20 years ago Chrysler paid back their government loan early. Now GM is paying back their government loan early. This is the only industry that doesn't treat a government loan as a gift.
Where are all of those people that thought that all of the tax payers would be paying back this loan?
Congratulation American Auto Industry
They're making a payment on it not paying it all back.
But better than needing more...for now.
EARLY
From an MSNBC article.
...The company also said it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It plans to repay the debt over the next eight quarters, but could pay it back as early as next year. But the money will come from funds loaned by the government. ...
http://www.msnbc.msn.com/id/33961851/ns/business-autos/
Paying gov debt with gov loaned money. hmmmmm...
Loan me 6 million, and I'll pay you back $40. How is that for a deal? I'll even pay you form your own money that you gave me.
Let them go broke. Then they would have to work today like everyone else. Instead, today is 'hunting season day off.' GM gives their employees the day off to go hunting. They try to say it's a late Veteran's Day off but everyone knows better. Let them go broke. Please. Then someone will have to make a decision that makes sense.
its fake money, they just posted a 1.3bn los for the third quarter. they don't have that money to pay back, it will just be part of the government funds coming back to the government. Contrast that with what Goldman and JP Morgan were able to do, they paid all the money back at a 23% return on investment to the government.
American Auto Industry Rocks wrote:
20 years ago Chrysler paid back their government loan early. Now GM is paying back their government loan early. This is the only industry that doesn't treat a government loan as a gift.
What a f***ing idiot. If there's any doubt that the Obama Cult is incapable of managing money it's this. This is a massive check kiting scheme.
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DETROIT - General Motors Co. said Monday it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30, far better than it has reported in previous quarters and a sign that the auto giant is starting to turn around its business.
The company also said it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It plans to repay the debt over the next eight quarters, but could pay it back as early as next year. But the money will come from funds loaned by the government.
GM said its improved performance was fueled by new products including the Chevrolet Camaro muscle car, and the Chevrolet Equinox and GMC Terrain midsize crossover vehicles. The company's top sellers through October were the Chevrolet Silverado pickup truck and Impala full-size car.
The better showing also reflected lower debt payments. The automaker paid $250 million in interest for the latest period, far lower than the $1.1 billion it had to pay in the first quarter, before it went into bankruptcy protection. Before Chapter 11, GM was weighed down by a huge debt of almost $95 billion that has since been cut to $17 billion.
GM's global presence helped the company, particularly in China, where its sales of 478,000 in the third quarter increased 6 percent over the second quarter. GM earned $429 million before taxes and interest at its Asia Pacific unit, which includes China, and $245 million in Latin America. It had pretax losses of $651 million in North America and $437 million in Europe.
"We have significantly more work to do, but today's results provide evidence of the solid foundation we are building for the new GM," CEO Fritz Henderson said in a statement.
The company cautioned that the earnings numbers mean little because they don't comply with U.S. accounting standards and cover only the part of the quarter after GM left Chapter 11 bankruptcy protection on July 10.
Even more unusual is the $79.4 billion profit the troubled automaker reported for the first nine days of the third quarter, when it remained under bankruptcy court protection but was able to scrap colossal amounts of debt and other obligations.
"Direct comparisons are not necessarily applicable," said Chief Financial Officer Ray Young. "You can make some judgments in terms of trends."
GM maintains the numbers show a company making progress, riding dramatically reduced structural costs to a far better performance than the $6 billion loss GM reported in the first quarter, the last full quarter for which its numbers met accounting standards.
GM took in $3.3 billion more cash than it spent for the third quarter, far better than the $10 billion the company burned through during the first quarter.
Its third-quarter revenue totaled $26.4 billion, an improvement over the first quarter when its revenue dropped almost 50 percent to $22.4 billion from a year earlier. Revenue was aided by sales boosts in July and August from the U.S. government's Cash for Clunkers rebates.
GM said its global market share was 11.9 percent in the third quarter, up three percentage points from the first half of the year. The U.S. share stayed flat for the quarter at 19.5 percent.
Young said GM accountants are in the process of cleaning up the new company's books, revaluing assets and liabilities and changes to pension and health care costs that came from bankruptcy and a new contract with the United Auto Workers union.
GM expects to meet accounting standards when it reports full-year results for fiscal 2009, but those figures probably won't be released until March.
GM lost $78 billion from 2006 through the first quarter of this year. The gargantuan losses and debt eventually left the company unable to operate without government help.
GM entered bankruptcy protection with roughly $94.7 billion in debt. It emerged with $17 billion, including the $6.7 billion owed to the U.S. government. The government has given GM a total of $52 billion, including $45.3 billion in exchange for a 61 percent equity stake in the company.
Young said the government placed $16.4 billion of GM's loan money into a contingency fund in case sales worsened or other problems cropped up. Now, GM doesn't need the contingency money and can repay it to the government, he said.
But Henderson said GM felt it was prudent not to repay the whole amount in December, in case conditions change.
The automaker also says it will begin repaying $1.4 billion it owes to the Canadian and Ontario governments in December. GM also has paid $700 million on a $1.3 billion loan from the German government to keep GM's Opel division in operation. The balance will be repaid this month, GM said.
Henderson said a "reasonably large" part of the Opel repayment came from GM's U.S.-generated funds, while some came from Opel funds. He said GM is a global company and needs to have flexibility to use the money to run global operations.
The CEO disagreed with a report by the General Accounting Office saying that it was doubtful the U.S. government would recoup all the money given to GM. He said full repayment is a function of stock value, and he intends to make the stock valuable by managing the company well.
"It is my mission to disprove the GAO," Henderson said.
Although GM reported positive cash flow for the third quarter, it does not expect that to continue into the fourth quarter because of the government loan repayments and a $2.8 billion payment to help Delphi Corp., its former parts division, out of bankruptcy protection.
GM has said it plans to sell stock to the public late next year so taxpayers can recoup at least part of their remaining investment. Henderson said they'll be ready for next year, but the timing of a sale depends on capital markets and the company's performance.
The 23% return to the government from Goldman and JP Morgan is illusory. Much of that came from payments to them from AIG. Where did AIG get the money to pay them? The government. The government gave money to AIG, AIG paid it to GS and JPM, who then gave it back to the government, and the government claimed they made 23%. When the government does it it's a brilliant investment, if you or I do it it's money laundering and a federal crime.
I'd like to believe all this, I really would. I just don't. And it bothers me that no matter WHAT happens, the government now has too much invested in GM for them to go under. So they can continue posting losses for the next century, and the government will just continue throwing money at them.
How does a company like ford compete with a company with the bottomless pockets of "Uncle Sam"?
Buy a Ford Product. They are making quality cars and have been able to manage through this crisis.
Those dildos at GM had to get Cash for Clunkers money, bailout money, state of Michigan tax credits, and UAW concessions to make that payment. I.E. 4 welfare support payments. For taxpayers that's dogshit piled atop horsehit piled atop catshit piled atop chickenkshit.
What Obama should do is liquidate GM and sell all the assets. There should be zero GM assets left afterwards.
Next Obama should start a U.S. National Bullet Train project to link the 100 largest U.S. domestic cities with at least hourly bullet train service from 4AM to 12midnight. The project should be headquartered in Detroit, with ALL manufacturing and engineering done in the U.S.
lalalalalal wrote:
I'd like to believe all this, I really would. I just don't. And it bothers me that no matter WHAT happens, the government now has too much invested in GM for them to go under. So they can continue posting losses for the next century, and the government will just continue throwing money at them.
How does a company like ford compete with a company with the bottomless pockets of "Uncle Sam"?
What a great investment eh, and then they follow it up with a predatory lending scam called "cash-for-clunkers," putting even more people into debt that will be securitized that they won't be able to pay off (and, in the meantime, auto sales have fallen off a cliff again).
Just like Ginnie Mae still backing FHA loans, and now the FHA needs a bailout. I mean, I'm so shocked. We could've put much of this "bailout" and "stimulus" money to work building tomorrow's energy security domestically, but, instead, we are propping up a moribund automotive model because it curries political favor.
How do you take a company with 40,000+ employees and one of the biggest market caps on the Dow and turn it into one with 4000 and beholden to the government? Follow Detroit's political and economic model (or California's for that matter).
Blowing.Rock Master wrote:
The 23% return to the government from Goldman and JP Morgan is illusory. Much of that came from payments to them from AIG. Where did AIG get the money to pay them? The government. The government gave money to AIG, AIG paid it to GS and JPM, who then gave it back to the government, and the government claimed they made 23%. When the government does it it's a brilliant investment, if you or I do it it's money laundering and a federal crime.
Correct.
Reading some of the past analysis on GM shows they received a lot more than $6.7B in the bailout. The rest was in return for equity in the company which is practically worthless. As for how Ford is going to compete with these guys it's pretty simple: Ford is a real company with real mgmt and real product lines that can turn a profit. Ford will be around 20yrs from now, GM and Chrysler won't. I doubt the Chrysler brand makes it 36months.
joho wrote:
...The company also said it will begin repaying $6.7 billion in U.S. government loans with a $1.2 billion payment in December. It plans to repay the debt over the next eight quarters, but could pay it back as early as next year. But the money will come from funds loaned by the government. ...
the u.s. is being destroyed by welfare to rundown wasteful ventures like GM, USPS, and the worst joke of all, the Pentagon !