The government dumped tens of billions of dollars into General Motors, and then dictated a “political bankruptcy” that trampled the rights of senior creditors in order to cut a sweetheart deal for the Obama administration’s union pals. Americans expected to see that pay off in broader investment and job creation, and that’s precisely what GM has in mind … for Europe. ABC News reports that GM plans to spend billions restructuring its Opel subsidiary rather than its core American businesses, and that has some lawmakers seeing red:
Specifically, at a time when the nation’s unemployment rate has soared to levels not seen in decades and GM is cutting thousands of U.S. jobs, the company’s CEO is considering spending millions from its U.S. coffers — fattened by $50 billion in taxpayer aid — on its overseas operations, a possibility that has outraged critics and lawmakers.
“I don’t think most Americans believe that when the taxpayer bailouts were happening it was intended for that purpose,” said Rep. Anthony Weiner, D-N.Y. “It was intended to protect the American economy — not take the money overseas.”
GM’s Chief Executive Fritz Henderson recently announced that the bailed-out automaker might use its U.S. funds to help restructure its European unit Opel, noting that the financing agreements with the Treasury for the $34 billion of bailout funds already spent allow GM to spend any subsequently earned funds as its executives see fit. Some $16 billion remaining after its bankruptcy has strings attached.
And it’s not just Europe, either:
GM has other plans to expand its business abroad. In August, GM China announced a $293 million venture, while last month GM South Korea announced a new infusion of more than $400 million. The automaker also recently inaugurated a $300 million transmission plant in Mexico.
Well, why not? GM is making money again, and so — oh, wait, they’re not:
General Motors Co. says it lost $1.2 billion from the time it left bankruptcy protection through Sept. 30, far better than previous quarters and a sign that the auto giant is starting to turn around.
Well, OK, they’re doing better, so that means — oh, wait, they changed their accounting practices, too:
Chief Financial Officer Ray Young cautioned that the second- and third-quarter figures don’t comply with U.S. accounting standards and shouldn’t be compared with previous earnings.
GM says it is re-valuing its assets and liabilities and should comply with accounting standards next year.
Let’s get this straight. GM gets tens of billions of dollars in taxpayer money and gets an Obama-managed bankruptcy — and stops complying with accounting standards? My goodness, they really are Government Motors!