Great news: Treasury ups estimate of taxpayer loss on auto bailout to $25 billion

posted at 5:21 pm on August 14, 2012 by Ed Morrissey

Barack Obama has turned up the heat on Mitt Romney recently on the auto bailout.  According to the strategy Obama rolled out last week, Democrats plan to highlight Romney’s opposition to the bailout and the politically-engineered bankruptcies that supposedly saved GM and Chrysler, along with all of the jobs at both automakers (unless you count the tens of thousands of jobs lost at the dealerships shuttered in the bailout).  The criticism of Romney and the claims of credit for success will crescendo into the Democratic convention in the first week of September, trumping Romney’s advantage on economics.

However, reality threw a wrench into the works yesterday, as Treasury reported that the losses on the bailout for taxpayers have grown an additional $3 billion:

The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.

In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.

The report may still underestimate the losses. The report covers predicted losses through May 31, when GM’s stock price was $22.20 a share.

On Monday, GM stock fell $0.07, or 0.3 percent, to $20.47. At that price, the government would lose another $850 million on its GM bailout.

The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout. At the current price, the Treasury would lose more than $16 billion on its GM bailout.

Jim Geraghty says that victory laps over the continued existence of GM and Chrysler are a little ridiculous:

[T]he President speaks as if the (somewhat) improved financial health of GM* is some sort of public policy miracle.

Is there any way you could provide $85 billion to an industry and it wouldn’t be in better financial shape?

* Other than the management shake-up.

There are a couple of problems with taking high-fives at this point, not the least of which is the massive loss taxpayers will take when the government finally unloads the stock.  Obama says that both companies would have gone under without the bailout (started by George W. Bush, with the arm-twisting bankruptcy run by the Obama administration), but a greatly-reduced Chrysler ended up being sold off to Fiat anyway.  Ford, meanwhile, didn’t take the bailout — and managed to do just fine.  The only thing accomplished by the Obama administration was the protection of UAW contracts and the shift of liabilities tied to pensions and benefits from GM to taxpayers.  Those kinds of liabilities could have been addressed in a normal bankruptcy without government intervention — but it would have turned out much worse for Obama’s allies in Big Labor.

If Obama wants to run for a second term on the basis of doing this for other industries, I can’t think of a better argument to vote against him.


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When you’re spending other people’s money…

… it isn’t a problem.

Seven Percent Solution on August 14, 2012 at 5:23 PM

…no!…what?…wait!…he saved them!

KOOLAID2 on August 14, 2012 at 5:24 PM

OT: Anyone see Beckel curse on “The Five” right now?

GOPRanknFile on August 14, 2012 at 5:24 PM

To be fair, “only costing taxpayers $25 billion” is kind of a win for Obama these past 4 years. Everything else is a loser well into the hundreds of billions of dollars.

lorien1973 on August 14, 2012 at 5:24 PM

But for that “investment, we all have the opportunity to go buy an over-priced, unreliable Chevy Volt.
Isn’t that a win for us taxpayers? /

dentarthurdent on August 14, 2012 at 5:25 PM

As a lady, I guess I shouldn’t say what I did with my middle finger on my face when I saw the picure of bho and all he has/wants to do to our nation?
L

letget on August 14, 2012 at 5:25 PM

Wait till GM’s sales and the share price decline more. The loss to taxpayers will be a lot more than 25 billions. And

http://news.yahoo.com/gm-recalls-10-315-vans-cold-weather-areas-114647345–finance.html

http://www.foxnews.com/leisure/2012/08/13/gm-recalls-over-38000-police-impalas-in-north-america/

Two days, two recalls by GM.

SloJoe: “Bin Laden is dead, and GM is hospitalized.”

bayview on August 14, 2012 at 5:27 PM

Too bad he won’t reveal his college transcripts. Would love to see his grade for Economics 101.

VastRightWingConspirator on August 14, 2012 at 5:27 PM

So the bailout stands at $25 billion and the only reason GM has decent sales is because the federal government is buying trainloads of cars with MORE taxpayer money.

Still, Ryan doesn’t know jack about the economy.

Bishop on August 14, 2012 at 5:27 PM

GM should have been allowed to go bankrupt, and get out from under the chains of the union, and been set free to produce good decent cars that people, not these outrageous tax subsidized expensive jokes like the Chevy Volt that couldn’t make it from SF to Santa Cruz on a single charge, unless you drove Highway 17.

anotherJoe on August 14, 2012 at 5:28 PM

Barack Obama has turned up the heat on Mitt Romney recently on the auto bailout.

What’s the problem?

That Romney doesn’t like wasting money buying votes to the tune of $25 billion?

Chip on August 14, 2012 at 5:29 PM

Again, this figure doesn’t count the big pretty present the IRS gave Government Motors, -the ability to count pre-bankruptcy losses against future profits for the next ten years. This year alone that cost us any corporate taxes from GM’s 2010 profit.

In addition, there’s the losses from GM’s financing arm: Why The Auto Bailout Is Far Costlier Than Treasury Claims

Lastly, has anyone calculated the loss of revenue from income taxes from all the workers at the white Republican dealerships that were closed?

slickwillie2001 on August 14, 2012 at 5:29 PM

“…and now the American auto industry has come roaring back. Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.”

God help us.

de rigueur on August 14, 2012 at 5:28 PM

Good thing we’re not running out of money….. /sarc.

Chip on August 14, 2012 at 5:31 PM

God help us.

de rigueur on August 14, 2012 at 5:28 PM

Hold on now, Bark has done wonders for the firearms industry.

Bishop on August 14, 2012 at 5:31 PM

Ed:

I am guessing this got buried underneath the mountains of chains and slag that the Dems have piled on Ryan, but Stewart Varney on FBN brought up YET ANOTHER “You did no build it” socialistic spasm that The Pantload uttered over the weekend to the half-full room of $51-a-plate mooncalves:

“Do we go forward towards a new vision of an America in which prosperity is shared?” Obama asked. “Or do we go backward to the same policies that got us in the mess in the first place?”

The War Planner on August 14, 2012 at 5:31 PM

Obama looks like the Clown in Chief.

Schadenfreude on August 14, 2012 at 5:32 PM

$25 Billion,oh I do wonder,how much Loot was raided by the Unions!!

canopfor on August 14, 2012 at 5:33 PM

GOPRanknFile on August 14, 2012 at 5:24 PM

Sure did.
In response to a little arm punch to get him to listen.

pambi on August 14, 2012 at 5:33 PM

Pimp of Clunkers

Schadenfreude on August 14, 2012 at 5:33 PM

So they gave the union and GM a huge stack of money, subverted contract law, relieved GM from paying taxes, ripped off creditors and salaried employees, bought cars to artificially boost numbers, and they are bragging about it?

Under all of that corruption, the failing business model remains unchanged. GM will be bankrupt again within 5-6 years.

forest on August 14, 2012 at 5:36 PM

And to think,FU BO The Clown wants four more years of,
Fundamentally Transformationaly more Changes of the
US of A!!

canopfor on August 14, 2012 at 5:36 PM

[T]he President speaks as if the (somewhat) improved financial health of GM* is some sort of public policy miracle.

Is there any way you could provide $85 billion to an industry and it wouldn’t be in better financial shape?

kind of goes without saying…..

ted c on August 14, 2012 at 5:37 PM

“25 Billion? Pocket change sonny-jim. Pocket change.”

-Swindler Barry

portlandon on August 14, 2012 at 5:37 PM

Sure did.
In response to a little arm punch to get him to listen.

pambi on August 14, 2012 at 5:33 PM

Haha…yup. It’s hard for me to dislike the guy. I hope he doesn’t get in too much trouble.

GOPRanknFile on August 14, 2012 at 5:39 PM

…T R O L L S…???

KOOLAID2 on August 14, 2012 at 5:40 PM

So,another four years of Hopey,guarantees
no jobs,and deeper’er into debt,more bail-
outs!!!

Its a Winning Failure Formula!!

canopfor on August 14, 2012 at 5:40 PM

Hey, it could have been worse. Geithner could have bailed out the pensions of those 20k non-union Delphi employees too.

antipc on August 14, 2012 at 5:40 PM

Never miss a chance to call the Liar-in-Chief out on the lie that he saved the auto industry! He saved the UAW and created unfair advantage to his corrupt cronies with tax payers money. In spit of the fact America’s auto industry is doing fine!
http://www.lex18.com/news/toyota-camry-sales-up-40-in-first-seven-months-of-2012/

Marco on August 14, 2012 at 5:41 PM

In addition to pointing out Ford took no bailout I would start pointing out also several Japanese, German, and Korean companies have factories here and required no bailouts either. Of course it helps they have little or no unions other than Ford.

gsherin on August 14, 2012 at 5:41 PM

The value of that Government Motors stock is being propped up because the government has a huge piece of it. The stock market has correctly concluded that that means favorable treatment by federal regulators, which we saw in the Chevy Volt fires being downplayed, vs the way the bogus sudden acceleration ‘problem’ at Toyota was turned into a circus with the CEO testifying at a Congressional Preening.

The government owns so much Government Motors stock that it is illiquid to a significant extent.

slickwillie2001 on August 14, 2012 at 5:42 PM

Forget his college transcripts, I’d like to see proof that he can balance a check book.

flataffect on August 14, 2012 at 5:42 PM

…T R O L L S…???

KOOLAID2 on August 14, 2012 at 5:40 PM

KOOLAID2:

Maybe the rats,er,trolls are fleeing the Hopey/Changey Titanic,after
they ripped open the ships side,from the R/R Iceberg!:)

canopfor on August 14, 2012 at 5:43 PM

Under all of that corruption, the failing business model remains unchanged. GM will be bankrupt again within 5-6 years.

forest on August 14, 2012 at 5:36 PM

Less than five years if Romney wins and GM keeps up that stupid 60 day buy back program.

Johnnyreb on August 14, 2012 at 5:44 PM

“Do we go forward towards a new vision of an America in which prosperity is shared?” Obama asked.
The War Planner on August 14, 2012 at 5:31 PM

The cats out of the bag that O wants to redistribute. But this is really a diversion ploy by O. A vision in which “prosperity is shared.” He wants us to get all enraged about the “shared” bit, but unwittingly accept a future of prosperity. There’s no prosperity to share under O’s future. That is made clear by Ryan’s 3 video series “The Path to Prosperity.” See and share the key and outstanding part of the series, this 4 minute video on Medicare: http://www.youtube.com/watch?v=DJIC7kEq6kw&info=RyanMedicare

anotherJoe on August 14, 2012 at 5:44 PM

Wait till GM’s sales and the share price decline more. The loss to taxpayers will be a lot more than 25 billions.

[bayview on August 14, 2012 at 5:27 PM]

No need to wait. The reported $25B is based on the share price ending in May. Based on the share price now, the loss is up almost another billion.

Read this post, which I linked in the Headlines thread on this subject.

SCOAMFA(t)M(ath) is going to get tutored on this if he keep touting his saved GM credential.

Dusty on August 14, 2012 at 5:45 PM

“for my next trick watch me pull a QE3 based bailout of EUtopia!”

//Ogabe the Perplexingly Spendhappy!

harlekwin15 on August 14, 2012 at 5:45 PM

The cats out of the bag that O wants to redistribute. But this is really a diversion ploy by O. A vision in which “prosperity is shared.” He wants us to get all enraged about the “shared” bit, but unwittingly accept a future of prosperity. There’s no prosperity to share under O’s future. That is made clear by Ryan’s 3 video series “The Path to Prosperity.” See and share the key and outstanding part of the series, this 4 minute video on Medicare: http://www.youtube.com/watch?v=DJIC7kEq6kw&info=RyanMedicare

anotherJoe on August 14, 2012 at 5:44 PM

Between EPA and his plans for the suburbs Obama is planning on blocking us from access to the things needed to make America work…

harlekwin15 on August 14, 2012 at 5:46 PM

It’s a shame what unions have devolved into.

They have become parasitic organisms which often kill their hosts. Just ask any of the numerous stockholders, bondholders and employee pension holders who’ve had their assets wiped out in bankruptcies brought on by ridiculous union contracts.

Until such time as unions become symbiotic instead of parasitic, I will “look for the union label” and buy somebody else’s product or service.

Damn shame too. I really like the new Chevy Camaros.

MessesWithTexas on August 14, 2012 at 5:47 PM

The report may still underestimate the losses.

Nah! Barry and Company wouldn’t do that! They’re all about “transparency” and “honest, open government”. They said so!

GarandFan on August 14, 2012 at 5:48 PM

Maybe someone ought to tell this moron who has been president the last four years!
“Do we go forward towards a new vision of an America in which prosperity is shared?” Obama asked. “Or do we go backward to the same policies that got us in the mess in the first place?”

The War Planner on August 14, 2012 at 5:31 PM

Can this fool actually make America forget that he has has been president the last four years?!!

Marco on August 14, 2012 at 5:49 PM

…T R O L L S…???

KOOLAID2 on August 14, 2012 at 5:40 PM

Gumby is racing through Huffington Post right now to discover his rebuttle.

Deano1952 on August 14, 2012 at 5:49 PM

Should have said Daily Kos! Sorry.

Deano1952 on August 14, 2012 at 5:50 PM

It’s bad enough that GM is costing us billions, but to add insult to injury they repeatedly ran one of the most annoying commercials ever during the Olympics — the one with a bunch of aging yuppies singing along to that god-awful Spandau Ballet “True” song while trying to peddle that stupid Volt as a good idea. Gag inducing.

natasha333 on August 14, 2012 at 5:51 PM

The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.

Here’s some interesting math: On old GMs best day in the stock market, evah, it was worth ~$53B, meaning if you had $53B laying around, you could have bought every share of stock and owned the entire company.

That was its best day, not its last day.

So how do you lose $25B on an $85B investment into 1/3 of a company that at its peak was only worth $53B and call that a win?

BobMbx on August 14, 2012 at 5:51 PM

You mean the auto bailout that your Paul Ryan voted for?

You lack a spine, Ed. Hear you are attacking the very thing that you turn your head for because someone has an “R” after his name, and then you have the audacity to attack a true fiscal conservative and a follower of the Austrian school.

Dante on August 14, 2012 at 5:51 PM

Barack Obama is an innumerate socialist.

Basilsbest on August 14, 2012 at 5:52 PM

How “low information” does a voter have to be not to notice what a colossal screw up Obama is? Maybe you could miss one or two of his bombs, but all of them?

natasha333 on August 14, 2012 at 5:53 PM

GM was a gift to the Unions. Nothing more.

UnderstandingisPower on August 14, 2012 at 5:53 PM

This would be after the government sells its stock in Government Motors at the currently hoped for far lower than originally planned price per share.

At the moment the taxpayers are in the hole for considerably more than that.

The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout. At the current price, the Treasury would lose more than $16 billion on its GM bailout.

I haven’t looked this week but last week GM was selling for under $20 a share.

And that would go down considerably if all of a sudden 500 million shares went on the market.

farsighted on August 14, 2012 at 5:54 PM

Yes because if GM and Chrysler went under there would have been no cars to buy. Ford, Toyota or maybe a want to be upstart would have just been content to ignore the void. Liberals love some disingenuous BS.

lowandslow on August 14, 2012 at 5:54 PM

So how do you lose $25B on an $85B investment into 1/3 of a company that at its peak was only worth $53B and call that a win?

BobMbx on August 14, 2012 at 5:51 PM

Easy peasy — if you’re a liberal and you’ve got the media carrying your water for you.

natasha333 on August 14, 2012 at 5:54 PM

Is there any way you could provide $85 billion to an industry and it wouldn’t be in better financial shape?

Even the term “better financial shape” is wrong.

Sure, giving any business $85 billion will, by definition, improve its balance sheet.

But when you have a NEGATIVE THIRTY PERCENT return on investment, that’s very very bad. And the fact that the investment is incredibly gigantic doesn’t make the “financial shape” of the investment better; it makes it very much worse.

logis on August 14, 2012 at 5:55 PM

So how do you lose $25B on an $85B investment into 1/3 of a company that at its peak was only worth $53B and call that a win?

BobMbx on August 14, 2012 at 5:51 PM

There is a smoke and mirrors shell game of some kind going on with the accounting.

The numbers do not add up.

farsighted on August 14, 2012 at 5:56 PM

Is there any way you could provide $85 billion to an industry and it wouldn’t be in better financial shape?

Can you say “Green Energy”?

BobMbx on August 14, 2012 at 5:57 PM

Let’s see. What party whines about so-called corporate welfare? Hmmm, have to think about that a minute.

mikewor on August 14, 2012 at 5:58 PM

The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout. At the current price, the Treasury would lose more than $16 billion on its GM bailout.

I haven’t looked this week but last week GM was selling for under $20 a share.

And that would go down considerably if all of a sudden 500 million shares went on the market.

farsighted on August 14, 2012 at 5:54 PM

That just shows how little you know about Socialism.

All the government has to do is pass a law Mandating that people buy the shares at whatever price the government wants to be paid — or else they’ll be put in prison for “tax evasion.”

The Supreme Court ruled, dude, it’s all Constitutional as Hell now.

logis on August 14, 2012 at 6:00 PM

You didn’t waste that taxpayer money. Somebody else made that happen!

albill on August 14, 2012 at 6:02 PM

The Supreme Court ruled, dude, it’s all Constitutional as Hell now.

logis on August 14, 2012 at 6:00 PM

That’s not how it works.

Dante on August 14, 2012 at 6:02 PM

OT: Anyone see Beckel curse on “The Five” right now?

GOPRanknFile on August 14, 2012 at 5:24 PM

Heh, proceeds of Beckel’s Tip Jar go to the Romney Campaign.

+1

petefrt on August 14, 2012 at 6:02 PM

All the government has to do is pass a law Mandating that people buy the shares at whatever price the government wants to be paid — or else they’ll be put in prison for “tax evasion.”

The Supreme Court ruled, dude, it’s all Constitutional as Hell now.

logis on August 14, 2012 at 6:00 PM

This.

Not buying stock in GM is a ready-made Commerce Clause case.

500M shares divided by 300M citizens = 1 2/3 shares per citizen. At $20 bucks per share, thats $32 per citizen.

Which will be deducted from your federal tax refund or added to your tax bill for 2012, with no service charge by the IRS.

BobMbx on August 14, 2012 at 6:05 PM

From Tom Woods’ facebook page:

Reagan budget director David Stockman isn’t always right, but he’s smart and honest. Here he is on Paul Ryan: “Mr. Ryan showed his conservative mettle in 2008 when he folded like a lawn chair on the auto bailout and the Wall Street bailout. But the greater hypocrisy is his phony ‘plan’ to solve the entitlements mess by deferring changes to social insurance by at least a decade….

“In short, Mr. Ryan’s plan is devoid of credible math or hard policy choices. And it couldn’t pass even if Republicans were to take the presidency and both houses of Congress. Mr. Romney and Mr. Ryan have no plan to take on Wall Street, the Fed, the military-industrial complex, social insurance or the nation’s fiscal calamity and no plan to revive capitalist prosperity — just empty sermons.”

Dante on August 14, 2012 at 6:06 PM

Sure, giving any business $85 billion will, by definition, improve its balance sheet.

logis on August 14, 2012 at 5:55 PM

A couple of weeks ago I did a rough calculation that indicated $85 billion covers GM’s payroll for about three years.

Imagine what great shape every business could be in if taxpayers covered their payroll for the next three years.

farsighted on August 14, 2012 at 6:08 PM

Dante on August 14, 2012 at 6:06 PM

Dude… theirs Ron Paul jizz on your chin…

SWalker on August 14, 2012 at 6:14 PM

“In short, Mr. Ryan’s plan is devoid of credible math or hard policy choices. And it couldn’t pass even if Republicans were to take the presidency and both houses of Congress. Mr. Romney and Mr. Ryan have no plan to take on Wall Street, the Fed, the military-industrial complex, social insurance or the nation’s fiscal calamity and no plan to revive capitalist prosperity — just empty sermons.” Dante on August 14, 2012 at 6:06 PM

Those issues are hard enough to address now. How does electing Obama make it easier to address them? And they do have a plan. It’s just not good enough for you. Their first job is to get elected.

Basilsbest on August 14, 2012 at 6:26 PM

Not buying stock in GM is a ready-made Commerce Clause case.

500M shares divided by 300M citizens = 1 2/3 shares per citizen. At $20 bucks per share, thats $32 per citizen.

Which will be deducted from your federal tax refund or added to your tax bill for 2012, with no service charge by the IRS.

BobMbx on August 14, 2012 at 6:05 PM

Hey, how about next year we give IRS income tax refunds in GM stock instead of a check? What a great idea…

slickwillie2001 on August 14, 2012 at 6:29 PM

Hey, how about next year we give IRS income tax refunds in GM stock instead of a check? What a great idea…

slickwillie2001 on August 14, 2012 at 6:29 PM

Here’s another idea.

Let’s start paying government union employees in GM stock. They should love that.

farsighted on August 14, 2012 at 6:32 PM

Those issues are hard enough to address now. How does electing Obama make it easier to address them? And they do have a plan. It’s just not good enough for you. Their first job is to get elected.

Basilsbest on August 14, 2012 at 6:26 PM

Who said anything about electing Obama? Check your premises.

Dante on August 14, 2012 at 6:32 PM

Not buying stock in GM is a ready-made Commerce Clause case. 500M shares divided by 300M citizens = 1 2/3 shares per citizen. At $20 bucks per share, thats $32 per citizen. Which will be deducted from your federal tax refund or added to your tax bill for 2012, with no service charge by the IRS.
BobMbx on August 14, 2012 at 6:05 PM

Jeezze. It’s like I’m talking to a wall here!

$20 is the MARKET PRICE for the shares. Any evil and greedy capitalist pigdog could get that. If that’s all you want, you wouldn’t NEED your kind, benevolent and infinitely generous Fearless Leader to run the economy, now would we?

The only point of mandates is to get MORE than the market price; to make sure a FAIR price is paid. And (because, apparently, I need to explain this on the most basic level possible) of course that’s not the price YOU think is fair. It’s the price the government needs to make sure that it always has enough money to cover all its losses, and still have plenty left over for future benevolent and generous “corporate rescues.”

In this case that means at least three times the “evil greedy capitalist pigdog” market value. Plus just a little bit more to cover the extra costs that those evil greedy capitalist pigdogs refuse to pay, like the Mandated Global Warming Offsets, Undocumented Alien Worker Benefits, Government Equal Opportunity Management Fees, etc., etc., etc….

So let’s call it an even $120 a share. Unless of course you’re late on paying; in which case interest, fees and penalties will be compounded daily. And heaven forbid you should COMPLAIN about any of that. Because the government has plenty of, um, “stock purchase advisers,” who’d be happy to lock you in a little room until you see what a great deal you’re missing out on.

logis on August 14, 2012 at 6:38 PM

If Obama wants to run for a second term on the basis of doing this for other industries, I can’t think of a better argument to vote against him.

I’ve read some compelling definitions of this being an overt call for fascism. Is it not fascism when the government nationalizes every industry?

Serious question.

Then the Emperor comes up with this redistribution of prosperity offer. Yikes.

dogsoldier on August 14, 2012 at 6:49 PM

Ummmm…ahhhhh…ummmm…Nope. I got nothin.

timberline on August 14, 2012 at 7:21 PM

Dante on August 14, 2012 at 6:06 PM

Dude, don’t quote that bum Stockman who took a pretty good auto supplier, Collins & Aikman and ran them into bankruptcy. He’s a piece of dog doo-doo.

8 weight on August 14, 2012 at 7:28 PM

but to add insult to injury they repeatedly ran one of the most annoying commercials ever during the Olympics

GM had to be the biggest Olympics advertiser. Now just why would a company pay super big bucks to advertise to its stockholders?

katablog.com on August 14, 2012 at 7:31 PM

They’re going to lose a lot more than $5 billion on GMAC/Ally/Treasury Bank, and that’s assuming they give up their nearly-3/4 ownership stake. $25 billion overall is a lowball figure.

I haven’t run the loss-to-date on Ally lately, but add that to the loss-to-date on Government Motors and the final loss on Chrysler/UAW Motors/Fiat, and we’re talking somewhere north of $35 billion.

Steve Eggleston on August 14, 2012 at 7:33 PM

$25 Billion,oh I do wonder,how much Loot was raided by the Unions!!

canopfor on August 14, 2012 at 5:33 PM

Back-of-the-head calculation – assuming Chrysler is able to make all their loan payments, the UAW gets the full $4.something billion it can get from its ownership stake in Chrysler, the UAW gets something around $21/share for its ownership stake in Government Motors, and Government Motors extinguishes the preferred stock the UAW has at the end of 2014 (the earliest possible date), they’ll get somewhere north of $45 billion on $30 billion in pre-bankruptcy liabilities GM and Chrysler owed them.

Steve Eggleston on August 14, 2012 at 7:39 PM

If I had a business and had to downsize, I would walk out to the parking lot and every bumper with an obama tag would get the pink slip.

Any business man or someone who works in/for a business (and isn’t that everyone?) had better make sure they don’t vote for this socialist/communist in office.

Oh, yah, the unions and the government workers. Well, if there is no money, they won ‘t get theirs either.

My Dad was head of a union, I wish he was alive I would like to have a talk with him about what unions have become. I don’t think (I should say I know) he wouldn’t approve of the criminal tactics they use (seiu anyone).

Bambi on August 14, 2012 at 7:58 PM

To be fair, “only costing taxpayers $25 billion” is kind of a win for Obama these past 4 years. Everything else is a loser well into the hundreds of billions of dollars.

lorien1973 on August 14, 2012 at 5:24 PM

Give him time. All the analysts who’ve written about the GM bailout say that the $25 billion dollar loss estimate is a best-case scenario. It assumes that GM’s pension investments will return 8% annually, and that its stock price will rise significantly before the gov’t unloads its shares — both highly questionable assumptions. Also, the $25 billion number doesn’t include tens of billions of dollars in tax breaks that the government gave to GM going forward.

So Barry’s great “success” at GM may eventually become a $100 billion dollar loss to taxpayers before all is said and done.

AZCoyote on August 14, 2012 at 8:21 PM

Obama says that both companies would have gone under without the bailout (started by George W. Bush, with the arm-twisting bankruptcy run by the Obama administration)… but a greatly-reduced Chrysler ended up being sold off to Fiat anyway.

Wildly inaccurate. Not just Obama, but Bush and every analyst on Wall Street stated that the industry would collapse without the bailout. Bankruptcy court cannot prevent a company without adequate liquidity to fund its operations from collapsing.
Furthermore, Fiat’s hugely risky investment in Chrysler was completely dependent upon support from the US and Canadian governments. Without it Chrysler would have failed.

* Other than the management shake-up.

Hilarious. Yes, in the new GM, incompetent heads of European operations and marketing get fired immediately. The days of tolerating ineptitude are over.

Yes because if GM and Chrysler went under there would have been no cars to buy. Ford, Toyota or maybe a want to be upstart would have just been content to ignore the void. Liberals love some disingenuous BS.

Are you actually that dim? Ford executives testified in Congress that if GM and Chrysler failed, Ford wold also collapse when its base of suppliers went bankrupt. Or are you accusing Ford’s CEO of lying?
But it’s great to see you cheer on the Japanese and Germans, I’m sure you’d make a great and willing vassal to a foreign overlord.

Maybe one of the savvy financial analysts here can evaluate the $160 billion in annual net revenue collected by GM alone and explain how the aggregate income tax liabilities of employees, excise taxes, and other taxes collected don’t make the $25 billion anything less than an exceptional investment.

bayam on August 14, 2012 at 8:25 PM

Ford, Toyota or maybe a want to be upstart would have just been content to ignore the void

What upstart are you referring to? It would be great to see businessmen in right to work states, the south, start a new auto company. But it’s free enterprise- a topic that conservatives love to champion in talk but not so much in action.
For now the only sign of hope comes from Elon Musk’s Tesla Motors in California.

As for all the whining about terrible union contracts, it’s not your daddy’s oldsmobile.

http://content.usatoday.com/communities/driveon/post/2010/05/gm-ford-chrysler-finally-reaching-wage-parity-with-toyota/1#.UCruaU2PUfU

bayam on August 14, 2012 at 8:40 PM

With Government Motors closing down 29¢ a share today, we taxpayers just lost another $1.3 billion.

See http://www.examiner.com/article/cmo-firing-was-just-the-beginning-of-gm-s-problems

bgoldman on August 14, 2012 at 9:34 PM

Ed, I know the accuracy of wiki, but if you look at the 2012 United States federal budget, then ponder the $26 BILLION given to the UAW, it puts things into perspective, even if the numbers are a little rounded.

I’m not defending the federal government or this stupid bailout, just providing some contrast to what they received.

Using 2012 numbers, roughly more than:

National Aeronautics and Space Administration $17.7 billion
Department of the Interior $12.4 billion
Department of Commerce $11.3 billion
Army Corps of Engineers Civil Works $9.3 billion
Environmental Protection Agency $9.5 billion
National Science Foundation $8.0 billion
Small Business Administration $1.8 billion
Corporation for National and Community Service $1.1 billion

The UAW received in it’s bail-out roughly MORE THAN 4 federal agencies combined.

More than NASA that puts friggin rovers on Mars, yet the Volt has to be subsidized?

Over twice the amount of Interior yet we cannot field planes to put out wild fires? Or staff National Parks?

More than twice Commerce which includes the National Weather Service who tracks the storms that destroy places like Joplin?

No matter who voted for the bailout or who signed it, Choombama’s administration has been in charge of overseeing what has happened since the bailout.

GM stock prices are now at $20.21 per share. I believe their IPO was at around $33.00 per share.

How is that administration oversight of that private company take-over working out?

…meanwhile 20,000 Delphi employees lost everything or mostly everything they worked for, and taxpayers continue to lose as well.

91Veteran on August 15, 2012 at 2:35 AM

Maybe one of the savvy financial analysts here can evaluate the $160 billion in annual net revenue collected by GM alone and explain how the aggregate income tax liabilities of employees, excise taxes, and other taxes collected don’t make the $25 billion anything less than an exceptional investment.

bayam on August 14, 2012 at 8:25 PM

This has to be among one of the stupidest things you’ve ever said, and that’s saying something.

You truly are a Marxist. There is no gov’t spending that you don’t support. And you believe that gov’t run industry is somehow a good thing – that it “all comes back in the taxes collected from the workers, etc.”

So much stupid – yet you think yourself intelligent. Too funny.

You’re right. It’s a great investment. We should keep pumping 25 billion every couple of years. that way, we’ll see the great gov’t growth and tax revenue we have seen over the last 3 years.

If the gov’t pumps money into a failing institution – its bound to be successful and give us a huge return. Particularly if the whole point is to save union contracts and jobs.

Good lord, it is true that lefties are entirely ignorant of both history and economics.

Monkeytoe on August 15, 2012 at 7:55 AM

BO: “Our plan worked!”

Dandapani on August 15, 2012 at 8:00 AM