...when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.
But wait! Even that’s not the full story given that GM, which has not yet broken even, much less turned a profit, can’t pay even this puny amount from its own earnings.
As it turns out, the Obama administration put $13.4 billion of the aid money as “working capital” in an escrow account when the company was in bankruptcy. The company is using this escrow money–government money–to pay back the government loan.
Here’s the whole story (not told by the main stream media):
http://www.forbes.com/2010/04/23/general-motors-economy-bailout-opinions-columnists-shikha-dalmia.html
That is sad, if they had started making great cars 30 years ago when it mattered, things would have been easier for them. More economic pain is definitely on the way.
Irresponsible business practices continue…
Vader,
Exactly right,I’m 200% a car guy and the tech in G.M. is there like never before.But they got in bed with the govt and that’s part of the reason Ford is killing them in sales.They realized it and that’s the reason this BS commercial was made.I’m with you on this one,it is a shame.I was a G.M. guy for years,can’t stand by them anymore,as obviously most americans don’t.
I hope Ford continue to skyrocket just to prove the power of keeping govt out of your business is best.Too many chiefs confuse things,especially when they have never ran anything.
Ed Whitacre has run something…He ran AT&T. You are right he has not run a a car company and there were and still are way too many brands to run effectivley.
Bluemoon,
I knew Mr. Whitacre ran AT&T(wonder if it was before the govt.busted up their “monopoly”.Anyhow,I was just saying how comical it is to me that the least experienced in the private business sector administration telling us what’s best.I knew it was a lie when I seen the commercial first air,don’t you have to make a profit before you can pay back a loan?I do agree that G.M. had too many brands.
It’s just ridiculous the way big govt creates problems,then claims it’s the only possible hope for fixing the same problems.
Wouldn’t GM having too many brands be like an investor with too many properties?
No because the have the same car with different names on it. The Tahoe is a Yukon, and Escalade is a Suburban, etc. Because they have different brands they have a President of Cadillac, a President of GMC, A President of Chevrolet. Each of these presidents needs VPs of production, sales, marketing, accounting, each of these presidents have dozens of directors for everything from quality to purchasing. That is the problem with a bunch of brands.
Each brand appeals to different people. So if GM did like Chrysler did with the 300. They sell that one car with different trims that cost from from $20k to $50k. So they appeal across the board with one structure.