[jeremyc74]

Originally Posted by Guibo

That depends on what the escrow account was designed for. If it was for emergency measures or for investing in capital equipment or new technologies that would help the company in the long run, I think that's what it should have been spent on. How about investing it in electric car infrastructure? Or investing more to promote automotive technologies in science and engineering in educational institutions?
Even if it was a free spending account ("free" as in they can do whatever they want with it, not "free" as in it came out of thin air), then Whitacre should have been transparent to convey that in his message. The message was that GM paid back the loan in full and that the US taxpayer got back what they put in, regardless of the stock/equity issue. The reality seems that that is billions of dollars we won't see coming back.

Oh come on now! Try to be a LITTLE bit realistic here! The things you're talking about are VERY long term, and if GM had spent this money on promotiing educational institutions or other far reaching things with no near term benefit, it wouldn't survive long enough to see them through.

And I'm also going to take issue with your comment about eletric cars. GM is one of the very few manufacturers with a reasonably priced electric vehicle to be offered to the general public in the very near future. What exactly is this "infrastructure" you're talking about? You expect them to build the cars and then build charging stations everywhere as well?

This money was used for NEAR TERM survival, and to make improvements that would have immediate effects on the companies ability to continue to operate.

You want to talk about the taxpayers losing a few billions of dollars on GM? Lets talk about the tens of billions they would have lost if GM had been allowed to be wiped out. It would take decades to recover the kind of high paying jobs that would have just vanished, there would have been billions spent on unemployment and job creation, and billions more spent on health care for all the people who's plans were gone. That's not even getting into the effects on the states with major automotive suppliers and their economies.

And then lets talk about the money the taxpayers lost bailing out the banks. GM was a small drop in a VERY large bucket when compared to the overall bailout, and was one of the few things that was done that had immediate benefit to the average working class person.

If you've got an issue with bailouts, you'd do well to look at Wall St for abuse before you start in on Detroit.

[Guibo]

Originally Posted by jeremyc74

Oh come on now! Try to be a LITTLE bit realistic here! The things you're talking about are VERY long term, and if GM had spent this money on promotiing educational institutions or other far reaching things with no near term benefit, it wouldn't survive long enough to see them through.

And I'm also going to take issue with your comment about eletric cars. GM is one of the very few manufacturers with a reasonably priced electric vehicle to be offered to the general public in the very near future. What exactly is this "infrastructure" you're talking about? You expect them to build the cars and then build charging stations everywhere as well?

This money was used for NEAR TERM survival, and to make improvements that would have immediate effects on the companies ability to continue to operate.

You want to talk about the taxpayers losing a few billions of dollars on GM? Lets talk about the tens of billions they would have lost if GM had been allowed to be wiped out. It would take decades to recover the kind of high paying jobs that would have just vanished, there would have been billions spent on unemployment and job creation, and billions more spent on health care for all the people who's plans were gone. That's not even getting into the effects on the states with major automotive suppliers and their economies.

And then lets talk about the money the taxpayers lost bailing out the banks. GM was a small drop in a VERY large bucket when compared to the overall bailout, and was one of the few things that was done that had immediate benefit to the average working class person.

If you've got an issue with bailouts, you'd do well to look at Wall St for abuse before you start in on Detroit.

You need to chill out. I never said I was against the GM bailout. I was for it. You're barking up the wrong tree, so please stop with the knee-jerk reactionary tirades highlighted with CAPITAL words. All I'm asking for is a little transparency.

And where did I say they would build the electric car infrastructure? I said invest in it. That could mean working with municipalities and other corporations to develop a viable charging system network. Quite the opposite of what GM had done in the past, if you want to open up that can of worms.

When you say "This money was used for NEAR TERM survival, and to make improvements that would have immediate effects on the companies ability to continue to operate," are you talking about the loan money or the money in the escrow account?

[blue2fire]

Originally Posted by Guibo

That depends on what the escrow account was designed for. If it was for emergency measures or for investing in capital equipment or new technologies that would help the company in the long run, I think that's what it should have been spent on. How about investing it in electric car infrastructure? Or investing more to promote automotive technologies in science and engineering in educational institutions?

They say the account was for contingencies and there was a long standing agreement to return the money to the Canadian Government and the Treasury (where it was from) if it was felt they didnt need it. GM made a huge noise of something that was in essense decided a while ago.......

[majin ssj eric]

I love how Quagmire assumes the government will EVER sell off its share in GM. Why on earth would Obama and company do that when they essentially have nationalized 2/3 of the US auto industy (something socialists have wanted to do for years)??? This is Government Motors we're talking about. Washington's not letting free enterprise come back in and ruin it for them!

[quagmire]

Originally Posted by majin ssj eric

I love how Quagmire assumes the government will EVER sell off its share in GM. Why on earth would Obama and company do that when they essentially have nationalized 2/3 of the US auto industy (something socialists have wanted to do for years)??? This is Government Motors we're talking about. Washington's not letting free enterprise come back in and ruin it for them!

I love how you assume Obama is a socialist. Think Nixon is a socialist for creating Amtrak?

[jeremyc74]

Originally Posted by Guibo

You need to chill out. I never said I was against the GM bailout. I was for it. You're barking up the wrong tree, so please stop with the knee-jerk reactionary tirades highlighted with CAPITAL words. All I'm asking for is a little transparency.

There's just as much transparency as there is with any other publically traded company. Just because you've got stock in a company doesn't mean you get to micromanage it, which is exactly what you're talking about here, and if you're going to get bent out of shape about me putting a little EMPHASIS on certain points, stay off public forums. Your posts shows a completely lack of understanding of the realities of the auto industry. Electric cars won't see mass market acceptance for at least another 5 years, and it won't be profitable to any significant degree for a while after that without government incentives. What GM needed to do was exactly what they've done...sell mainstream models without throwing cash on the hood of every one of them.

Originally Posted by Guibo

And where did I say they would build the electric car infrastructure? I said invest in it. That could mean working with municipalities and other corporations to develop a viable charging system network. Quite the opposite of what GM had done in the past, if you want to open up that can of worms.

That's not their job. Their job is the build the cars. The rest of the market will figure out how to charge them. It would be a complete waste of time for GM to invest a single dime into something like that.

Originally Posted by Guibo

When you say "This money was used for NEAR TERM survival, and to make improvements that would have immediate effects on the companies ability to continue to operate," are you talking about the loan money or the money in the escrow account?

Both! You don't make 10 year plans for a company that may not exist in 10 months. GM had a mandate from its biggest shareholder (the taxpayers) to get back to being a self sustainable business as quickly as possible, and that's exactly what they've done.

[quagmire]

Originally Posted by jeremyc74

Both! You don't make 10 year plans for a company that may not exist in 10 months. GM had a mandate from its biggest shareholder (the taxpayers) to get back to being a self sustainable business as quickly as possible, and that's exactly what they've done. Electric cars won't see mass market acceptance for at least another 5 years, and it won't be profitable to any significant degree for a while after that without government incentives.

When they do get stable, they better make a long term plan though. That is something American businesses in general need to do. For too long American businesses go by quarter by quarter or year by year. GM needs to plan for 10 years so they don't get caught with their pants down like they did when the SUV and truck fad went bust.

[jeremyc74]

Originally Posted by quagmire

When they do get stable, they better make a long term plan though. That is something American businesses in general need to do. For too long American businesses go by quarter by quarter or year by year. GM needs to plan for 10 years so they don't get caught with their pants down like they did when the SUV and truck fad went bust.

I agree completely. If they'd had a more robust lineup in the small car segment, they would have been in much better shape.

Of course, it took a full blown disaster to wake the UAW up and get them to give some ground, but that's a different debate. There was plenty of blame to go around for GM's problems, and we should all hope lessons have been learned.

[Guibo]

Originally Posted by jeremyc74

There's just as much transparency as there is with any other publically traded company.
Your posts shows a completely lack of understanding of the realities of the auto industry.

Wow, so the deception by GM is justified because other publicly traded companies do the same? Right. How many other auto companies receiving bailout money have made similar commercials?
I'm sure GM's predicament is a result of their astute understanding of the realities of the auto industry.

Originally Posted by jeremyc74

That's not their job. Their job is the build the cars. The rest of the market will figure out how to charge them.

It's part of their job and that's what they've already been doing. But only after the two recent fuel price increases when their thirstly fleet lay languishing. The work isn't yet done.
Your myopic lack of vision is the kind that helped get GM in the position they are now: Look no further than beyond the front steps. Guess what, if they have a better infrastructure, they sell more cars. Even GM know this, even if you can't grasp this concept.

Originally Posted by jeremyc74

Both! You don't make 10 year plans for a company that may not exist in 10 months. GM had a mandate from its biggest shareholder (the taxpayers) to get back to being a self sustainable business as quickly as possible, and that's exactly what they've done.

They are self-sustainable...so why don't they return the rest of the money that's in the escrow? After all, they don't need it, right? Yet they are applying for a further $14.4B loan from the DOE. The escrow account was for the possibility that sales would worsen or other problems that might come up. Was it really for "repaying" the loan?
Either way, there's ~$6.7B that the taxpayers won't see back. All we'll get back is the interest.

[jeremyc74]

Originally Posted by Guibo

Wow, so the deception by GM is justified because other publicly traded companies do the same? Right. How many other auto companies receiving bailout money have made similar commercials?
I'm sure GM's predicament is a result of their astute understanding of the realities of the auto industry.


It's part of their job and that's what they've already been doing. But only after the two recent fuel price increases when their thirstly fleet lay languishing. The work isn't yet done.
Your myopic lack of vision is the kind that helped get GM in the position they are now: Look no further than beyond the front steps. Guess what, if they have a better infrastructure, they sell more cars. Even GM know this, even if you can't grasp this concept.
.

GM's issues were from management relying too much on SUVs and completely neglecting smaller cars, as well as not taking a hard stance against union demands.

You can't execute a vision when you're BROKE. This money was needed to put them back on a sustainable path.

WTF is this "electric car infrastucture" that you keep harping on? There are oulets and electricity EVERYWHERE! The infrastructure is already that. That's one of the things that's so damn attractive about it.

Or are you suggesting GM get into the power plant business with the money they have to operate an automotive manufacturing operation?

Originally Posted by Guibo

They are self-sustainable...so why don't they return the rest of the money that's in the escrow? After all, they don't need it, right? Yet they are applying for a further $14.4B loan from the DOE. The escrow account was for the possibility that sales would worsen or other problems that might come up. Was it really for "repaying" the loan?
Either way, there's ~$6.7B that the taxpayers won't see back. All we'll get back is the interest.

Why would they return the money? It's THEIRS. That's what happens when someone buys stock in a company. The company gets the money to use HOWEVER THEY SEE FIT, and you get the stock. This isn't a difficult concept. The government is free to sell that stock whenever it suits them.

Now, post a source for the DOE money, and lets see the actual terms involved.

[blue2fire]

Originally Posted by jeremyc74

Both! You don't make 10 year plans for a company that may not exist in 10 months. GM had a mandate from its biggest shareholder (the taxpayers) to get back to being a self sustainable business as quickly as possible, and that's exactly what they've done.

I love how some people jump up and down saying they've created a self sustainable business after one quarter. That must be like Hitler saying the war was won after he'd annexed France.

[quagmire]

Originally Posted by jeremyc74

Why would they return the money? It's THEIRS. That's what happens when someone buys stock in a company. The company gets the money to use HOWEVER THEY SEE FIT, and you get the stock. This isn't a difficult concept. The government is free to sell that stock whenever it suits them.

Just nitpick here, the government didn't technically buy stock in GM. General Motors Company is a new government started private business that bought the good assets from General Motors Corporation.

[jeremyc74]

Originally Posted by blue2fire

I love how some people jump up and down saying they've created a self sustainable business after one quarter. That must be like Hitler saying the war was won after he'd annexed France.

Are they loosing money on a daily basis?

Is there money being poured in from the outside to keep them afloat?

Are their operating expenses being paid?

If they're not self sustainable right now, please tell me where the money's coming in from. No matter how you look at it, they're moving in the right direction (which is exactly what I said in the first place). I love how some people are so biased agains them that they can't admit that.

http://www.bloggingstocks.com/2010/0...-public-again/

Originally Posted by quagmire

Just nitpick here, the government didn't technically buy stock in GM. General Motors Company is a new government started private business that bought the good assets from General Motors Corporation.

Ok, but the GM got the money in exchange for a 60% stake in the company. No matter how you look at it, the money belongs to the Company at this point.

[quagmire]

Originally Posted by jeremyc74

Ok, but the GM got the money in exchange for a 60% stake in the company. No matter how you look at it, the money belongs to the Company at this point.

And I agree. I was just nitpicking. Though I do believe they need to be responsible with that money considering it is taxpayer money and they will be scrutinized just like Wall Street has.

[jeremyc74]

Originally Posted by quagmire

And I agree. I was just nitpicking. Though I do believe they need to be responsible with that money considering it is taxpayer money and they will be scrutinized just like Wall Street has.

You're missing the whole point. It is not taxpayer money anymore. It is GM's money. The taxpayers own a stake in GM, they don't own the money in its bank accounts.

The taxpayers will very likely turn a profit on their investment when GM goes public over the next 12-18 months.

After the company reported its first profit in nearly three years on Monday, numerous estimates were published by analysts that put the valuation between $64 billion and $90 billion.

"The prospects of repayment look brighter," said Larry Summers, director of the National Economic Council, in remarks Tuesday. "There is a real prospect of [Treasury] recovering most if not all of its investment in General Motors."

Investors who buy and sell the bonds issued by GM before its bankruptcy seem to agree. They are also betting on GM being worth enough to pay off taxpayers.

The holders of those bonds are due to receive stock in GM after its initial public offering. So the value of the bonds is tied directly to the expected stock price following an IPO, which some experts think could take place as soon as the end of this year.

Many of those bonds are trading at roughly 35 cents on the dollar. That translates into an eventual market value of $66 billion for GM, according to Kirk Ludtke, senior vice president of CRT Capital Group, an investment firm that has been tracking the value of GM's debt.
Ludtke reaffirmed his "buy" rating on GM's bonds Tuesday, saying he thinks they'll eventually fetch between 40 cents and 43 cents on the dollar. At that level, the value of GM's stock would be worth about $75 billion to $78 billion. Other analysts are also becoming more bullish.
Eric Selle, credit research analyst with JPMorgan Chase, said in a note to clients Monday that he was raising his estimated value of GM bonds due to GM's "solid first quarter." He now puts the market value of GM shares at about $90 billion.

Still, if GM shares were to fetch even $75 billion on the open market, they would be worth nearly double the current market value of successful rival Ford Motor (F, Fortune 500). At first blush, that seems wildly optimistic.
Ford, which posted a much bigger profit than GM in the first quarter and has been gaining U.S. market share, is worth only $38.9 billion.But experts say it's wrong to assume Ford is more valuable.
"GM should be worth more than Ford," said Rod Lache, equity analyst with Deutsche Bank, who estimates GM should be worth about $64 billion.
GM is in a much better position overseas, particularly in China, the fastest growing market for auto sales. Lache added that GM also has profitable stakes in joint ventures in China.

http://money.cnn.com/2010/05/18/news...nies/gm_value/

[ChrisV]

Originally Posted by Guibo

And where did I say they would build the electric car infrastructure? I said invest in it. That could mean working with municipalities and other corporations to develop a viable charging system network.

Do you think Ford or Mercedes or Oldsmobile or Whippet or Locomobile or any of the turn of the 20th century automakers put much investment in the gasoline delivery and road building infrastructure? Your position is patently ridiculous when compared to the early car industry itself. It's like those short sighted people that back in 1900 would have said "those damn automobiles are stupid because I don't have a gas station near me yet, and it may take years for one to be built. There's no infrastructure in place for them! We should stick with horses 'cause you can feed them on any meadow around."

[ChrisV]

Originally Posted by blue2fire

I love how some people jump up and down saying they've created a self sustainable business after one quarter. That must be like Hitler saying the war was won after he'd annexed France.

Wow. Took 33 posts to get to Godwin's law.

[quagmire]

Originally Posted by jeremyc74

You're missing the whole point. It is not taxpayer money anymore. It is GM's money. The taxpayers own a stake in GM, they don't own the money in its bank accounts.

The taxpayers will very likely turn a profit on their investment when GM goes public over the next 12-18 months.



http://money.cnn.com/2010/05/18/news...nies/gm_value/

I know that it's GM's money. But, it doesn't mean that the media, politicians, and the out of the loop Americans who don't know crap on what happened in this deal won't jump on anything they perceive as bad as the source of GM's money is the taxpayers. So while they are free to spend it on whatever they want( ie: repaying the loans), it would be a good thing if they were responsible or at least didn't brag about a lot of things that could be spun as a political talking point by the opposite party like this ad has become.

I agree with what you're saying. Just stating that GM does need to be careful, because a half-truth could be spun as truth by the media and politicians easily and the American public will eat it all up.

[Guibo]

Originally Posted by jeremyc74

WTF is this "electric car infrastucture" that you keep harping on? There are oulets and electricity EVERYWHERE! The infrastructure is already that. That's one of the things that's so damn attractive about it.

Wow, you think you can just plug any electric car's battery to any outlet and have it charge at optimum performance? The whole point of the charging stations is so you don't have to leave the freakin' car there overnight. The availability of outlets at businesses and other public areas is currently woefully inadequate.
Here you go (and this is for you too, ChrisV):
http://news.cnet.com/8301-11128_3-9996348-54.html
Here's hydrogen:
http://green.autoblog.com/2010/05/11...ucture-in-haw/

For you guys to claim that it's not in GM's interest to invest in the infrastructure and therefore they don't is ludicrous. They have already begun, because it is in their interest to make these cars more attractive to a wider audience, and that means an infrastructure which provides convenient, quick access to power. It's incredible that you guys are even debating this.

Originally Posted by jeremyc74

Why would they return the money? It's THEIRS. That's what happens when someone buys stock in a company.

I'm not talking about stock. I'm talking about the money that was in the escrow account set up by the government in the event that they needed it (through poor sales, a souring economy, etc). The agreement appears to be that they would return that money (again, I repeat as you seem to hard of reading: I'm not talking about the stock) if they didn't need it.

Originally Posted by jeremyc74

Now, post a source for the DOE money, and lets see the actual terms involved.

Here you go (now pay close attention to the opening sentence):
"May 14, 2010

Washington -- Federal officials say General Motors Co. and Chrysler Group LLC face no major hurdles in winning billions of dollars in low-cost government loans to retool factories.
A decision on the loans is expected soon, said Matt Rogers, a senior adviser to the Energy Department. The department has been 'engaged' with teams from both automakers to review their requests, he said."
http://detnews.com/article/20100514/AUTO01/5140346/1148/Chrysler--GM-in-line-for-fed-loans#ixzz0oW5ej7Xb

And how is it that they face no major hurdles? Many theorize it's because they've "repaid" their loan 5 years in advance (coincidence?) using the money in the above mentioned escrow account. And the DOE loan carries a 5% interest rate compared to the 7% interest rate of the TARP loan (9% for loans on upaid union benefits). If GM hadn't "repaid" the $6.7B, it would be tougher for them to qualify for this low loan rate, if at all.

If you think everything was done 100% above board, why do you suppose Whitacre didn't mention how the loan was repaid in his ad? Anyone watching would naturally assume that they repaid the loan the normal way: through improved profits from their business. Not by dipping into another taxpayer-funded account.

[quagmire]

Which is probably why they should have waited until Monday to tout the loan repayment when they announced their Q1 profit. I am not saying it would have changed anything, but it may have helped.

Oh well, I am mixed on doing the ad, but still don't have a problem with using the money they had to spend( escrow or not) to repay the loans.

[jeremyc74]

Originally Posted by Guibo

Wow, you think you can just plug any electric car's battery to any outlet and have it charge at optimum performance? The whole point of the charging stations is so you don't have to leave the freakin' car there overnight.

I'm an EE who works in automotive manufacturing. Please don't tell me you want to go down this road. I know more about charging an electric car than you want to know. Trust me on this.

Quick charge stations don't do any good at all with current battery technology. You can only charge them so fast, and a 220V source is plenty for that.

As I said earlier, the entire program is a VERY long term proposition, and the notion that they should have taken bailout money to fund it while they could barely keep the lights on in their existing facilities is laughable. The Volt program is more about public opinion than making money, for the time being.

I'm not talking about stock. I'm talking about the money that was in the escrow account set up by the government in the event that they needed it (through poor sales, a souring economy, etc). The agreement appears to be that they would return that money (again, I repeat as you seem to hard of reading: I'm not talking about the stock) if they didn't need it.

The escrow account IS FROM THE GOVERNMENT BUYING A 60% STAKE.
Damn how many times does it have to be posted and reposted for this to sink in.

They LOANED GM 8 Billion, which has been paid back, and the rest of the money was in exchange for EQUITY in the company, which the government still owns and is free to do whatever it wants with. The money recieved from the purchase of that equity belongs to GM and they can do whatever the hell they want to with it. In this situation they don't need it to cover operating costs because they're back in the black, so they used it to repay debt. That's a perfectly resonable thing for a company to do, and the fact that people are questioning it is a absurd.

Here you go (now pay close attention to the opening sentence):
"May 14, 2010

Washington -- Federal officials say General Motors Co. and Chrysler Group LLC face no major hurdles in winning billions of dollars in low-cost government loans to retool factories.
A decision on the loans is expected soon, said Matt Rogers, a senior adviser to the Energy Department. The department has been 'engaged' with teams from both automakers to review their requests, he said."
http://detnews.com/article/20100514/AUTO01/5140346/1148/Chrysler--GM-in-line-for-fed-loans#ixzz0oW5ej7Xb

.

You've got to be joking with that BS. Those loans are available to the entire auto industry. They're from the DOE to promote new technologies. Even Nissan is getting $1.6 billion. That's not bailout money, it's a government grant to further technologies related to the auto industry.

[Guibo]

Originally Posted by jeremyc74

I'm an EE who works in automotive manufacturing. Please don't tell me you want to go down this road. I know more about charging an electric car than you want to know. Trust me on this.

Then you should have known that GM are investing in these infrastructures instead of claiming (erroneously) that it's "not their business" to do so. You were wrong.

Originally Posted by jeremyc74

Quick charge stations don't do any good at all with current battery technology. You can only charge them so fast, and a 220V source is plenty for that.

What makes you think GM aren't investing in future battery technologies?

Originally Posted by jeremyc74

They LOANED GM 8 Billion, which has been paid back, and the rest of the money was in exchange for EQUITY in the company, which the government still owns and is free to do whatever it wants with.

By EQUITY, you are referring to the shares of stock, correct?

Originally Posted by jeremyc74

You've got to be joking with that BS. Those loans are available to the entire auto industry. They're from the DOE to promote new technologies. Even Nissan is getting $1.6 billion. That's not bailout money, it's a government grant to further technologies related to the auto industry.

Relevance? That's right: You have none. The fact that the loans are available to other companies has absolutely zero relevance to the topic at hand. Who here is claiming that is bailout money? Tell me their names, because I haven't seen a single person in this thread who referred to that as bailout money.