Wednesday, April 21, 2010

GM Repays Government Bailout ... But ....

Today, General Motors paid the government back the last $5.8 billion of the total of $8.1 billion is received in federal government bailout loans. The loan payback came five years ahead of schedule.

Does this mean that Obama and his union thug backers don't own GM anymore? Not by a long shot.

Obama owns 61% of GM, equity from $45.3 billion it received in government grants (as opposed to loans) during the bailout. Canada owns another 12%, from $9.5 billion it loaned/granted to GM as part of the bailout package. GM plans on paying back both governments late this year with proceeds from a stock offering.

Now, theoretically, that will end Obama's government ownership/direction/participation in GM, and return it to its staus as a publicly owned company. I sincerely doubt it. Obama was very carfule in how he orchestrated the bailout of GM. He made sure his people and union people would be running the company. I am pretty certain that he has buried provisions in the bailout agreement that will allow the continued government direction of the company. He is too smart to let it just go back - too big a prize to let go of.

I might end up being wrong on this, but I really don't think so.

Update - Well, hold on a minute ... Sen. Charles Grassley (R-IA) has accused Obama of misleading taxpayers about GM's loan repayment. Sen. Grassley charges that the loan repayment was actually made with other bailout funds - a charge substantiated by the Inspector General for the TARP fund (where the bailout money came from). The repayment was not made in any part from profits GM made by selling cars.

Why would Obama do this? He and Biden have been out crowing to the media how the loan repayment was strong proof that Obama's bailouts are producing spectacular results. Spectacular shell game, more like it.

I don't know if there were any laws broken doing this, but it was immoral, misleading, and stinks ...

Update II - With GM's new boss on TV commercials touting how they paid back their loan 'in full, five years early', the FTC and SEC are getting interested in this. Such a blatant misrepresentation could easily be interpreted as misleading stock holders, investors, potential investors, and GM customers. Making false statements about the financial condition of a public company is a crime ...

No comments: