Taxpayer losses on GM bailout higher than first reported

posted at 6:01 pm on May 2, 2014 by Bruce McQuain

Not that anyone should be particularly surprised that the loss was bigger than first reported.  There seems to be a pattern to that.  Report bad news on a Friday afternoon news dump and then, months later, quietly amend the bad news to worse news.

In this case the news is that taxpayers got scalped for more than the government first claimed with GM:

The U.S. government posted a deeper loss than initially recorded on the General Motors bailout, according to a government report released today.

Taxpayers lost $11.2 billion on the GM bailout, up from $10.3 billion the Treasury Department estimated when it sold its last GM shares on Dec. 9.

A Treasury Department auditor said the government had written off an $826-million “administrative claim” tied to the GM bailout on March 20.

Goodness knows what the “administrative claim” consists of, but it was worth just south of a billion dollars.  And if I had to bet, I’d probably bet this isn’t the last write-off.

Of course one can legitimately wonder what GM learned from its bankruptcy, or perhaps it it is better to describe the process they went through as similar to bankruptcy only not bankruptcy, thanks to the taxpayer’s largess.  In fact none of the hard lessons that make companies that successfully emerge from bankruptcy do well afterward were learned.  And the administration had a vested interest is ensuring GM didn’t have to go through the real process of bankruptcy because that would have required that all current contracts be voided.  Their interest rested in a very powerful and influential interest group — unions.  And they went to extraordinary lengths to ensure the unions involved actually came out ahead.

So when the administration says…

“The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful,” Treasury spokesman Adam Hodge said.

…what they really mean is we did this to “help save union jobs and thereby the power and influence of a strictly Democrat interest group.”

This is an administration that has been pretty blatant about its focus on partisan politics and it’s willingness to use the power of government to help its side.

This was no different.  And, as usual, they were fine with using other people’s money to help their cause.

~McQ


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added bonus, we aided the cover up that destroyed peoples lives!

rob verdi on May 2, 2014 at 6:03 PM

These losses were caused by a YouTube video.

faraway on May 2, 2014 at 6:03 PM

See the USA in your Chevrolet.

And loose your shirt unless you’re an exec or in a union at GM.

These losses were caused by a YouTube video.

faraway on May 2, 2014 at 6:03 PM

My fave today.

Chuck Ef on May 2, 2014 at 6:08 PM

To which Jay Carney responds, “‘we don’t have hard numbers, but we dispute their numbers!”

Scottie on May 2, 2014 at 6:10 PM

“The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful,” Treasury spokesman Adam Hodge said.

I seem to recall that the bailout was considered an “investment” in America. Aren’t investments supposed to make a profit? Why’d they sell at a loss?

Happy Nomad on May 2, 2014 at 6:11 PM

Anybody shocked by this needs to be kicked out of the gene pool right now.

M240H on May 2, 2014 at 6:11 PM

Give it a break, this comes as a surprise to who?

oscarwilde on May 2, 2014 at 6:13 PM

Worse, Government Motors gets to write off any profits against the losses of ‘old General Motors’, a super-special extralegal bonus granted to GM and the greedy UAW. This has a value of around $16B which is in addition to the $11.2B.

slickwillie2001 on May 2, 2014 at 6:19 PM

Give it a break, this comes as a surprise to who?

oscarwilde

No one … unless you’re a Democrat, then you’re SHOCKED, SHOCKED to learn about this ….

and certain the losses were somehow caused by Bush.

BD57 on May 2, 2014 at 6:20 PM

Quietly amending bad news to worse news.

Worse to worser.

davidk on May 2, 2014 at 6:24 PM

Getting votes the Chicago way.

Madigan ally seeks to derail term limit, remap amendments
Private meeting with minority groups preceded lawsuit

http://www.chicagotribune.com/news/politics/clout/chi-lawsuit-by-madigan-ally-aims-to-head-off-constitutional-amendment-ballot-questions-20140430,0,4388409.story

makaput on May 2, 2014 at 6:25 PM

They lied???

Just buy their crap. who needs electric cars that explode or the little fecal cars that die while your driving at most inopportune times. stop buying and even the kenyan can’t keep them alive.

However, I’m sure he’ll report they sold 8 million but are’nt sure how many were paid for.

acyl72 on May 2, 2014 at 6:26 PM

Is there a reason that every time government figures need to be adjusted that it’s always a negative move and not a positive? I mean, always.

HiJack on May 2, 2014 at 6:26 PM

“Taxpayer loses” is the Obama regime refrain.

Murphy9 on May 2, 2014 at 6:30 PM

I wish people would finally realize everything coming out of this Administration is a lie, including the words, ‘and,’ and ‘the.’

Thomas More on May 2, 2014 at 6:39 PM

If the Dems and Obama would deny children a good education because of unions, what’s to keep them from screwing bond holders and tax payers out of a little money.

hepcat on May 2, 2014 at 6:39 PM

‘General Motors: Now with 11% more FAIL!’

YAY!!

a5minmajor on May 2, 2014 at 6:43 PM

Not even close, Bruce. I hope you are reading comments tonight.

What about the losses of billions in stock value when the mobster Obama administration pissed on 200 years of bankruptcy law and wiped out those investors? Those “rich” investors were millions of middle class workers whose 401Ks were invested in GM stock.

No?

Jaibones on May 2, 2014 at 6:44 PM

“At this point, what difference does it make??”

KMC1 on May 2, 2014 at 6:46 PM

At least they were able to use that additional funding to produce a safe, quality product, that should count for something.

“Hey…my car just stopped in the middle of the freew”

Bishop on May 2, 2014 at 6:47 PM

Not even close.

They’re not counting $10 billion in loss carry-forwards from the bankruptcy.

In a traditional bankruptcy loss carry-forwards are wiped out. In this hybrid Obankruptcy GM was allowed to keep the loss carry-forwards so they were able to avoid paying $10 billion in taxes they they would have owed in a traditional bankruptcy.

mbecker908 on May 2, 2014 at 6:57 PM

A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly.

But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself. For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men.

He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.

A murderer is less to fear. The traitor is the plague. –Cicero

opunmind on May 2, 2014 at 7:14 PM

Embrace even more suck.

Philly on May 2, 2014 at 7:17 PM

Unexpectedly.

And in the process the Affirmative Action Presicent demonstrated that not only was he let slide in Constitutional Law but also Corporations, Business Associations, Tax Law and Bankruptcy Law.

talkingpoints on May 2, 2014 at 7:30 PM

Not even close, Bruce. I hope you are reading comments tonight.

What about the losses of billions in stock value when the mobster Obama administration pissed on 200 years of bankruptcy law and wiped out those investors? Those “rich” investors were millions of middle class workers whose 401Ks were invested in GM stock.

No?

Jaibones on May 2, 2014 at 6:44 PM

Don’t forget GM (and Xler) dealers that were totally f’d over by Barry, and we STILL don’t know what criteria were used to determine which dealers to shut down, and lay off all of their employees. In most cities there are STILL car dealership buildings sitting vacant.

slickwillie2001 on May 2, 2014 at 7:38 PM

Unexpected…

jaywemm on May 2, 2014 at 7:53 PM

Goodness knows what the “administrative claim” consists of, but it was worth just south of a billion dollars. And if I had to bet, I’d probably bet this isn’t the last write-off.

That would be the claim the Treasury Department had on Motors Liquidation Company, which was created to handle the liquidation of the assets Government Motors didn’t take with them out of bankruptcy government seizure.

If memory serves, that is the final bankruptcy-related claim the Treasury has on GM, and should officially close the books on the automotive portion of the auto bailout. However, as other commenters pointed out, there’s the $10 billion (or so) otherwise-illegal carry-forward of losses from pre-bankruptcy GM that will have GM effecitvely paying no income tax through roughly 2017.

Steve Eggleston on May 2, 2014 at 8:04 PM

What about the losses of billions in stock value when the mobster Obama administration pissed on 200 years of bankruptcy law and wiped out those investors? Those “rich” investors were millions of middle class workers whose 401Ks were invested in GM stock.

No?

Jaibones on May 2, 2014 at 6:44 PM

Er, the stock of a bankrupt company is usually wiped out. What you’re looking for is the special treatment given UAW.

In GM’s case, that was special treatment versus other unsecured creditors, which culminated in a controlling interest in the new company after the Treasury divested its controlling interest last year and what will turn into a nearly-$10 billion profit on its $20 billion unsecured retiree health benefit (VEBA) claim.

In Chrysler’s case, it was a conversion of its unsecured VEBA claim to what was originally a controlling interest (since sold off to Fiat) and a conversion of the remainder to a secured liability with a signficant chance to profit, when secured creditors were forced to take a haircut and unsecured creditors took a 100% loss.

Steve Eggleston on May 2, 2014 at 8:13 PM

“The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful,” Treasury spokesman Adam Hodge said.

I seem to recall that the bailout was considered an “investment” in America. Aren’t investments supposed to make a profit? Why’d they sell at a loss?

Happy Nomad on May 2, 2014 at 6:11 PM

Hey, the UAW profited from their joint government/union seizure of GM and Chrysler, and the Rats profited from increased donations from the UAW.

Steve Eggleston on May 2, 2014 at 8:30 PM

At least they were able to use that additional funding to produce a safe, quality product, that should count for something.

“Hey…my car just stopped in the middle of the freew”

Bishop on May 2, 2014 at 6:47 PM

“But I’m not worried – my other car is safely charging in my…what? My garage is on fire?”

Steve Eggleston on May 2, 2014 at 8:31 PM

…and just wait to see what a good “investment” GM was…when the suing begins… on the deaths and recalls for cars they knew they had problems with!

KOOLAID2 on May 2, 2014 at 8:36 PM

Can the Treasury claim that as a capital loss? How long would it take before they didn’t have any excess carryover on $40B?

I thought I was a terrible investor. I don’t feel so bad now.

BobMbx on May 2, 2014 at 8:36 PM

There is still the GMAC/Ally Bank issue, which at last check was about $17 billion in the red (or most of what the Treasury put into it).

Steve Eggleston on May 2, 2014 at 9:13 PM

So, these numbers were yet another lie from the Regime.

They are incapable of being truthful about ANYTHING.

Meople on May 2, 2014 at 9:35 PM

What is this “taxpayer” thingy of which you speak?

WryTrvllr on May 2, 2014 at 11:21 PM

There is still the GMAC/Ally Bank issue, which at last check was about $17 billion in the red (or most of what the Treasury put into it).

Steve Eggleston on May 2, 2014 at 9:13 PM

You know, I just realized. I have a substantial loss carried forward, good for another 13 years. Can I gift that to the feds in lieu of some of my tax burden?

WryTrvllr on May 2, 2014 at 11:24 PM

At one time they claimed we WOULD in fact make a profit.

And they touted the last loan repayment as if it were the last of taxpayer money outstanding – when it was only the last that had to be repaid, and was really paid out of other federal money GM got through other programs, not their sales revenues.

It is no longer a question whether the Obama Administration is lying, only a question of how big a lie it is this time.

Adjoran on May 2, 2014 at 11:29 PM

Government Motors….

Detroit is alive, and OBL is dead….

Jesus H. Christ.

BigWyo on May 2, 2014 at 11:48 PM

100% government corruption

TX-96 on May 3, 2014 at 6:15 AM

What about the losses of billions in stock value when the mobster Obama administration pissed on 200 years of bankruptcy law and wiped out those investors? Those “rich” investors were millions of middle class workers whose 401Ks were invested in GM stock.

No?

Jaibones on May 2, 2014 at 6:44 PM

Er, the stock of a bankrupt company is usually wiped out. What you’re looking for is the special treatment given UAW.

–snip–

Steve Eggleston on May 2, 2014 at 8:13 PM

As one of those small investors in GM (small for GM, not for me), I figured in a proper reorganization type bankruptcy that I might end up with pennies or dimes on the dollar.

With Government Motors, I feel that my tax dollars were used to steal my company away from me and give it to a union that I think has been more harmful than helpful these past several decades, and I strongly resent that, and may never be able to forgive that theft.

Kevin K. on May 3, 2014 at 8:27 AM

Can someone explain why anyone would buy a GM car? I recently did a cross country trip and saw many GM trucks in the ‘heartland’ where many Republican voters live. Shouldn’t voters take GM to task and buy Ford’s or Tundra’s instead?

Anyone who buys GM post this debacle is part of the problem.

uatu1878 on May 3, 2014 at 8:46 AM

uatu1878 on May 3, 2014 at 8:46 AM

Agreed. My family has always been a GMC family, but as of 2008 I’ll ride a horse and buggy before stepping in one of their vehicles again.

USNCVN on May 3, 2014 at 10:07 AM

Make that UNEXPECTEDLY higher.

Lee Jan on May 3, 2014 at 10:18 AM

Best decision ever made was getting rid of GM stock ten years ago.
If it becomes a penny stock, I might reconsider. Maybe.

Bet there are lots of Gimmedat’s who were in on this Obamugabe fleecing of the credit holders who took the (early) money and ran.
And the SEC slumbers because it is the New Chicago Way.
Lots of GM pensioners still working part-time because of King Putt ‘We Saved GM and Osama is Dead’ meme.

Stupid Americans.

Missilengr on May 3, 2014 at 1:38 PM

Townhall I hate you and your autoplaying video ads.

Kaptain Amerika on May 4, 2014 at 1:34 AM