Reason.tv: How Did GM Pay Back Its TARP Loans So Fast? Well, It Didn’t…
by Nick GillespieGeneral Motors CEO Ed Whitacre has bragged in TV commercials and newspaper columns that GM has paid back its bailout “in full and ahead of schedule.”
As with the Pontiac Aztek, an ugly exterior masks an ever darker problem: Whitacre is being fanciful to the point of deceit. GM received $50 billion in TARP funds (never mind that TARP was only supposed to cover financial institutions). About $7 billion of that came in the form of a straight-up, low-interest loan. And about $13 billion came in the form of an escrow account.
So how has GM, which lost $38 billion in 2007 even as it sold 9.4 million cars, paid back its debt? It took money from the escrow account to pay back the $6.7 billion loan.
Do you remember when you were a kid and your parents gave you $20 to buy them a Christmas present? You bought them something worth $3 and pocketed the rest? That’s what GM has just done.
Oh, and do you remember when you hit your parents up for college? GM has applied for a $10 billion, low-interest loan from the government to modernize its plants so its cars will meet new federal mileage standards.
If you think all this constitutes paying back their debt in full and ahead of schedule, you might want to check out the new line of GM cars. And hope that the company’s safety engineers are better at math than their CEO.
Approximately 1.35 minutes. Written and produced by Dan Hayes, Meredith Bragg, and Nick Gillespie.
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61 Comments
Now we know all the Enron accountants went to work. GM and Greece.
creative gooberment accounting 101? yep
Prior to the government takeover of General Motors, they had at least a shred of honesty.
precisely why I bought Ford … at $2 a share!
Ok that is an excelent accounting of GM's "Lets do a snowball job on John Q taxpayers". we wouldn't want to embarrass the Obama Administrators. Now let's add another twist to this story. In the last quarter GM reported a lose of 3.5 bil. Now that smells disaster for GM in the very near future and not so good a future to the invested taxpayer either. If I were you stock holders I would sell my stock before there is nothing left of value. GM cannot and will not be able to come out of this without a significant reorganization of it's debt and union contracts.
In the commercial Ed Whitacre tells me he can "respect me" for disagreeing with the GM bailout. Oh thank you Mr. Whitacre; the approval of a fraudulent huckster like you really means a lot to me. Now I'm going to see if I can get the blessings of Bernie Madoff and Enron's Jeff Skilling to round out my collection.
What contempt GM shows for its prospective customers. I would never buy a car from a car from a company that assumes I'm an idiot.
More Gangsta Gubmint. Has their ever been a more arrogant lying group of pr*cks than the crowd now in Washington ?(…of which I now consider GM a part) They subscribe to the Bernie Madoff school of economics and Tony Soprano principles of accounting.
Can we say "shell game"? And what is up with the $13B escrow account? Is that not also a loan?
How did GM pay the government union bailout back so fast?
They cheated, to make Obama and the democrats look better before the up coming election season really kicks into high gear.
.
G.M. should have a little teeny tiny bit of integrity and pull that LIE of a commercial. Now.
That he actually made an ad with his lies was beyond audacity. Does he think we're that stupid?!!! I'm so pisssssssed off I could scream at the waste of money we're seeing just flitter away. I keep wondering if anyones skimming a few billion from the top for their own nefarious deeds aka Obama, UN, and ….they need trillions to set-up their scheme. I was so relieved they didn't get our dollars at the carbon summit but maybe they're getting it another way. Greece will be made into their image and it's only the beginning.
Simple answer: NEVER, NEVER, NEVER, NEVER buy a single GM product of any kind.
Let the parasites in the UAW follow their God Obama over the cliff. Good riddance.
I'm heading to the Honda dealership…
in a word: yup
If I bought GM stock based on the declaration that the company paid off those loans, are they now guilty of fraud for failing to disclose vital financial information?
Assume everything the Obamatrons say is a LIE, PROPAGANDA or SPIN, and you won't get quite as pissed when it is later revealed by the 5th estate (internet, talk radio, bloggers etc) and ignored by the 4th estate (MSM) which is now the 5th column (subversives). This one was obvious, as GM continues to have heavy losses, not profits. Their lies have become more brazen ever since the sheep were convinced to be afraid of CO2, the sheep can ride in a Volt; I'll buy Ford, not gummit motors.
The Ford Foundation is a huge socialist organization devoted to left wing causes.http://discoverthenetworks.org/funderProfile.asp?...
It was not sound management or integrity that the Ford Motor Co. was spared from Obama’s totalitarian take over.
They were in worse shape than GM and Chrysler combined 2 years before the socialists took over. They stayed under the radar even when their stock was at $2.25 a share.
They simply belong to the socialist oligarchs’ class of protected corporations.
The Ford Foundation is the ONLY reason this company is still around.
And maybe the F150.
Hey thanks for that info. I read that link and I was shocked and dismayed. Ford started making cost cutting moves while I was selling Fords(and managing a Ford store) and I was an avid reader of "Automotive News" which detailed Ford's problems and how they were going to get back to solvency, and they did it. Bill Ford basically fired himself and brought in Mullaly who amde a series of tough decisions.
I suspect that the Foundation benefits fro Ford doing well (obviously) but isn't a source of finacing form the corp., that seems like a conflict, but I don't know,
Thank you for the link, very interesting and disgusting
seems like it J.A., the "audacity" keeps getting "better and better" doesn't it?
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Wow shocking info. I guess I'll continue to buy only used Ford's so my money doesn't go directly to this subversive anti-American organization.
So I should be able to borrow $500,000 from a bank for that mortgage and only have to pay back $67,000. Sweeeettt! I love this new Obamath!
FTC!!!!…FTC!!!… Where the hell are you!!!! GM ain't telling the truth! You're supposed to stop them! Where the hell are you???
Oh, you've gone down the road with Obuthead. Figures.
"Well…….OK…maybe the F150 helped."
True–but the Detroit Lions (owned by Ford) sure as hell didn't help!!!
I bet Lee Iacocca wants to b*tch-slap Whitacre (and Obama).
I would think so–but the rules are different for Obama and co.
This is nothing more than a lie to cover up a lie told by a liar who lies all the time. (Insert the name of your choice.)
Welcome to the first 5 year plan. Don't think so? An invite to room 101 sir….
I don't mind the fancy footwork as much as I do the outright LIE Whitacre tells us on TV. Who would buy a car from this JERK?
Ford got some extra sales because they stood on their own two feet.
Why is this guy trying to deceive us so he appears like the good guy?
Then again, why do people SPAM your e-mail account? Who would do business with them, knowing they have no respect for your privacy or your intelligence?
Given this little charade and bragging about it, I wonder how much of this accounting sleight-of-hand was done at the worst signal quality network, AT&T, when Whitacre was there? BTW, my brand NEW car is a VW. No Gummint Motors or Chrysler cars here. Ford was in the running but could not offer what I wanted, a diesel that does not need AdBlue.
Know a perfect name for their new model…….The GM Spin.
Does this mean the government no longer owns GM?
Ha……No kidding! He uses the team and the new Ford Field as a rich dude’s toy.
Not that I’m complaining with that but, he’s seems quite comfortable with mediocrity.
don't by GM
The Fords think they can run a football team the same way as a car company. They have been so wrong so often that it's laughable.
My uncle used to coach in the NFL, his last stint being with the 49ers. Steve Mariucci asked him to go to Detroit, and my uncle chose retirement instead! I sure don't blame him!!!
We've been a Toyota family for many years now and have been very pleased with their products. We've driven all of them well over 150K miles with nary a problem.
This is the new math "Obamath" to be taught by union teachers in government schools.
Don't forget Whitacre was APPOINTED by Mr. Obama after he fired the Legitimate CEO. I sold GM produtcs for 20 years but now I would not EVER buy a GM car, they should be closed down and say goodbye, screw the Unions……
I refuse to buy even a tube of touch up paint from GM. Obama is keeping GM alive soley for the Unions who OWN Mr. Obama. (Can't call him "President" anymore..).
I hear those GM commercials when I'm listening to talk radio, you know – the one with the CEO saying how they paid back their loan. Then I start to imagine the meetings that took place in some kind of "Mad Men" advertising office where some advertising account manager is telling the GM guy that the public is stupid and breaking down all the demographics about how running these radio spots with your CEO telling everyone how you've paid back the government will get those dumb-dumbs in the door. Then the junior advertising guy says "Yeah! We should run them on conservative talk radio, because all those dim tea-party people will eat this s**t sandwich because they're all about supporting America."
I will NEVER buy or use a product from a government bailed-out company.
Iacocca should be on TV blasting the Giant LIE told by Whitacre (Omama) and telling the American taxpayer the truth; the company should have went banko and break the backs of the worthless UAW. All of you that are a member of UAW, it's not too late to walk away and hold your heads high. If you choose not to, the embarassment of complete failure is soon to follow….
I wonder who wrote the script for the commercial? Probably the same team from the WH that holds to the lie that we just need more "education" to "understand" why we need to have all these progressive ideals stuffed down our throats so fast so we hardly have time for the gag reflex to react. News flash…. Gag reflex will be working just fine in November.
PS. If Toyota would run a commercial like this… they would be in front of a Senate inquiry by now.
We’ll isn’t that cute! If you could get a Mexican SS# and some government money, man oh man, you too could pay your debt, or not!
I won't touch a Govt. Motors car anymore. My next car will be a Toyota, in order to keep them operating in the face of government attacks on their excellent product. Under Obozo our government has turned into a union of thugs!
Speaking of those constant attacks on Toyota, isn't it a little too perfect that this massive recall occurred soon after the bailout of GM and Chysler? Just like it's a little too perfect that the offshore oil well blew up just as Congress was starting deliberations on the Cap and Tax bill?
I was spitting nails when I first saw this propaganda commercial produced by our government. It is unlawful to participate in false advertisement. They should be held accountable by every Attorney General in every State where this advertisement was played. Of course, us taxpayers would be liable for the fines given we own GM, perhaps the 53% of us who actually pay taxes can obtain a tax credit with the false advertising fines.
I think Whitacre has been hanging around the UAW meeting hall too long. No doubt the Obama Admin came up with the concept for the commercial. How stupid they think we all are. A 6 year old could see through this fraudulent claim.
Respect this Whitacre, you're a dumbass on a sinking ship!
The scary part of the commercial is that there are a lot of people out there that will take what he is saying as the gospel truth. These people are the ones who think that the govt can run our lives better than we can. These people do not know what self responsibility even means.
All GM is doing is trying to sell cars by only telling the American people a small part of what they are doing so that technically they are not lying to their consumers. Shame on them for trying to pull the wool over our eyes.
I have driven Chevy & GMC pickups since I was 16 with one being used and the rest new. I am due for a new one in about a year. It will be a Ford or Toyota.
I have bought 5 new GM vehicles over the past 20 years. I will NEVER buy another GM product again. I bought a new truck last month, it was a Ford.
[...] Reason.tv: How Did GM Pay Back Its TARP Loans So Fast? Well, It Didn’t… from Big Government by Nick Gillespie [...]
General Motors CEO Ed Whitacre only reason for being at GM is to mess up things. There are those CEOs now that don't know a thing about the business they are in; but know how to work the system.
the first time i heard that ad my BS alarm started clanging so freakin' loud my head hurt. there was no reason to even bother checking it out it was so obviously a big fat snow job.
[...] How long will it be before we the taxpayers have to put more money into GM? And don’t believe the commercial from GM’s new puppet CEO Ed Whitacre where he claims to have paid back the $7 billion loan early? Don’t buy what he’s selling you. They did pay it back, but the funds came out of a government-provided escrow account that was funded to the tune of $13 billion of our dollars. Yep, they took money from us with one hand to pay us back with the other hand. There’s a nice writeup on it here. [...]
As someone who is getting their Masters in Accounting and just completed a Govt Accounting class, I find this absolutley hilarious. In govt acctounting, there is no liabilities or equity, just a series of "funds". Frugailty is punished and wastefulness is rewarded. Also, there's a lot of shady shifting of money between various funds to eliminate any positive balances remaining at the end of the period. I suspect this is exactly what happened here.
Hey, at least Bernie and Jeff didn't go whine to the government to cover up their f*ck-ups. I'll take a crook over a crook/parasite any day.
Medocrity is putting it mildly
2001 2-14
2002 3-13
2003 5-11
2004 6-10
2005 5-11
2006 3-13
2007 7-9
2008 0-16!!!!
2009 2-14
That's not mediocrity. That's full blown SUCKAGE
[...] their loans”. Are you kidding me? Again, only in make believe government land. As Reason points out (I particularly like the italicized line): GM received $50 billion in TARP funds. About [...]
[...] And lastly, let me address the notion that GM has paid back its loans early. It hasn’t. [...]
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