GM Bankruptcy to Bring Taxpayer Ownership

[dgriffin]

GM Bankruptcy to Bring Taxpayer Ownership, Less Debt



June 1 (Bloomberg) -- General Motors Corp., the world’s largest automaker for 77 years, will file for bankruptcy today, a landmark for an industry that defined American economic might.

The filing, which GM executives said last year wouldn’t happen, marks the plunge of a company that used to make more than half the cars bought in the U.S., including the Corvette, the Cadillac and the Pontiac GTO.

The move follows the bankruptcy filing of Chrysler LLC and represents the Obama administration’s attempt to remake a 100- year-old company that became burdened by higher costs than competitors and a reliance on fuel-guzzling light trucks as gasoline prices rose. Japan’s Toyota Motor Corp. surpassed Detroit-based GM last year as the world’s largest automaker.

“Our objective is to make sure we’re limiting our involvement to the minimum necessary, and that we get out of those involvements as quickly as we can,” Treasury Secretary Timothy Geithner said today in Beijing. “We want to have a quick, clean exit as soon as conditions permit.”

The “new GM” will get $30.1 billion in bankruptcy financing from the government, and the Treasury “does not anticipate providing any additional assistance” after that, the Obama administration said yesterday in a statement. The federal government will have a 60 percent equity stake in the retooled automaker, and 12 percent will be held by the Canadian government, which is lending $9.5 billion to the company.


I can't decide whether it's greed or stupidity that has caused the demise of one of the world's strongest industries in the United States. The last American new car we bought was a Chrysler in the 90's. Piece of crap. I've owned two small Ford trucks, Chevy sedans, Mercury, etc. Ditto.

I had stopped buying American in the seventies when US autos started rusting to pieces in my driveway. But then foreign car prices rose sharply with the inception of tariffs said to help protect Detroit....protect them from losing money as they sold substandard vehichles, I guess. So, I haven't been a fan of carmakers in the US for a long time. Now that I'll own a piece of the huge mess executives are leaving behind ... did they get their bonuses? ... I can't say I'm any more disposed to buy a car from my local cheapjack GM dealer. I'll "buy American" by purchasing another Toyota made here in the States, keeping stateside manufacturing jobs, while GM ... MY General Motors? ... sells out to the Chinese.

[corner]

ok so we gave them billions and they still tanked wouldnt it have been betterto let them tank from the beginning and not giving themmoney this is a case where the unions, stockholder greed brought down a cororate giant

[Clipper]

I find this whole automaker bailout to be totally confusing, and I still don't understand how or why we are bailing them out. It makes no sense to me for the government to own 70% of a car company and the company is not expected to pay back the "loans" from we, the taxpayer.

People screamed bloody murder when some of us were wary of Obama's suspected socialist leanings as well as those of his bride, back when they were in college. Well, I don't see where government owned auto companies and a push for socialized healthcare can be called anything else but socialism. We now have government owning a percentage of the largest banking institutions, insurance companies, and now the automakers. What is next?

I recently took, my 2005 truck with 34,000 miles on it, into a local dealer to check on a trade. I was able to work a deal for a brand new truck, with all the bells and whistles, including a 110v plug for a laptop, haha. The payment would have been the same as I am paying now. I got right down to where I was to go in the next day and sign the papers, and I backed out.

I may be looking at it wrong, but I could not see buying a truck for $28,000 after the supposed $10,000 off the price, and not know what will happen to it's value over the next few months. Number one, I NEED to be assured of the warranty coverage on a 4x4 truck with all it's expensive components. Number two, I need to know that my truck is not going to plummet in value when the manufacturer goes bankrupt.

Anybody got any idea what is happening, or what will happen if one were to buy a new car in today's economic climate? Is anyone more savvy and able to understand this whole mess? I really need to stick with Dodge, if they survive, because of the torque and pulling power for our trailer. Nobody else provides an engine with the hp and torque of the hemi in a 1/2 ton truck without going to a diesel engine, which I don't want. I don't want a pickup that smells like a city bus when it takes off, and sounds like a Peterbilt, LOL.

Any comments or suggestions from those more in the know than I am?

[Clipper]

OH yeah, one more question. Who the hell in our government is going to be in charge of managing "our" (the government) stock portfolio with all this banking and auto stock. WHO and what branch is going to be given the ability to make MORE foolish decisions with my money?

I actually became comfortable for a short time with Obama's election victory, but I am very afraid with the road he is taking us down, diplomatically, strategically, economically, and militarily. He is a scary person who seems to simply make decisions without forethought, and seems to simply want to undo whatever had a Bush tag on it, and seems to place more importance on making a mockery of Bush than on protecting and securing our country.

I have my worries that we will spend all of these billions and the automakers will still fail. We can't afford to have the auto industry collapse, but we can't afford to support them like stepchild of the government. The collapse of GM or Chrysler, or both, would mean a devestating blow to employment, and the entire economic climate in the US. My questions would be, will we ever get our tax dollars back? Will the government eventually get out of the car business and get back to the business of governing? Will the greedy bastards that put the automakers in the condition they are in now, be taken to task, fired and shown to be the charlatans that they are? Will outsourcing of jobs and importing parts be stifled? Has the UAW backed down enough to make an american made car affordable to the average American, and comparable in quality to an american made foreign car, while allowing the automaker to profit?

[wcup102]

Probably the asshole speculators on Wall Street will head it, theya re the ones that started this whole mess with fuel prices and shit.

[clarencebunsen]

Not to worry. By this time next year both your auto warranty and your health insurance will be handled by a quasi-public corporation combining the warmth of the IRS with the timliness & efficiency of Amtrack and the attention to the bottom line of the NYS legislature. Any warranty claims will be processed in 6-26 weeks as long as you have filled out the proper paper work and kept all of your receipts since first purchase.

Of course you will have to leave the truck until your claim is processed. After that you will receive a voucher to have your warranty work done at a former Saturn dealership in Ashville, NC, now designated as Regional Federal Repair Center.

[concerned]

it's called socialism. Keep giving more and more so called governmental loans and tell the People that they own part of the stock. I would rather see a real form of communism at least we all share equally in the govenment

[chris]

Well according to His Greatness......it will be a long time before we recover and it will be our next generation flicking the bill to get us out (I'll be way gone by then).

(As I was picking up an ink cartridge in Staples for my printer I was reading the side of the box to look for the printer model and noticed printed on the side of the box "Made in Mexico". So why the hell are they crossing the border over here. They have taken over most of our jobs out of the country .

[Swimmy]

Jun 1, 2009 16:37:46 GMT -5 wcup102 said:

Probably the asshole speculators on Wall Street will head it, theya re the ones that started this whole mess with fuel prices and shit.

That or the oil companies' ceos' duty to the shareholders... :/

[Swimmy]

$500 million out, and 60% government ownership...

Yep, "Change We Can Believe In"!

Who's up for moving to my new country, Swimmyland?

[Swimmy]

If we had just let gm flounder like I said, it would have been a lot cheaper and the economy much better off NOW.