Obama plans to convert GM loan into gift
posted at 5:45 pm on May 19, 2009 by Slublog
Look on the bright side. We’re going to own a car company! What could possibly go wrong?
NEW YORK, May 19 (Reuters) – General Motors Corp’s (GM.N) plan for a bankruptcy filing involves a quick sale of the company’s healthy assets to a new company initially owned by the U.S. government, a source familiar with the situation said on Tuesday.The source, who would not be named because he was not cleared to speak with the media, did not specify a purchase price. The new company is expected to honor the claims of secured lenders, possibly in full, according to the source…
…In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.
My question is simple: what has GM done to prove it deserves loan forgiveness? According to the story, they still haven’t presented a restructuring plan and in this economy, auto sales are down across the board, which means the profitability we were promised isn’t coming anytime soon, if ever.
My first thought was that it might be to ease the pressure on the UAW, who will soon hold a majority stake in the company, but Ron Gettelfinger sounds increasingly less than thrilled about owning GM. So again, what’s the rationale?
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Yes, a lot of it is control, but it’s about money, too.
Much of what Obama is doing is just creative taxation, or raising taxes without them seeming like taxes. Like collecting money from cap and trade by fighting a mythical problem (global climate hope and change).
Daggett on May 19, 2009 at 8:17 PM
Uhhhh, I have nothing pithy to say I am so dumbfounded that this is actually happening. Someone please wake me up from this nightmare. Never owned a Ford, used to hate them, always haved owned GM but never again. To bad because the new Camaro is an awesome car. Hello Honda? UGH!
mdreb on May 19, 2009 at 8:35 PM
Buy Ford. They have been great for our family for the last 15 years. There were a few before that sucked but the last 15 have been great.
ORconservative on May 19, 2009 at 8:39 PM
1. It is a trial ballon to gauge how unpopular the move would be. It is how the Obama administration votes present.
2. It give GM and Chrysler more time. Obama can’t possibly float them through the entire depression but forgiving he loans combined with a little accounting hocus pocus and he gets to pretend all is well a little while longer.
3. What’s he gonna do, collect?
Theworldisnotenough on May 19, 2009 at 8:59 PM
You have got to be f*cking kidding me.
More wine. I need more wine….
aaaaaaarrrrrrrrrrrrrrrrgggggggggggggghhhhhhhhhhhhh!!!!!!!!!!!!!!!!!!!!!!
pullingmyhairout on May 19, 2009 at 9:10 PM
Well, I just bought a Mercedes. At least they know how to make a decent car… I’ll never buy an American car again. So sad really…..
pullingmyhairout on May 19, 2009 at 9:11 PM
My GM,Chrysler buying days are long gone. Own 2 Fords and will keep buying them unless they take a government handout.
My neighbor owns a 2 year old Chrysler 300. A total piece of crap. He’s beyond furious with it. I warned him not to bbuy it.
roninacreage on May 19, 2009 at 9:24 PM
pullingmyhairout,
Mercedes has had some quality and reliability issues in the past few years, currently Ford has better initial quality. German cars are notoriously expensive to maintain.
rokemronnie on May 19, 2009 at 9:28 PM
Point taken. But it’s fast as hell and it makes this 40 year old mom of two look smokin’ HOT!! tee-hee hee hee hee!!!
pullingmyhairout on May 19, 2009 at 9:32 PM
Obama is much sleazier than the Enron business model.
Enron’s CPA’s also ran Enron IT. Obama regulates cars and builds them also. talk of conflict of intrest. Oh and GMAC is a gov run bank to finance cars. I suspect loan appps for trucks will get turned down.
seven on May 19, 2009 at 9:54 PM
I’ve now heard twice today dealers giving interviews about being closed down.
It is terribly sad, but also criminal.
This story needs more coverage. This is not the America we know
ORconservative on May 19, 2009 at 9:56 PM
This is a taking by the government without just compensation. I can see a shareholder suit on the horizon right now.
unclesmrgol on May 19, 2009 at 11:55 PM
If the government was going to waste our money and perform unconstitutional actions, might as well repaid the secured creditors 75 cents on the dollar, give GM to the UAW, and tell the UAW their pension is now guaranteed by turning a profit at your company. Oh yeah, good light picketing yourself. See the SEIU for tips.
WashJeff on May 19, 2009 at 11:58 PM
What is this “constitution” thingy you speak of?
Fed45 on May 20, 2009 at 12:34 AM
Buy Ford? Hell, buy Honda, Toyota, Nissan, BMW…they all make cars here in the U.S., thus providing jobs.
Fed45 on May 20, 2009 at 12:36 AM
Rationale? It’s simple. Just think of what the logical, practical, moral course of action would be, then expect Obama to do the opposite. He is a Progressive through and through and this is how they act.
JDPerren on May 20, 2009 at 3:04 AM
Fascinating.
It is Congress that decides on how US funds are to be used by the federal government, not the Executive. Congress is the originator of all funding and sets the type of funding and limits on it when it authorizes such funds. The President oversees the use of such funds, but cannot change the type of funding vehicle provided: that is the role of Congress.
Loans are one category of money in which Congress expects repayment.
Gifts are grants, in which repayment is not expected and minimal achievement of any end is cited.
Anyone who has had to go through the internal accounting for funds in the civil service on programs and projects has to deal with this. If Congress wishes to forgive the loan, then it may do so via an act of Congress.
Otherwise the President is corrupting the system using funds in a manner to ignore the mandates of Congress that is the sole authority for originating and determining type of spending to be done. To do otherwise turns the money into a ‘slushfund’. As Presidents are the highest executive authority for the execution of the laws of the land, when this happens it becomes difficult to get accountability unless Congress steps in to protect THEIR power given solely to THEM. Where are the ersatz Constitutional scholars who bemoaned FISA, Guantanamo and the such on this? Please do take to the field against this Presidential power grab… if you dare.
ajacksonian on May 20, 2009 at 6:40 AM
My problem with Volvo and Mercedes, they look like geared more for males than females to drive; maybe it’s just me. There is a sporty Mercedes out there, that’s the only car of the whole lot that I like.
Heh I wish I had an Audi TT car, convertible…or the Pontiac Solstice, convertible as well. I went into a Cadillac/Audi dealership and sat down on that TT car, dang! *this chick’s fantasy car*
ProudPalinFan on May 20, 2009 at 7:16 AM
I thought it was illegal to use taxpayer funds to pay off friends and political allies. I must have missed the chapter on exceptions where liberals and democrats are excluded. Nonetheless there are people in prison for lesser offenses. Perhaps a taxpayer revolt is overdue.
Annar on May 20, 2009 at 7:22 AM
Clientelism.
Hey rokemronnie, we had a conversation a while back about the new Ford hybrids. The Fusion hybrid put up some great long-run mpg test numbers in a trial in DC last month (over 1400 miles on a tank), and I just saw one at my kids’ soccer game last week. It’s a drop-dead gorgeous car (would probably buy the Mercury version tho’). I will be giving Ford/Mercury a look from now on.
The GM hybrids are a cruel joke.
DrSteve on May 20, 2009 at 7:45 AM
Next purchase: California!
Any other failed enterprises we can buy on the cheap so we can flush more of our money down the toilet? It’s so FUN not caring about consequences like this!
aero on May 20, 2009 at 7:52 AM
What a kingly “gift” from The One! He may be a tightwad with his own money, but he sure is generous with other people’s money!
Logic on May 20, 2009 at 7:59 AM
how do the hybrids do in 10 inches of snow? can they push that weight? and what about towing my husband’s fishing boat? (the only consideration in my household)?
will we be able to keep our 2 dodge 4wd trucks?
bambi is doing this on purpose to bring our country to its knees. he is succeeding.
kelley in virginia on May 20, 2009 at 8:01 AM
Everyone should what I’ve done, I own a 1967 Ford F100 fully restored and updated to modern specifications and a 1968 Torino GT that will be finished within the next month or so and completely updated. For fuel economy I have the Harley. I refuse to give any of these companies my money for their new plastic crap and then turn around and give them more of my money in the form of tax dollars. If I do buy a new vehicle in the future it will be a Ford, apparently the only one of the US car companies with any fiscal sense. (and on a side note, the ignition systems on both my old Fords are EMP proof…just in case…I’m just sayin’)
BadMojo on May 20, 2009 at 8:28 AM
Promises. Words, just words. Whatever sells. Whatever produces more fools to be had. As “owners” we’ll be footing all the bills within a fascist regime; only the party cronies will be pocketing all the proceeds, whether there’s profit or not.
Socialism: Lose/Lose
Morons need not imply from the following any condoning of Fascist Germany. Do note well, however, the evolution of fascism. At its last heyday in Germany between the 20th Century World Wars, ethnic German citizens got the economy and business upswing that Hitler promised. Proceed across the ocean to Obama’s America instigating the 21st Century and note well that working, productive American citizens are the ones being deprived in favor of the illegal alien and the international vs. the national interest by Obama’s fascism in government that is ignoring the Constitution while legislating unconstitutional laws, readying the Supreme Court into Socialist mode for a full monopoly of Marx/Alinsky/Soros Federal powers presenting perpetual precedence for further incursion dissolving THE Constitution.
maverick muse on May 20, 2009 at 8:39 AM
No surprise there, that’s what he did with the Chrysler “loan” too. I believe the incentive for GM is “give me your company, and I’ll forget about you owing me billions of dollars”.
And of course, creditors are getting screwed in favor of the UAW again, too. Question – if Uncle Sam’s money was a gift, then how do they get an ownership stake in GM?
hawksruleva on May 20, 2009 at 8:46 AM
badmojo
+1
Right now, if a great deal can be made on a new Ford to counter future depreciation assigned to domestic makes, all together the newer FORD automobile is better made than Honda/Toyota, with great customer satisfaction. The new sedans look sharp, I’m impressed.
It’s a crying shame that Obama got his hands on the best luxury vehicle for the dollar, the new Cadillac. Sigh. The only Caddy we had was an old gold clunker purchased used and abused, but even that was a work of art. Our kids were in such safety buckled into the backseat and we enjoyed such comfort every trip made.
maverick muse on May 20, 2009 at 8:49 AM
So who’s tracking the politics of dealers told to shut down?
We’ve heard from a highly successful Chrysler dealer that he was to shut down in favor of less successful dealers staying open. And that before the list of who gets closed was made public, those chosen to be shut down were goaded into assuming inventory that the factories had to move, with promises from headquarters that the corporation had the dealers’ backs covered.
maverick muse on May 20, 2009 at 8:53 AM
My neighorbor just traded in his Chrysler pu for a shiny new red toyota pu…
He said he would never consider a Chrysler or GM again….
and neither will I.
izoneguy on May 20, 2009 at 9:03 AM
Lot’s of dealers are pushing back and are in the bankruptcy hearings letting their voices be heard….
izoneguy on May 20, 2009 at 9:04 AM
When Obama sees no one is buying his clown cars, he’ll find ways to keep us from buying Ford and foreign cars, you watch.
This man is bankrupting us all.
petefrt on May 20, 2009 at 9:11 AM
I think you mean: This man has bankrupt us all.
katablog.com on May 20, 2009 at 9:19 AM
The parasite NEVER wants to become the host.
VibrioCocci on May 20, 2009 at 9:28 AM
Pretty much. He’ll either subsidize GM and Chrysler or levy tariffs on foreign cars. Because you know Smoot-Hawley worked out so great in the 1930′s.
Doughboy on May 20, 2009 at 9:36 AM
this BO fella is real good at wasting our f*cking tax money. I can’t wait for the 2010 elections to get her.
la.rt.wngr on May 20, 2009 at 9:58 AM
I guess I’ll be buying Nissan, Toyota, and Honda from now on.
jeffn21 on May 20, 2009 at 10:23 AM
I think the plan with these new CAFE standards is partly to destroy Ford, so he can own Ford as well.
jeffn21 on May 20, 2009 at 10:24 AM
15.4 billion to GM and many more to Chrysler converted to gifts. Loans are liabilities but gifts are income. Now ‘The One’ wouldn’t stiff the children of Michigan of much needed tax dollars would he?
meci on May 20, 2009 at 10:25 AM
The third paragraph disappeared from the update at the link.
E9RET on May 20, 2009 at 10:30 AM
I’m wondering how many minority-owned dealerships have been closed.
progressoverpeace on May 20, 2009 at 10:48 AM
I seem to recall Rush mentioning it yesterday. He said it was just a theory at this point, but he’d be keeping an eye on it.
Obama has been so ham fisted that it wouldn’t surprise me a bit. In fact, I almost expect it.
petefrt on May 20, 2009 at 11:04 AM
The TARP bill took care of that concern by putting Treasury in charge of disbursements; then they added the auto bailouts to the TARP program. Which is probably highly illegal since there’s no mechanism (so far as I know) for Congress to abdicate its duties and responsibilities. But since nobody’s said “boo” yet to challenge them in court, the bastards are getting away with it.
Blacksmith on May 20, 2009 at 11:44 AM
Geithner just argued, in his senate hearing, that Treasury looks at TARP as a continuing line of revolving credit. He said that if any TARP recipients pay the money back, then Treasury has that same amount released in TARP, again, to go make more mischief in the private markets.
This is so totally out of control and insane that it boggles the mind. Just unreal. Geithner really needs to go. He is a very dangerous guy. And incredibly stupid, as well.
progressoverpeace on May 20, 2009 at 11:54 AM
I think I’d rather rename GM to Dollar General Motors.
Then they can sell all those disenfranchised dealerships to Big Lots.
James on May 20, 2009 at 12:06 PM
At Notre Dame, Obama said he supported a conscience-clause exemption. Where’s my conscious-clause exemption?
JohnJ on May 20, 2009 at 1:14 PM
So…..as long as GM was owned by ‘evil businessmen’ they had to pay back the $15B loan – but now that the government and the UAW own it we can’t possibly expect them to pay back the loan?
That makes no GD sense at all.
Mr Purple on May 20, 2009 at 1:17 PM
Nothing Obama does makes any GD sense.
He is just following his pastors advice – GD America…..
izoneguy on May 20, 2009 at 1:20 PM
We have two Nissans now…
My last van was a chevy – what a POS….
I wanted to buy “American” and got screwed…
“Buy American” means nothing anymore with a Marxist in charge.
izoneguy on May 20, 2009 at 1:22 PM
That’s OK! I’m NEVER going to buy a car made by the UAW ever again. Good luck with being unemployed jerks!
TrickyDick on May 20, 2009 at 1:33 PM
That’s OK! I’m NEVER going to buy a car made by the UAW ever again. Good luck with being unemployed jerks!
TrickyDick on May 20, 2009 at 1:34 PM
That’s OK! I’m NEVER going to buy a car made by the UAW ever again. Good luck with being unemployed jerks!
TrickyDick on May 20, 2009 at 1:35 PM
This is Obama using the power of the president to loot federal dollars from the treasury, and gift his UAW supporters who helped elect him
This is the reward organized labor gets for bankrupting their employer, and helping to elect a gangster thug community organizer to power.
UAW will become government employees, building government designed cars that will have to be given away to government employees because no one else will buy them.
Skandia Recluse on May 20, 2009 at 3:23 PM
What’s with the green headlines today? With green AND red, it’s very Christmas-y.
hawksruleva on May 20, 2009 at 3:52 PM
I only buy Hondas. Hondas made in Japan.
F the UAW.
daesleeper on May 20, 2009 at 5:03 PM
Like rush said earlier today, the UAW will sell their stake in GM and Chrysler to some sucker keep funding their benefits- what a joke.
Just buy a gas-powered Ford or Toyota- read a review on the Chevy Volt and Honda Insight, it absolutely hilarious how crappy and inefficient they are to run.
jjshaka on May 20, 2009 at 7:25 PM
The rationale is simple, Obama is pandering to the union. If GM goes belly up on his watch, it is bad politically for him. It isn’t that hard.
echosyst on May 20, 2009 at 10:02 PM
Snap of a finger
Stroke of a pen…
It’s MAGIC
$15,400,000,000
Disappeared. Gone
Just like that!
Where did it go?
We all know,
But they don’t care.
The “O” will save us.
CynicalOptimist on May 21, 2009 at 12:34 PM
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