 2010, at 8:14 PM, Bazillionaire wrote:

    Well as a Canadian, I hate bailouts of companies that make bad products. GM for years dug their own grave and then we pay to bail them out. Well I look at it this way. If GM wer gone and the demand for cars was say 10,000 units, then consumers would buy something else. If the other automakers were at peak output, then they would need to staff up to buld these units. So supply will meet demand. Since most of the automakers produce in USA and Cnada, one of them would enjoy the new demand and perhaps hire the terminated GM workers.

  • Report this Comment On April 26, 2010, at 8:38 PM, Philorida wrote:

    When the bondholders that had a stake or ownership prior to equity holders got screwed by the Obama administration, that was it for me, and is one of my beefs with this Administration. Forget about the 8 Billion repayment, because that was just publicity and shows you that money is fungible. That is what has been reported. I would have to look at the Cash Flow Statement to really see if they did make money. Remember that they might be able to carry forward all those losses prior to the bankruptcy and will not for some time show any earnings which is different from cash flow. That doesn't mean that they are not making money. But without public documents, GM can make claims. Again, what is important is their FCFF (Free Cash Flow to the Firm) or FCFE (Free Cash Flow to Equity), which is the cash flow after capital expenditures and working capital. Everything else right now is accounting gimmicks.

  • Report this Comment On April 26, 2010, at 9:03 PM, desperado57 wrote:

    I'm just thinking that if and when the valuation goes up to a "break-even" point, if the govenment sell the $43 billion in stock, won't that depress the stock price drastically, and then anyone who buys the stock will be hit all over again!

  • Report this Comment On April 26, 2010, at 9:16 PM, Verbauwhede wrote:

    aqua255

    jellie123 not only is more humane than you, she (I’m guessing) is also more right.

    First of all, unless you have a time machine, there is no way to do now what should have been done back then. Whether all those workers should have been trickled into the workforce or not, they weren’t, and the misery that a for-real, all-out bankruptcy would have caused would have been immense.

    Second, there was lots of analysis at the time that showed unequivocally that if GM had gone out of business, it would have produced a catastrophic ripple effect that would make the present recession look like almost nothing.

    Third, allowing the US manufacturing base to disappear was super-dumb. The idea was that just as American workers migrated from agricultural jobs to manufacturing jobs, they should migrate again from manufacturing to service and/or knowledge-based jobs. Well, it didn’t happen and it won’t happen. America cannot continue to borrow to finance trade deficits forever. When something can’t last forever, it stops eventually. America has to re-industrialize sooner or later – to stop importing foreign manufactured goods and to generate an adequate supply of jobs. If American workers can’t compete with cheap foreign labor, then the only answer is tariff barriers.

    Ultimately, when the cost of energy drives the cost of transport through the roof, the wealthy countries will be those who produce close to what they consume. At which point, the US will count itself fortunate to have retained a domestic automobile manufacturing sector.

  • Report this Comment On April 26, 2010, at 9:33 PM, porchguy wrote:

    Rich, you are entitled to your opinion, right or wrong.

    If it wasn't for GM or Chrysler, then millions of people, even ones that made money from jobs that were created from the money that these workers put back into the economy would have been out of jobs like a lot of them are now.

    The old saying goes, "How GM goes, the rest of the world goes."

    Since the rest of the world in in trouble now, do you people finally believe that saying yet?

    We are all to blame. Everyone is Greedy. The difference is that people, like the Fools on here use their own hard earned money to try to make the 60% and 30% returns on their money like David and Tom are trying to help us to achieve. The other part of greed that is bad are the people that were on Wall Street that used greed the wrong way and that way was to use other peoples money to make themselves filthy rich while giving nothing back to the people for using their money.

    At least GM produced a product for the money you spent on it.

    I read above from one of the fools that GM had 4 out of every 10 GM cars listed in the poor quality group or something to that. That might have been in the past, but it is far from the truth now. I've only ever owned a GM car and loved everyone of them. Did some of them have problems right from the factory, yes they did. I had a van that the transmission went bad at 1500 miles and had to be replaced.

    But, on the other hand, all you fools out there that think the foreign cars are the best, then why do they have service shops. I've seen in those shops such as Honda's, Toyota's, etc. cars that were new and had problems, so if they are so good, then why do they also have service shops for there cars, Not just for an oil change.

    As a fool I also want those 30% plus gains, but I don't want to take someone down to get it. I want it the right way.

    The unions did not ruin the auto industry, or the steel industry, or the textile industry all of who have put a large part of their business overseas. How about the computer business, do they count? Dell is all overseas.

    It was the unions that started to gain strenght after WWII that created the middle class in this country and it is slowly disappearing because of the unions lack of membership.

    If you don't believe that, just look at our pay scale. It is a fact that Americans are more productive than anyother county, but yet out average hourly pay has went down over a $1.50 in the last 10 years. Why? Less union membership. Most people out in this country don't realize that when the big unions negotiated for their workers that other businesses had to pay more money to compete, which now they don't.

    It was said by someone above and it could have been Rick who wrote this article that GM still owed the 43 billion to us, the taxpayer int the stock that we own in the company. But, what wasn't said about that is that at least we got something for that money. Now whether we get it all back when we sell the stock or not, only time will tell,

    But, when Ricks says, get the money back and the hell with GM from now own is completely foolish, No pun intended. LOL

    With NAFTA having taken a lot of our jobs out of this country, that makes no sense at all to me. It only makes me think that he is jealous because maybe he had to go to college to get a good paycheck every week and not get one from GM.

    Here are some facts: Bush 41 started the NAFTA process before he left office and Clinton signed it into law. Clinton let Greenspan talk him into the deregulation of the banking industry on Wall Street and Bush 43 could have put the regulation back on, but he also listened to Greenspan. Now we can see that the damage was done by both parties.

    It isn't the way GM was run or the unions, the problem is with our government. Have you noticed and I'm sure you have that when a politician is in office they always complain about how they can't live on the $170,000 year salary they get, not counting the million dollar expense account the get for their staff, which they pay hardly nothing to, but when they leave office they're all millionares.

    They are the root of the bad part of greed.

    Have you also noticed that they are always saying our founding forefathers new what they were doing when they made the constitution. Of course they new what they were doing. They fixed the system so that you can't vote them all out of office at the same time and they have no term limits, only the president.

    Our lawmakers have passed amendments to the constitution on the things they want,but not on things that go against them.

    Rest assured that every time they vote the first think which way they vote will hurt them the least.

    When Bush was in office and Enron fired all their employees like was said above, if the word stimulus would have been brought up, it would have passed. Heck, Paulson, the then Fed Chairman, was from Wall Street and Bush was good friends with Ken Lay.By the way, have you ever seen someone die of a heart attack and the wife have a closed coffin. I'm sue it has happened on a few ocassions, but that is what Ken Lay's wife did after he died a few days before sentenceing.

    Another funny thing. Before the watered down health care bill was passed, Obama was in Hawaii vacationing. Also, by chance, so was Rushbo. Now if you're having a heart attack, wouldn't you call 911. Not the $40,000,000 + per year Rushbo. He called his girlfriend (seems he has trouble keeping wives) and she called 911. Then when he was released he gave a news conference saying nothing is wrong with our health care and he had the best a person could get. Two things wrong with that. The hospital new he had the money and the second thing is they didn't care because Hawaii has a type of Socialized Medicine. Funny story. It's funny that the white house didn't pick that up.

    I know I'm getting off Ricks article on GM, so I just end by saying to all the fools. When these so called Motley Fool Columists write their columns, they do give us a lot of facts, in fact a lot of them write the complete opposite of their fellow columnists write, but after the facts are gone they give us a ton of what I called "Their own adgenda". Maybe they have a lobbyist pushing them. LOL

    People even fight over the interpretation of the Bible because it has been written and rewritten and the writers left out what the wanted to and put in what they wanted to, so that is why I only put in a grain of thought to most of their articles as well as their own personal adgenda's. I only pay attention to David and Tom. They are the one's that count.

    For the measley $99 they have charged me for a years subscription, I've made a couple thousand times that in 9 short months. I've only bought stocks that they've recommended and no others. I guess it is my own little adgenda, but it has worked great for me.

    So, you go CBLAHA. You're one of only a couple that has left a comment on the GM article written by Rich that has put the GM bailout in its true perspective.

    One final thought fools. The Republicans, just today, shot down the motion to bring back to discussion on the floor the bill to put some of the regulations back on the banks, but yet just yesterday I seen where Goldman Sachs, who is under fraud investigation is paying out $5,000,000,000 in bonuses again this year. Wake up Senators, nothing is changing in the banking industry and if it don't we will get hit bailing them out again. You can take that to the bank.

    At least the auto industry has seen the writing on the wall and is doing something about it no matter what Rick Smith (the Motley Fool Stock Advisor) said in this article.

    By the way Rick. You know nothing on how the unions were the driving force to get the middle class. And if you don't believe me, just look now how the unions have been slowly getting smaller and so has the middle class.

    Just remember, what ever the unions got for their employees, salary (mostly college) people got their pay increased even more from those union/company negotiations and until you have set in on those types of negotiations, you have no idea on went on. You can only speculate.

    You are one of the reason why I will only look at what David and Tom are suggesting as well as the Fools in the forums. You have what I call a "hidden agenda", where as the fools in the forums don't.

    Thank you fellow Fools for letting me go on and on and even sway from the original topic of GM at times. You are the only ones, outside of David and Tom that to me has no hidden agenda and deal with facts and for that I thank you.

  • Report this Comment On April 26, 2010, at 10:10 PM, porchguy wrote:

    I also wanted to say this. The demise of this country started when Nixon made it possible for anyone to own gold, which continues to make the dollar worth less and less and Regan who fired the Air Traffic Controllers, which started the downfall of the unions, which made the middle class.

    Sadly to say, even though I'm an independent, I voted for Nixon his first term and for Regan his first term. It really don't matter because Bush 41 started NAFTA before he left office and Clinton signed it. I voted for Clinton both times.

    Then Bush 43 could have put the regulations back on and he didn't. The common denominator her is neither of them, but Greenspan. Clinton listen to him when he wanted deregulation and Bush followed suit by listening to him. He helped create this mess more than anyone.

    I did vote for Obama. I surely didn't want Pallin to somehow run this country, but I guess she couldn't have done any worse, but I surely don't want something to happen to Obama and Biden, because then we would be stuck with Pelosi.

    So, for the record on why in the previous article I got on Republicans worse than Democrats, I proved that I'm all over the street.

    I really think they are all tokens of the rich and no matter who we elect, the same rules and taxes will come down the pike onto us.

    Thank you for listening. Just my opinion

    You go David and Tom. You guys have it together and have made me a ton of money in just 9 months. I'll be a member for life.

    In fact, why don't you offer a lifetime membership?

  • Report this Comment On April 26, 2010, at 10:54 PM, jm7700229 wrote:

    Another narrow focused, narrow minded article from the Fools; another good example of why my subscription is expiring.

    GM wasn't bailed out to save GM and the UAW but to prevent the spread of economic catastrophe. GM and Chrysler need to die slowly in better times, when the jobs will be absorbed by other industries, not precipitously as a result of a financial collapse around the world to which their own collapse would have contributed immensely.

    Unlike the people who don't understand the concept of double entry bookkeeping, I can see that the bailout didn't happen in a vacuum. I didn't -- and don't-- like it either, but I like bread lines even less.

  • Report this Comment On April 26, 2010, at 10:57 PM, DMcLloyd wrote:

    mtracy9 wrote:

    ... taxpayers have been stuck for regarding the Bush gang's military adventure in Iraq, which has cost us $10 billion a month, going on 8 years.

    Are we out yet? How much is Obama paying for this adventure?

  • Report this Comment On April 26, 2010, at 11:22 PM, jomueller1 wrote:

    Governments all over have a strange way of being detached from the people who earn money to feed the parasites. Though sometimes business people enter the ranks of politics it seems they are there for their own profit only. Hear me Mr. Paulson? At the end politicians make decisions to help their reelection, not to help their employers (we, the people...) So I never expect them to make any economically sound moves.

    GM showed over decades they are not able to do business well. Their business started faltering when the last baby boomer was born and they will never recover, no matter what. When I was a sailor experience showed that you could exchange the crew several times and you still had the same kind of people on board. GM still has a cheerleader at the helm but he does not know how to navigate a big business. The Japanese showed the world how to take over markets and the Koreans and the Chinese are good students. The Western World just looks at the shards and tries all kinds of tricks in vain,

    If I look at how poor the world is dealing with the pirates of Somalia I do not see how I could expect anyone to make real important decisions, not in business and not in politics. So GM will falter as will many countries. The cold war was won, the economic war is lost.

  • Report this Comment On April 26, 2010, at 11:41 PM, craistem wrote:

    The author hasn't a clue. Thats as nice as it can be said. I'm sorry the fool allows this from employees.

  • Report this Comment On April 26, 2010, at 11:50 PM, rtichy wrote:

    I think the only thing a mob of people is capable of is violent acts, because a mob of people cannot debate or discuss with any rationality or focus.

  • Report this Comment On April 27, 2010, at 1:15 AM, PrincipleOf3rds wrote:

    No one knows what would have happened economically if GM and Chrysler would have been left to DIE.

    I speculate the mid-west would have turned into a ghost town (e.g. Flint, MI), 240,000 would be collecting unemployment, and that is about all.

    Well, lets take a look at the unemployment impact. At a maximum payout of $1300/month that comes to $312M. Dividing $50B by $312M and we could have supported those ex-autoworkers for 160 months or 13 years. Obviously, this is a ridiculous amount of time.

    Now, using the numbers from the more likely scenario in the article (i.e. $43B - $31B = $12B). This would support 240,000 unemployed autoworkers at $1300 a month for 3.2 years.

    Finally, lets consider what we've done. Thrown away $12B and continued to let the poorly managed company bleed billions more! The year leading to GMs downfall saw a loss of $16B, in 2009 the new GM only LOST $4B (note: reporting for 9 months).

    The bottom line. Demand for automobiles was/is down. GMs DEATH would have reflected this fact. The stronger surviving companies (i.e. Ford, Toyota, Honda, Nissan, etc.) would see an uptick in sales due to the division of GMs market share. The uptick in sales at these other companies would lead to increased production and hiring. Reducing the impact of GM failing. It would also lead to increased revenue for these stronger and better managed companies...making them stronger.

    If you couldn't tell I believe our economy needs to hit the reset button. The Depression was caused by the stock market excesses of the 20's, bank failures (FYI: GM is not a bank), reduced purchasing (happened anyway), bad trade policy(not applicable), and a dust bowl (not applicable).

    Our recent downturn was caused by the excesses of the late 90's (internet bubble) and housing boom of mid-2000's (credit). Unfortunately, we didn't allow the economy to take its corrective course this time....till next time I guess.

  • Report this Comment On April 27, 2010, at 1:19 AM, greyhound44 wrote:

    Only a fool would buy anything with an EE.UU. union label!

    I hope the so called public school teachers are listening!

  • Report this Comment On April 27, 2010, at 1:37 AM, porchguy wrote:

    I'm so glad that all my fellow fools took on this article and seen right thru it.

    That is why I will listen to David and Tom, because they have proven themselves over and over. The magic word in the last sentence "PROVEN".

    Craistem said it all in such a short comment.

    This is why I said I get my advice only from David, Tom, and all my fellow Fools in the forums.

    They don't live in a bubble and know exactly what is going on and why things need to be done the way they are at times whether we like it or not.

    I also like what jomueller1 said about the pirates of Somalai said. He hit the nail right on the head.

    And as far as mobs go like rtichy said about mobs, I don't consider it a mob if we are just taking back what is ours.

    Here's some food for thought. I'll be the first to admit that I have in the past donated to poorer countries that have had a catasrophy like the earth quake in Haiti some token of money. But, what really aggravates me is when our president, no matter who he is sends our tax dollars over and then has the never to put past presents on a commercial asking for not just donations of food, clothing, and maybe a tent or two for them to have housing, they actually ask for "CASH" saying that is the only way they can get help to them quicker. Yea, like Katrina.

    You know what out problem is, instead of staying home on election day, we go and vote for a Rep or Dem and most of the time they're lawyers. There ought to be a constitutional amendment that says if you are an attorney, you can't "EVER" hold a political office. Most in office are lawyers.

    Over the years, they've made so many laws that they won't enforce and so they just go ahead and make more laws that can't or won't be enforced.

    Thank god of Youtube. At least we can go back thru the years and see them actually say the complete opposite of what the said on camera in earlier years.

    Of course being politicians, they change one word in the sentence to try to make us believe that it is us that didn't understand what they said.

    This is the best news letter I've ever seen.

    The Fools on here do not live in a bubble and are some of the smartest people, when it comes to the hidden agenda that not only the politicians have, but some of the stock advisor writers that The Motley Fool has.

    Keep on Fools. It is nice to see that there are people that can see through the bubble these people live in and want us to think it doesn't exist.

    I'm not perfect, but the only mistake I've made in years is not joining this newsletter years ago when I first heard about it.

    I guess the say, "You can lead a horse to water, but you can't make him drink" applied to me, until I decided to take the 30 day money back offer and started reading the forums and thinking that a lot of the Fools in there thought like me and had a lot of great information on stocks, that I hadn't thought about.

    Before joining this site I was a mutual fund guy and did make some good money over the years and don't get me wrong, there are some good funds out there. But, it took you Fools to make me realize that the way to make a fortune, whether it be big or small was to eliminate the middle man (mutual funds) and to get as smart as I could as fast as I could on purchasing the stocks individually.

    Thanks to all theFools for educating me.

  • Report this Comment On April 27, 2010, at 1:46 AM, porchguy wrote:

    Oh, the public school teachers are listening, but they also live in a bubble and think it won't trickle down to them.

    My question is why, in their minds, do they think that all the levies that are failing in their school districts, except for the renewals, It's easy. That's why you are seeing more of them on the news. They think we can't live without them.

    Look at the bigger picture. The so called elite school of business "The Warton School of Business" where so called people like Trump went to. How many of those grads have filed bankruptcy. I know that most come out of there as good business men, but it is like a bushel of apples. Put one bad apple in a bushel of good apples and a week later the whole bushel is rotten. Does this sound like our politicians or so called great CEO's.

    I rest my case.

  • Report this Comment On April 27, 2010, at 5:20 AM, sonrisa1 wrote:

    Typically a few Republican? morons blame Obama for everything that happened during or as a result of Bush/Cheney years, totally brain dead or racist, Republicans are morally dead, just try to help USA not continually blame others & hinder recovery, you are a disgrace just undermining your country. GM was going down hill for far too long & would still have bombed even without the crisis as with other US automakers, who have produced unsuitable vehicles for too long.

  • Report this Comment On April 27, 2010, at 5:25 AM, sonrisa1 wrote:

    When I first saw this thought that at last somebody was coming to their senses about GM crops & telling Monsanto et al to get lost they have cost US health dear in order to make large profits(from selling even more pesticides & other chemicals) regardless of dangers & conned farmers.

  • Report this Comment On April 27, 2010, at 8:49 AM, katheter wrote:

    Yes. Let's just let other countries engineer and manufacture things. We'll just let Wall St. design toxic investment products designed to fail. It's OK, they'll take out insurance on them. Wake up people! The auto industry gave us the middle class and the prosperity that goes with it. No middle class...down goes consumer spending etc. Other governments are helping their auto companies. They call it national health care. Also, next time drive an American car before you mouth off. They're not your '71 Pinto any longer. I love my Cadillac CTS. The worst car we ever owned? A Lexus. The oil turned to sludge. My neighbor's Tundra...the frame rusted out. I don't have to tell you about the Toyota unintended acceleration problem; do I?

  • Report this Comment On April 27, 2010, at 9:22 AM, maximummm wrote:

    Loosing money to keep going with indigest blind production of million of new cars every years show how anarchy is running wild in the market economy.

    For GM as long as money comes in doesn't matter what is supposed to goes out, just delay the payment and go on bankruptcy once in while.

    God bless America and nuke it all when you'll loose the game.

  • Report this Comment On April 27, 2010, at 9:28 AM, Jason87467 wrote:

    I can see why this site is called "fool". Only fools would think like the content of this blog.

    So even if GM pays it's loan in full, you want it to disappear. How about all the lost of jobs? I guess you don't care about major industries lost to foreign countries. That is what is slowly happening and I feel sorry for the younger generation.

  • Report this Comment On April 27, 2010, at 10:38 AM, thorw wrote:

    No need to call China. Since the US people now own lots of companies, seems to me more like communism than capitalism. I could maybe believe socialism is creeping in, but since the health care reform is still going to end up paying out to lobbyist and HMO buddies, it looks like the current brand of communism in the world.

  • Report this Comment On April 27, 2010, at 12:01 PM, bear1010 wrote:

    The main reason that GM and Chrysler were bailed out by the Government was to save Union jobs. The UAW got favorable treatment in BK and the bond holders got screwed. The UAW at Delphi got full pensions and health care while the salaried worker got screwed. Since the Gov. ownes 60% of GM, they were callings the shots. There is no question that Obama favors unions.

  • Report this Comment On April 27, 2010, at 12:32 PM, ET69 wrote:

    To Aqua225,

    Great advice about how business should be cold and heartless and the human factor is irrelevant. Gee that's the same attitude the Czar took in 1917 ...and you might want to read Tale of Two Cities while your scrooge heart is at it.

    To Thorw,

    Say what bro? Man are you clueless about even BASIC definitions about capitalism and communism. At least read some Adam Smith and Karl Marx they will clue you in and while you are at it stop smokin that stuff or drinkin dat hootch!

  • Report this Comment On April 27, 2010, at 2:46 PM, polenium wrote:

    Good article. Couldn't agree more on Geithner.

    Lest we forget, GM is only nominally a shoddy car manufacturer. It is primarly a bank and defense contractor. Those income streams should be scrutinized and exploited.

  • Report this Comment On April 27, 2010, at 3:34 PM, Superdrol wrote:

    GM/Chrysler's job losses are overblown to the most extreme extent. America needs better skilled workers, and the union wages being paid to screw in a light bulb are over. Union employees should have never been paid as much as they did to screw in a light bulb (if they were drinking or damaging plant equipment so they wouldn't have to work).

    The bankrupcy of GM and Chrysler has been beneficial in flushing out manual unskilled labor and also investors who did not do their homework and lost all their money.

    I don't have any compassion for either the union boys or the retail investor buying those junk bonds.

  • Report this Comment On April 27, 2010, at 4:18 PM, jmw8827 wrote:

    For those that have stock now in GM (mtlqq) - when it says that GM will be selling stock soon to the public - is it the same mtlqq stock or will they kill that and start a new stock symbol? I know this sounds dumb - I am new to trading and can not find anything on this subject.

    If they kill the mtlqq stock is it devalued to 0.00?

    It keeps on the board selling and people are buying and I don't understand that.

  • Report this Comment On April 28, 2010, at 4:18 AM, BuyBritish wrote:

    This truly is a foolish rant.

    Why no mention of the fact that Ford stock has traded at almost double todays value?

    I get that you dont like government dollars invested in US manufacturing, but to suggest true value against todays stock prices is just plain dumb. To suggest they sell now is even dumber.

    Amateur.

  • Report this Comment On April 29, 2010, at 2:19 PM, HOGridin wrote:

    I, and many stock holders and bond holders of old GM, will never trust this auto giant, a global entity at best, not Amreican manufacturing treasure. More and more new models are imported from Canda, Mexico, Korea... the answer to the Mustang in US the muscle car race? A built in Canada, designed in Korea Camero.

    Tax payers will get slim to none of their money back, what kind of market cap will new GM need to make the stock worthwile on the market for us to recoup our money?

    Ford may have debt, but they ahve winning designs, they are taking market share in the US almost at will and recording great growth BRIC sales.

    I have been too busy buying two-wheeld transportation for our family the last 5 years, but when we replace our 3 Ford Taurus and Windstar, I will not even consider GM products.

  • Report this Comment On April 30, 2010, at 2:29 PM, HuntFishMN wrote:

    Does anyone have any numbers for what actual GM stockholders lost in the "bankruptcy"? Correct me if I'm wrong, but there had to have been billions in losses for shareholders that will never be returned. And for all of the people that think they didn't own any shares of GM, one look at their mutual funds in their 401k's would tell them otherwise.

  • Report this Comment On April 30, 2010, at 4:03 PM, mikempp wrote:

    this person (being nice) has no regard for the American worker, with unemployment as it is, can you imagine had we let the auto makers fail? let alone the future for our children? he ought to be ashamed.....

  • Report this Comment On April 30, 2010, at 4:06 PM, mikempp wrote:

    wonder how many shares of toyota this guy owns? or maybe a dealership? has to be a connection!

  • Report this Comment On April 30, 2010, at 5:08 PM, DonDagenais wrote:

    What the government is temporarly delay the inevitable - a dead GM.

    And to help put things in perspective, the auto baliout cost was about $180k/job. Since half of the US does not pay Federal taxes, this means that the chance of this becoming a win-win situation is slim.

    Why are there so many socialists on this blog anyway?

    The American (and Canadian) factory worker lost out when their wage demands exceeded the true value of their labour and their jobs were shifted offshore.

    We are the world blah blah blah. And now you realize that in this Global economy, your job can be moved anywhere on a moment's notice.

    I personally like computers over people. They never strike, go on vacation, or require handholding because of some perceived transgression by management. Thus I ran a high tech company with a 5 to 1 ratio of computers to people.

  • Report this Comment On April 30, 2010, at 6:09 PM, UserNameHerezzzz wrote:

    If GM would just come out with an ELECTRIC version of it's new Camaro, they would soak in the cash like a giant sponge. Or even a Camaro that operates on the same technology as that dorky looking Volt. The electric cars have to look cool and sexy or no one will buy them. Produce an electric Camaro, and I'll buy it. Take a tip from the Tessla, but make the cars affordable to the average American. Let's say $25K, alright GM?

  • Report this Comment On April 30, 2010, at 6:43 PM, mscott2003 wrote:

    Back in 1990, the Government seized the Mustang Ranch brothel in Nevada for tax evasion and, as required by law, tried to run it.

    They failed and the Ranch was closed. Doesn't this show us that if they can't run a brothel then they surly can't run a car company or simply return our money!

    Did anyone expect otherwise?

  • Report this Comment On May 03, 2010, at 4:02 AM, ogital wrote:

    In the next 3 elections we should send the incumbents packing and then the idiots in Washington will be thinking of the voters when they vote for any proposed bill in Congress.

  • Report this Comment On May 06, 2010, at 3:31 PM, dedreyer wrote:

    We take from those that are successful and give to those that are not - now what could be wrong with that model?

  • Report this Comment On May 07, 2010, at 2:36 PM, mowris wrote:

    Does anyone remember government cheese??

  • Report this Comment On May 07, 2010, at 10:31 PM, jeffhre wrote:

    TMFTomG'

    Don't underestimate the contributions of having domestic telecom businesses, retail industries, auto industries and the investing and brokerage industries. The loss of Enron, Kmart et al would not portend the death of their respective industries.

    That is what the Geithner, Treasury and the Bush administration realized would be part of our efforts to grow GDP, avert a depression and normalize balance of trade. Though these domestic industries continue, without GM and Chrysler, Ford and the US auto industry would be discontinued.

    Without GM and Chrysler, Fords suppliers would have been destroyed and Ford would not have survived the liqiudity crisis. Seems likely in hindsight, the resulting extended recession and loss of hundreds of thousands of jobs would have meant a very long delay in untangling and restarting the mess that was left, into new auto makers.

    US auto market share worldwide would consist of the start-up Tesla and the few if any companies able to avoid collapse, by holding on long enough to supply the remaining foreign firms that could be restarted. Although most US and Canada based suppliers would have dissolved by that point.

    Perhaps the US balance of trade would not have collapsed from the auto industries death, but only if rest of the car industry worldwide was devastated for enough years from a shrinking market to allow the newly built US auto industry to compete.

    Jellie123 wrote that 240,000 industry layoffs were averted. How much tax revenue would that equal. I don't even know how to add it all up, but balanced against an average of $40,000.00 a year just in unemployment benefits and government support alone, that would be 9,600,000,000.00 for the first year, which doesn't include lost tax revenue and the multipliers created by all the jobs and services that depended on these workers.

    And GM and Chrysler did go bankrupt as expected, which ended their deal with Tony Soprano, though the government served up the DIP financing.

    Your suggestions are an option, but considering the wrenching consequences, and costs, of a potential extended depression, I'm not sure it constitutes a good bet for investment.

    I strongly agree that they should pay up, and hire a management and board that runs the business well enough that they never belly up to the government trough again.

  • Report this Comment On May 17, 2010, at 8:18 PM, loki2009 wrote:

    I have a better idea.

    If the US (and Canadian) taxpayer paid for the bailout - forget about the US and Canadian governments getting their money back. Just give every US and Canadian Taxpayer a pro rata share of the government ownership and let them decide what to do with it.

    Enough of this nonsense of double screwing the taxpayer.

  • Report this Comment On January 13, 2011, at 8:50 AM, wmjmurphy wrote:

    Never should have bailed anyone out-just corperate welfare. That is America-privatize the profits and socialize the losses. GM, the banks all of them should have failed, in fact they all did. Would have been real hard times for five years but with a honest gov. could have set up a bankin g system that works for the people & gotten rid of the federal reserve-the goverment would simply spend the money into circulation. The federal reserve is the biggest threat to the American way of life. America it is gone and it ain't ever coming back. Start looking for a place to go when the US breaks up like the old USSR

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