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  1. #346
    Joined
    Mar 2002
    Location
    California
    Posts
    26,262

    Re: Big 3 Auto bailout

    Don't see what all the fuss is over, all we need to to is increase the subsidy for every Volt from $10k to $49k... profit!

    The Chevy Volt's $89,000 production cost: A waste of money?

    Reuters reports that GM is losing $49,000 for every Volt it builds, renewing criticism that the eco-friendly hybrid willnever be profitable

    Just remember...

    Tax breaks that help UAW union thugs = good.
    Tax breaks that help job creators = bad.

    Obamanomics 101.
    "The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us...
    Only people pay taxes, and people pay as consumers every tax that is assessed against a business."


    -The Gipper


  2. #347
    Joined
    Sep 2001
    Location
    Colorafornia, USSA
    Age
    46
    Posts
    13,817

    Re: Big 3 Auto bailout

    Hybrid/electric/gas means nothing, GM has never been able to make a profit on their small cars. This is why the Japanese and now Koreans in particular have made such great inroads here in the US. The only reason GM is even still around at all is because of the huge SUV boom that they were lucky enough to be in the catbird seat for. They were able to take a huge profit on glorified pick up trucks with leather interiors and heated seats. They were making an actual profit on the Cadillac Escalade and GMC Denali of around $10k per vehicle for example. Those days are now over and people now want small, inexpensive cars that GM is not, nor will ever be in the position to make a profit on. I've read that GM must charge an extra $2k per vehicle just to continue paying for their retired employees retirement benefits. This doesn't even take into consideration their current employees.

  3. #348
    Joined
    Mar 2002
    Location
    California
    Posts
    26,262

    Re: Big 3 Auto bailout

    Bailout on the Brink

    Judge Set to Rule on Case that Could Reverse Auto Bailout

    A New York federal judge may rule imminently on a case that could reverse the General Motors (GM) bailout and send the company back into bankruptcy, according to sources close to the case.

    At issue is a backroom deal hatched by GM to fulfill the Obama administration’s demand for a quick bankruptcy, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009.

    One condition of GM’s bailout was to shore up its overseas subsidiaries. On the eve of entering bankruptcy, the company cut a $367 million “lock-up agreement” with several major hedge funds to prevent GM Canada from failing. The agreement ensured that GM could spin-off its liabilities to “old GM,” while using a multi-billion dollar bailout to create a new company.

    All of that could be reversed if bankruptcy Judge Robert Gerber reopens the process and rules in favor of old GM trustees, who are suing the hedge funds at the center of the lockout agreement.

    “In this particular situation, there’s $1.3 billion in liabilities, but that’s just what’s officially back on the table if the court rules for old GM,” said a bankruptcy expert close to the negotiations. “If those go back on the table then everything could be back on the table and [new GM] would have to address them.”

    Those liabilities, which include old GM’s debt and product liabilities that pre-date bankruptcy, are valued at $30 billion, a sum that would wipe out the company’s $34.6 billion cash reserves.

    Negotiators representing both sides of the case met in New York on Thursday to try to settle the suit through mediation rather than a court order.

    “They’re feeling pretty good about it,” said an industry insider who spoke to one of the hedge fund negotiators on Thursday.
    Gerber, the federal judge who initially approved the sale with little hesitation, now has the power to reverse the entire auto bailout. He has expressed deep frustration with the company for failing to disclose the deal, leading some to speculate that he may overturn one of President Barack Obama’s signature achievements.

    “When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.

    “The judge has made it very clear that he is greatly dissatisfied with the process,” one analyst told the Washington Free Beacon in October. “He’s basically implying that GM hid it from him and that reopening the sale is a possibility.”

    If Gerber takes that course the company could be forced to return the $30 billion taxpayer bailout that it received through the course of bankruptcy, on top of the new liabilities.

    “It’s nice to see that GM is profitable again, but if all the liabilities come back to roost, short that stock,” the bankruptcy expert said.
    A GM spokesman declined comment since the litigation is pending.

    The Canadian and American governments played vital roles in the deal and pushed GM to negotiate as quickly as possible.
    “Officials from the U.S. and Canada were very much involved—they were in the building when the deal was being negotiated,” an insider familiar with the deal said in October.

    The Treasury Department, which oversaw the auto bailout, did not return emails for comment.

    The company is taking the possibility of a negative ruling from Gerber very seriously. GM attorneys filed court documents saying that the lawsuit “could create a chaotic situation for GM Canada, spawn new litigation in other forums, and potentially provide a windfall to the noteholders.”

    The bankruptcy expert said if the two sides cannot come to an agreement on Thursday, Gerber could preside over one of the most historic rulings in bankruptcy court history.

    “This has tremendous implications for future of American business and bankruptcy precedent,” he said. “It means more than just GM—this is the rule of law and how creditors are treated in the United States legal system.”

    Sure would make things interestin'. But even if the judge did so the UAW's messiah would simply step in again against legal precedent to protect his followers.
    "The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us...
    Only people pay taxes, and people pay as consumers every tax that is assessed against a business."


    -The Gipper


  4. #349
    Joined
    Mar 2002
    Location
    California
    Posts
    26,262

    Re: Big 3 Auto bailout

    Post election stock sell off results predictably... taxpayer gets f*cked so UAW douchebags can keep their jobs.

    Taxpayers to Lose Billions as GM Buys Stake Back from Government

    The American taxpayers stand to lose billions as General Motors today announced a plan to buy back 40 percent of the company owned by the federal government.
    "The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock's closing price on Tuesday," the Detriot News reports.
    However, the break even price — the price that GM would need to pay for each share in order to pay back the money the government put in to the company —was $53 a share. That number has now risen dramatically.
    "As a result of GM’s buy back, the government has recovered about $28.6 billion of its $49.5 billion GM bailout, which means it will most likely lose billions when selling its remaining shares," MLive.com reports. "The government would need to sell its remaining shares at a price of $69.72 to break even. That’s up more than $15 from earlier this year, when the U.S. Treasury would have to sell its 500 million remaining shares at about $53 per share."
    GM, or "Government Motors" as some critics have called it, has continually been ridiculed due to the government ownership, which was the result of the auto industry bailout that began under President George W. Bush in 2008 and was expanded by President Barack Obama in 2009.

    The U.S. Treasury initiallyowned nearly 61 percent of GM as part of the auto bailout, which forced the automaker and crosstown rival Chrysler through a government-backed bankruptcy.
    The Obama administration completely exited Chrysler last year after recovering $11.2 billion of its $12.5 billion bailout to the Auburn Hills-based automaker.
    And who's footing the cost? The American taxpayer, of course.


    "The most dangerous myth is the demagoguery that business can be made to pay a larger share, thus relieving the individual. Politicians preaching this are either deliberately dishonest, or economically illiterate, and either one should scare us...
    Only people pay taxes, and people pay as consumers every tax that is assessed against a business."


    -The Gipper


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