: Report: GM to announce repayment of federal loans in full on Wednesday



The Tony Show
04-20-10, 01:10 AM
According to Autoblog, GM will be repaying the last of the cash portion of their loan from the American Government (and taxpayers) on Wednesday. The cash portion of the loans will then be repaid in full- the remaining $37B was "paid" at the time of the BK by converting it into 60% ownership of GM, meaning that the loans will be considered settled as of the $4.7B payment on Wednesday.

Analysts expect a public stock offering from GM in the near future, at which time the Government will likely sell off their shares to recoup the rest of the loans, ending an unfortunate chapter in the history of America's biggest car company.

More here (http://www.autoblog.com/2010/04/19/report-gm-to-announce-repayment-of-federal-loans-in-full-on-wed/)

Stingroo
04-20-10, 01:14 AM
Hooray! *does the victory dance*

greencadillacmatt
04-20-10, 01:14 AM
About time! (lol)

Stingroo
04-20-10, 01:18 AM
Watch. IPO. Q3. Called it ahead of time.

I~LUV~Caddys8792
04-20-10, 01:20 AM
Take that, Lee Iacocca!

77CDV
04-20-10, 02:05 AM
Does this mean all the Government Motors stuff will finally come to a merciful end?

itschrome
04-20-10, 02:17 AM
cool, will this also mean Cadillac can ditch the XTS for a proper flag ship??

The Tony Show
04-20-10, 11:32 AM
The US Government has stayed surprisingly hands-off with GM. The doomsday scenarios of vehicles like the Camaro, CTS-V and Escalade being canceled and replaced with 2 cylinder econoboxes never came true, which indicates to me that the loans were more about shoring up the job market and preventing a crash across the industry than seizing control of an automaker and changing them.

I don't think the XTS is the result of the Government's Auto Task Force. It's a car that will bring Cadillac's "big car" in line with the rest of their product in terms of interior/exterior styling, but without alienating their long time loyalists. It's not meant to be a flagship, but rather a more attractive replacement for the DTS/STS until GM is ready to go full-bore into a flagship.

I happen to agree with the strategy. With money tight and public perception still wary, trying to make a true A8/S-Class/7 Series competitor right now would be a disaster, and we'd end up with another half baked attempt. Cadillac sales are improving, as are the Consumer Reports and JD Power scores. Sell the XTS for a few years, let the IPO happen and get the whole 'Government Motors" thing behind you. When you have the proper budget and public perception, then you build a proper $70,000 flagship.

Stingroo
04-20-10, 11:50 AM
^ Bingo.

The Tony Show -- coming to a cable network near you.

DopeStar 156
04-20-10, 11:54 AM
Now we wait and watch the monster get back to it's feet.....

billc83
04-20-10, 12:00 PM
It's good news for GM, if they actually go through with this. It should increase public perception very much.

I'm a bit concerned for the time when GM goes public. The last bondholders got the shaft in the bankruptcy proceedings. Knowing that, who'd be willing to buy stock in GM knowing there is precedent and they could very well get shafted if things go awry?

The Tony Show
04-20-10, 12:42 PM
It's doubtful that the tangled mess of over-extension and brand prostitution that led to the collapse of GM (and near collapse of Ford) will happen again. All of the Detroit 3 operated with a tiny margin of cash in-house, similar to someone living paycheck to paycheck. When the housing and consumer credit markets dried up and people stopped buying, the cash stopped coming in and they didn't have any reserves to fall back on as a result of their brand shopping sprees and rapid expansion.

Both companies have their eye squarely back on a focused product line, so chances are it will be a long time- if ever- before something like this happens again.

ben.gators
04-20-10, 04:03 PM
the best news of the day for me! Folks in GM are doing great job to re-stand on their foot again after all those crises, and all the tax payers money is back. We need GM in top condition. And since this story is going to finish in good condition I need to give some credit to government because of their appropriate support.

V-Eight
04-20-10, 07:04 PM
Woo hoo! Go GM!

Destroyer
04-20-10, 10:21 PM
So no more of this "Obama motors" crap I keep hearing? :confused: I hope the General can stay focused this time.

Kick94sts
04-20-10, 11:06 PM
Yay! I hate over hearing people say they won't buy GM product just because it had to be saved by the gov't.

RightTurn
04-21-10, 01:39 AM
Yay! I hate over hearing people say they won't buy GM product just because it had to be saved by the gov't.

We don't want those morons driving GM products anyhow. :alchi:

ewill3rd
04-21-10, 07:59 AM
GM could have done the bankruptcy without having to take a government handout, it was just easier so they did it.
I am tired of the government motors crap anyway. I consider the IQ of the person spouting it usually and then realize that it isn't reasonable to be angry with special needs people. :lol:

The whole bailout thing was a way to protect the UAW, a huge mistake if you ask me.
Of course no one did so....

I'll be glad when Uncle Sam gets his fingers out of the automotive business.

Make no mistake though, recent changes in CAFE standards will have consequences of its own which will likely kill the performance car market.
There is no mistaking the after effects of government intervention and regulation on private industry.

I should probably stop there.

I~LUV~Caddys8792
04-21-10, 08:39 AM
Yay! I hate over hearing people say they won't buy GM product just because it had to be saved by the gov't.

I'd laugh if those people drove Chryslers, considering the fact that they've been saved by the government twice now. :lol:

The Tony Show
04-21-10, 12:33 PM
So no more of this "Obama motors" crap I keep hearing? :confused: I hope the General can stay focused this time.

Not yet. The Government loaned GM $50B, and roughly $43B of that was converted from cash into a 60% ownership stake in the "New GM". This repayment is for the cash (non-equity) portion of the loans, plus interest. The Government still owns 60% of GM, so we won't hear the end of the jokes just yet.

Once GM has an Initial Public Offering and begins trading their stock again, the plan is for the Government to sell their shares of the company to recoup the rest of the loans. If the trading prices are good enough, they could get it all back, plus make a profit.

None of this means I agree with how it's been handled or how it happened, but that's all academic at this point. The important thing is that this is a big step toward GM being a publicly owned company again, and the sooner that happens, the better.

Jesda
04-21-10, 03:58 PM
I'd prefer if GM went out of business and sold its assets to healthier companies with more responsible management.

I~LUV~Caddys8792
04-21-10, 07:25 PM
I'd prefer if GM went out of business and sold its assets to healthier companies with more responsible management.

That's my dilemma too. At the heart I'm a true capitalist, laissez faire, hands off, etc etc, dog eat dog world, etc etc. So in that sense, I would have liked to see GM fail, because all the years of bad management which trickled down to boring, undesirable products, but I'd hate to see GM up and gone...they're my favorite company out there!

gdwriter
04-21-10, 08:42 PM
That's my dilemma too. At the heart I'm a true capitalist, laissez faire, hands off, etc etc, dog eat dog world, etc etc. So in that sense, I would have liked to see GM fail, because all the years of bad management which trickled down to boring, undesirable products, but I'd hate to see GM up and gone...they're my favorite company out there!The problem with letting them fail is it would put a hell of a lot of people out of work who had nothing to do with all of the management blunders. That includes a lot of the talented designers and engineers behind the much-better cars GM is making now.

I would have liked to see a new GM board of directors, since the old one was pretty much useless. And while there are plenty of incompetent executives in the company, there are also talented people like Mark Reuss who are doing their damndest to bring GM back.

I~LUV~Caddys8792
04-21-10, 09:03 PM
Right, there in lies the problem.

77CDV
04-21-10, 11:30 PM
GM would have likely survived Chap. 11 without government intervention, but the intervention made the whole process much faster and smoother. It also forced GM to make the hard decisions everyone knew had to be made but corporate inertia had heretofore prevented.

orconn
04-22-10, 12:03 AM
While I am happy to see GM excellerating its' debt payment, I think they could have used a better ad spokesman than old fart Whittaker in their first ad following this payment.

hueterm
04-22-10, 08:59 AM
How about Tiger? ;-)

evois
04-22-10, 11:54 AM
hooray GM!

http://www.gmreinvention.com/index.php/site/progress_reports/gm_pays_back_government_loans_in_full1/

Jesda
04-22-10, 01:05 PM
The problem with letting them fail is it would put a hell of a lot of people out of work who had nothing to do with all of the management blunders. That includes a lot of the talented designers and engineers behind the much-better cars GM is making now.

I would have liked to see a new GM board of directors, since the old one was pretty much useless. And while there are plenty of incompetent executives in the company, there are also talented people like Mark Reuss who are doing their damndest to bring GM back.

If you take away the consequences of doing harm to stakeholders, management and labor will never learn the problems with the choices they made.

Its like playing XBox and using your Continues over and over. In reality, those continues are expensive.

928S
04-22-10, 02:21 PM
I'd prefer if GM went out of business and sold its assets to healthier companies with more responsible management.


The whole bailout thing was a way to protect the UAW, a huge mistake if you ask me.

I agree.


The problem with letting them fail is it would put a hell of a lot of people out of work who had nothing to do with all of the management blunders.

That's the same argument made by employees of failed Wall Street investment banks and insurance companies. In essence, they successfully claimed that U.S. taxpayers were obligated to guarantee their continued employment, wages, and bonus even though their chosen employer was de facto bankrupt. No personal responsibility for one's professional and financial circumstances. Just screw the anonymous taxpayers.

BTW, GM does have a new post-bankruptcy board of directors: http://www.gm.com/corporate/about/board.jsp (http://www.gm.com/corporate/about/board.jsp)


Once GM has an Initial Public Offering and begins trading their stock again, the plan is for the Government to sell their shares of the company to recoup the rest of the loans. If the trading prices are good enough, they could get it all back, plus make a profit.

Yeah, let's see...

$50B U.S. taxpayer bailout
$6.8B Term loan repaid
$2.2B Preferred stock (appx)
$41B Balance
60% U.S. Govt. ownership = $68.3B net total market capitalization required to fully repay remaining principal balance of U.S. Govt. bailout from common stock IPO proceeds.

Comparison: GM $68.3B / Ford Motor Co. current mkt cap $46.5B = 1.47. So, is new GM worth 47% more than rival Ford ???

orconn
04-22-10, 04:01 PM
How about Tiger? ;-)

Well, I quess we now know you can pick up expensive tarts in a Buick! No need for a Cadillac .... also a blow to Mercedes' cache!

Jesda
04-23-10, 05:52 PM
Apparently the loan was paid back using a different line of credit from TARP. Net cash did not change.

Furking lies.

928S
04-24-10, 05:48 AM
U.S. Senator Charles Grassley slams the Obama Administration and GM
for their disingenuous smoke-and-mirrors "loan repayment" PR stunt:

http://www.foxnews.com/politics/senate/ci.Grassley+Slams+GM%2C+Administration+Over+Loans+ Repaid+With+Bailout+Money.opinionPrint

orconn
04-24-10, 01:17 PM
Apparently, the Obama Administration and some of our other elected Democrats believe you can fool all the people all the time! The only thing about this administration that sets a new standard for transparency is the poor quality of the subterfuge!

928S
04-24-10, 02:02 PM
For anyone who hasn't seen it, here's General Motors Chrmn-CEO Ed Whitacre's televised commercial. The carefully worded opening 25-seconds of the upbeat 1-minute ad appears to be a blatant attempt to deceive unwary taxpayers and potential GM vehicle buyers. That's certainly not something that, in Mr Whitacre's words, "all Americans can be proud of again."
 

http://www.youtube.com/watch?v=SSNPFVLIWjI

gary88
04-24-10, 03:23 PM
So they took money from one pocket and put it in the other? Great.

http://img293.imageshack.us/img293/8185/81956950.jpg

Jesda
04-24-10, 03:59 PM
Get visa bill
pay with mastercard
thereifixedit.com

77CDV
04-25-10, 12:21 AM
In the business world, we call this revolving credit.

The Tony Show
04-26-10, 09:27 AM
Sounds to me like they had a chunk of money from TARP sitting there that they could draw on if necessary for operations. Since it wasn't needed, they gave it back. Perhaps it isn't the dream scenario, but it sure beats things going so badly that they needed to continue using TARP funds to run the company, no?

No matter how you slice it, GM had $6.7B in their possession that they gave back to the Treasury. At the end of the day, that's a good thing.

928S
04-26-10, 12:39 PM
No matter how you slice it, GM had $6.7B in their possession that they gave back to the Treasury. At the end of the day, that's a good thing.

The $6.7B was actually held in a U.S. Treasury escrow account and the Obama Administration had to explicitly pre-approve disbursement. The escrow account was scheduled to expire June 2010 with unused remaining balances reverting to the U.S. Tsy. As Senator Grassley said, neither party acknowledged the true circumstances of the so-called "repayment" in their speeches, press releases, and television commercials. It appears to have been an outright gift to GM from unwitting U.S. taxpayers. The net effect is that $6.7B of GM debt was forgiven, while U.S. Tsy equity ownership of GM (60.8%) did not increase one iota.

The Tony Show
04-26-10, 12:55 PM
Key word being "unused balances". That dollar amount was included in the total of how much money GM was loaned, they didn't use it, and now the Government has it back. That particular money could have been tapped by GM to fund operations, and if they had, they'd have been able to wait to repay it until 2015. Yes they're being creative with the terminology- it's really more "giving back part they didn't need" than "repaying", but it's still nice to see that they didn't need it.

I'm not defending the bailouts or anything- I'm just saying that was money earmarked for GM to use, and they didn't, so it got returned. I'm no Obama fan either, but you have to remember that Chuck Grassley is making political hay by trying to nitpick exactly where the money came from. Anyone who thinks GM has generated $6.7B in cash since December is an idiot.

orconn
04-26-10, 01:32 PM
Oh, baloney! This was a deliberate attempt to deceive the public through misrepresentation of a transaction! If one listens to GM's ad one believes GM payed of their government bailout early, nuf said. About as self servingly disingenuous as Donald Trump's putting up 2% of partnership money for a building and then tellimg everyone he owns it!

928S
04-26-10, 02:26 PM
Okay, according to what I've read from various sources this morning, the reported $6.7B term loan "repayment" lifted all escrow restrictions. GM can now transfer a remaining escrow account balance of ~$5B cash onto its balance sheet. So, yes, the escrow account was included in calculating U.S.Tsy equity ownership of GM.

In my opinion, the Obama Admn and General Motors could have gained the same PR boost last Wednesday and much greater enduring credibility if they had just candidly disclosed the whole truth about the "repayment." But, instead, they apparently believe that car-buying taxpayers are "idiots."


Oh, baloney! This was a deliberate attempt to deceive the public through misrepresentation of a transaction! If one listens to GM's ad one believes GM payed of their government bailout early, nuf said. About as self servingly disingenuous as Donald Trump's putting up 2% of partnership money for a building and then tellimg everyone he owns it!

Exactly, well said.

Slithering_Joe
04-26-10, 04:38 PM
So they took money from one pocket and put it in the other?...
Exactly.

http://mcauleysworld.wordpress.com/2010/04/23/general-motors-busted-for-loan-repayment-scam-repayment-made-with-other-bailout-funds/


No victory dance yet....

The Tony Show
04-29-10, 04:08 PM
Oh look:




General Motors didn't use another government loan to pay off the much-celebrated $4.7 billion portion of its federal debt. According to a spokesperson with the Treasury Department cited by Bloomberg, the Detroit-based carmaker properly used funds from an escrow account to do the deed. The funds were available for the automaker to use in the event that it ran across any extraordinary expenses, but since the manufacturer decided it didn't need the money, it paid it back.

So it looks like Grassley's contention that nothing was paid back and it was just a "TARP shuffle" is incorrect. Go figure. Read more if you like at Bloomberg Businessweek (http://www.businessweek.com/news/2010-04-28/gm-properly-used-escrow-to-repay-u-s-treasury-says-update1-.html).

Jesda
04-29-10, 05:18 PM
Its smoke and mirrors. GM is NOT profitable and thats what the advertisements meant to implicitly convey. Its more unethical bullshit from a corporation that should have been liquidated. Now, after ****ing over bondholders, they want an IPO.

The Tony Show
04-29-10, 05:26 PM
Tell me how you really feel. :lol:

I'm against the loans in principle (and hate the way the BK was structured), but wonder what the direct GM job losses (not to mention the ripple effect through the parts suppliers when billions in GM business went on hiatus) would have looked like if a drawn out liquidation had taken place.

All this newest post was meant to show is that they did NOT borrow more money to pay off the loan like some people are claiming. It was already figured into the total amount of the loans, which has now decreased. Regardless of our feelings on the rest of it, this is a good thing.

Rocket88
04-30-10, 12:39 PM
No lies.
No BS.

At the end of the day, GM owed Billions less than they did at the start. As of today, GM has no LOANS outstanding with the US, Canadian and Ontario governments. All true.

They used the proceeds of the 61% of the company that the government ended up with to pay the loans.

To use the credit card example from earlier, what actually happened was:

You owed $6000 to Visa.
You sold 61% of your house for $43000. (simplified for this discussion)
You used the proceeds of that sale to pay off the Visa bill.

End result - You have no loans

928S
04-30-10, 02:38 PM
Indeed, the loan repayment transaction was legit.

But the truth about its source of funds came only after-the-fact from secondary media and online blogs; not from the official Obama Admn & GM misleading-by-omission-and-insinuation speeches, press releases, and TV commercials. Sleazy stuff, in my opinion.

Regarding the U.S.Treasury's 61% equity ownership, just remember that GM's pending IPO will need to raise a whopping $68B from private investors to repay in full the remaining balance of $41B taxpayer funds. And even at its all-time high, old GM's market capitalization was only about $56B - a $7B net shortfall. Good luck, U.S. taxpayers!

Jesda
04-30-10, 03:42 PM
http://z.about.com/d/politicalhumor/1/0/E/8/baghdadbob.jpg

EVERYTHING IS JUST FINE

The Tony Show
04-30-10, 05:15 PM
lolz

Stingroo
04-30-10, 05:20 PM
http://media.yayart.com/media/art/generated/2422_570x570.jpg

Jesda
05-02-10, 06:38 PM
YouTube- How The Hell Did GM Pay Back Its Loans "in Full And Ahead of Schedule"? Well, It Didn't.