Gov’t. to lose $14 billion of auto bailout funds

Source: AP

WASHINGTON (AP) — The Obama administration said Wednesday that the government will lose about $14 billion in taxpayer funds from the bailout of the U.S. auto industry, a third of the loss officials had initially estimated.

In a report from the president’s National Economic Council, officials said that figure is down from the 60 percent the Treasury Department originally estimated the government would lose following its $80 billion bailout of Chrysler and General Motors in 2009.

The report’s release coincides with the administration’s efforts to tout the bailout’s role in the revitalization of the U.S. auto industry after last week’s announcement that Chrysler is repaying $5.9 billion in U.S. loans and a $1.7 billion loan from the Canadian government. Those payments cover most of the federal bailout money that saved the company after it nearly ran out of cash in and went through a government-led bankruptcy.

For Obama, the auto industry comeback is one of the few bright spots in an otherwise sluggish economic recovery. What’s more, the auto industry has a big footprint in key presidential battleground states like Michigan, Ohio, Indiana and Missouri.

Read more: http://www.omaha.com/article/20110601/AP/706019767#gov-t-to-lose-14-billion-of-auto-bailout-funds

They are making profits up the ying yang and the tax payers lose 14 billion??? And this is a "bright spot".... w are definitely shafted again.

put a special tax on their profits. Our politicians are criminals.

For the price of one of these



an entire industry was saved. The difference is, they won't have to bail the auto industry out again, but they are building nine more of these, which are highly profitable for someone.

before taxpayers were repaid in full and then some. Try to save the industry for the workers, yes, but don't unjustly enrich private investors at taxpayer expense. Also, there is no earthy reason anyone but the "spiller" has to bear the cost of an oil spill.

Besides, a well-documented investment by the U.S. taxpayer in a company with private owners is not in any way comparable to an accidental oil spill in waters no one really owns. And there is no connection whatsoever betwwen making a bad deal for the U.S. taxpayer with GM and an oil spill, anyway. Not as though enriching GM stockholders somehow means we'll have fewer oil apills to pay for in the future. No reason to pretend there is some connection between the two.

the "investments" of our money Obama and his shrewd financial advisors had made.

those loans.

He wouldn't lie to us, would he?

Would he outright lie to us? I'm sure he'd try really hard not to, even if only because these days an outright lie is fairly easy to prove.

Would he word things in such a way as to convey one impression while keeping in his pocket the ability to say "That's not really exactly what I said?" if someone called him on it? Sure. He's done so many times.

And people called Bubba "Slick" and the Teflon President!

the government bought equity in the auto companies as part of the bailout and has been selling. unless the government holds on and waits for the stock prices to go up, it would lose money at current prices.

that's where the potential $14bn loss is.

that it will definitely lose $14 biilion whenever it does sell."

Fact remains, ny deal we made that allowed the company to turn a profit while U.S. taxpayers lost billions was a lousy deal for U.S. taxpayers and no excuse whatever for making a lousy deal. We had all the leverage when that deal was struck. (I disagree we could now lawfully legislate a special tax on the profits, as Reply 2 implies. However, we could have achieved the same result by contract when the deal was done by structuring the deal properly-- and without using the word "tax.")

And that is really the point, not whether the losses are via failure to repay or via sale of equity.

If they did - a clawback is in order.

http://www.thetruthaboutcars.com/2010/06/new-gms-executive-compensation-revealed/

snip: The Detroit News took a look at GM’s SEC filings, and reports on the following stock compensation packages:

• Chairman and CEO Ed Whitacre: 24,547 shares of salary stock. ($2.36m at $96/share)

• Vice Chairman Steve Girsky: 18,063 salary stock units. ($1.73m)

• Chris Liddell, vice chairman and chief financial officer: 15,979 shares of salary stock ($1.53m). His compensation package totals $6.27 million, $900,000 of which is cash.

• Tom Stephens, vice chairman of global product operations: 50,521 shares of restricted and salary stock. ($4.85m)

• Tim Lee, president of GM’s international operations: 25,440 shares of restricted and salary stock. ($2.44m)

• Nick Reilly, president of GM Europe: 31,438 shares of restricted and salary stock. ($3.02m)

• Mark Reuss, North American president: 25,104 shares of restricted and salary stock. ($2.41m)

• Mary Barra, vice president of global human resources: 12,957 shares of restricted and salary stock. ($1.24m)

• Selim Bingol, vice president of communications: 258 shares of salary stock. ($24,768)

• Vice President and Chief Information Officer Terry Kline: 12,959 in restricted and salary stock. ($1.24m)

• Vice President Michael Millikin, legal and general counsel: 19,142 in restricted and salary stock. ($1.84m)

• Nick Cyprus, vice president, controller and chief accounting officer: 19,002 shares of salary stock. ($1.82m)

received stock as part of their compensation @ the same price as the CEO ($96/share) then they have a long way to go before those shares are actually worth something.

GM is currently trading @ $26.60/share so those stock grants are worth, effectively, zero.

additionally, paying someone in stock, at a higher "strike price" is a wise way of paying folks as it gives them a great incentive to grow the company in order to get the stock price to, or above, the strike price.

it was a loan. Now it turns out it was a bailout and some of it isn't going to be repaid.

Except GM already paid it back http://crooksandliars.com/karoli/congratulations-gm-all-tarp-funds-repaid-5

Now I'm really confused. Someone is fudging the numbers here.

You do know the whole capitalist system is nothing but a mega giga ponzi scheme, don't you. :rofl:

Many "someones" are, with many different agendas. An easy way to spot it is:
-if the huge sets of deals that were made are simplified to single words like "loan" or "investment" or "bailout",
-and if complex companies like GMAC Financial (rebranded ally) and General Motors (and subsidiaries) are simplified to being one only company ("GM"),
-and the many instruments involved (preferred stock purchases, capital loans, loan guarantees, (etc.)) are lumped together and characterized as a single item...

Oh, and did you know we also "bailed out" Toyota? Harley Davidson? Car loan companies? Car Dealerships? There's a lot more to the US auto industry than just GM/Chrysler, and depending on how the numbers are sliced, there's going to be a *lot* of differing interpretations.

This might help explain the problem of scope:
http://www.nytimes.com/2010/12/02/business/economy/02fed.html?hp

21,000 different transactions, as of 12/1/2010.

Part of the bigger "bailout" also went to those "money grubbing" Unions and also to public worker pension funds, so who knows if, say, GM worker pensions are part of the "loss", even when GM pays back loans, (but we lose money on the stock, and retired workers still get pensions from US taxpayers).

In short, if *any* article/speech/opinion on the general topic is simple, straightforward, and easy to understand... they're doing a lot of hand-waving and glossing over the details.

socialism for corporations, that is...predatory capitalism for the rest of us.

Source: My San Antonio

Taxpayers will lose about $14 billion in the government's $80 billion bailout of Chrysler and GM, the White House said Wednesday, portraying the outcome as good news since the losses are far lower than originally anticipated.



Read more: http://www.mysanantonio.com/news/article/White-House-promotes-auto-bailouts-cites-paybacks-1404617.php

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14BN and this is good news?
I'm a little confused???

This Can't be good
http://www.msnbc.msn.com/id/43238760/ns/business-eye_on_the_economy

That's politics.

It's not just politics, people are homeless and need jobs, that's a serious issue
I'm thinking maybe we should have just let them die out {edit: I mean the bailed out companies}

People are talking about ending medicare, so no it's not just politics

different angle than the angle you're seeing it from. The people who are footing the bill for this are also losing their homes and livelihoods and going hungry no matter how a politician spins it.

That's about the realest reality there is. In my book.

and I'm :grr: mad as hell

One second you are talking about people needing jobs and the next, you're advocating letting the auto companies go under which would've cost a million more jobs.

Had GM and Chrysler gone bankrupt and defaulted on their pensions. We the Taxpayers would of been on the hook for 50% of the defaulted pension amount IIRC.