“Just this week we received some encouraging news. Since General Motors emerged from bankruptcy, the auto industry has actually added 45,000 jobs – the strongest growth in a decade.” . . . “What’s more, GM announced that it paid back its loans to taxpayers with interest, fully five years ahead of schedule.” President Obama’s Saturday weekly address April 24th, 2010
This truly a fantastic accomplishment. So, from hearing this stunning example of government efficiency and foresight, it would appear Government Motors is back on the profitability track. We can assume, can’t we, that GM has be making money to pay back the government bailout loans? We invested billions of dollars to save Government Motors and UAW Motors, er Chrysler, and that investment is paying off. Right?
“But the automaker is a long way from regaining its old blue-chip status: It remains more than 70 percent government-owned and is still losing money — $3.4 billion in last year’s fourth quarter alone. And while its car and truck sales are up so far this year, that’s primarily due to lower-profit sales to car rental companies and other fleet buyers.” AP April 21, 2010 by Ken Thomas and Tom Krisher
Wait a second. If GM is still losing money hand over fist, where is it getting these funds to pay back the loans? Is this really the glowing example of government wisdom Obama is touting?
“Grassley said in his letter that a Securities and Exchange Commission form filed by GM showed that $6.7 billion of the tens of billions the company received was sitting in an escrow account and available to be used for repayment.” Foxnews.com April 22, 2010
So, we loaned GM a whole bunch of money. They stashed some of that money in an escrow account. They took that escrow money and ‘paid back’ the ‘loan’ portion of the entire government bailout. The other billions of dollars we ‘loaned’ have been converted to ‘equity’ in that the government ‘owns’ a private company. A private company that is still bleeding money like a head wound. This is success?
Note, the Dear Leader did not say GM or Chrysler had returned to profitability. No, the Great Prevaricator is too clever for that. He touted the jobs created and the promise of a bright future, a future that cannot contain profits. GM doesn’t have a snowball’s chance in Pelosi’s house of ever achieving profitability.
1. The president doesn’t believe in profits at inappropriate times or in inappropriate ways, which is really that he doesn’t believe in profits. Every time GM approaches the possibility of making more money than it spends, the Do-gooding, Busybodies in the administration will find another place to spend the money. Don’t think for one second the UAW isn’t ravenously eying the bottom line. One dime of profit and they’ll fall on it like a coyote on a prairie dog.
2. The enviro-fascists in the administration will insist all R&D monies be spent on developing our next, new, innovative go-cart run by a perpetual motion machine that can only shadow our roads every other Sunday, in the summer. They despise industry, cars, pleasure, safety, and freedom so much, they will forestall any company recovery with their wingnut fantasies.
I can think of no scenario where the fruitcakes on the Left do not derail any recovery of either car company. Once they get their little claws into a business, their basest instincts of destroy and pillage take over. We will listen to the lame-brain media lies and shake our heads as we watch our domestic industry collapse into a pile of bovine excrement. But, we will be right. That counts, doesn’t it?