As GM shares near record low, taxpayer loss on bailout rises to $35 billion

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  • ELVIS
    Banned
    • Dec 2003
    • 44120

    As GM shares near record low, taxpayer loss on bailout rises to $35 billion

    Investors.com

    Government Motors(GM) shares fell to a fresh 2012 closing low of 19.57 on Monday. The stock hit 19 in mid-December, the lowest since the auto giant came public at $33 in November 2010 following its June 2009 bankruptcy.



    Normally you might say, tough luck investors. But this is Government Motors. The Treasury still owns 26.5% of GM, or 500 million shares. Taxpayers are still out $26.4 billion in direct aid. Shares would have to hit $53 for the government to break even.

    Those shares were worth about $9.8 billion as of Monday. That would leave taxpayers with a loss of $16.6 billion.

    But that's not the full tally. Obama let GM keep $45 billion in past losses to offset future profits. Those are usually wiped out or slashed, along with debts, in bankruptcy. But the administration essentially gifted $45 billion in write-offs (book value $18 billion) to GM. So when GM earned a $7.6 billion profit in 2011 (more on that below), it paid no taxes.

    Include that $18 billion gift, and taxpayers' true loss climbs to nearly $35 billion.

    Of course, there's no chance that the Obama administration will sell off its GM stake before Election Day. That would force Obama to recognize actual losses, which would remind voters that the bailout was a massive transfer from taxpayers to unions.

    Union workers did make sacrifices in bankruptcy, but not nearly enough. GM only narrowed the labor cost gap vs. what Japanese automakers pay their workers. Given that Toyota(TM) still enjoys a price premium over similar GM vehicles, the U.S. auto giant needs a labor cost advantage, not near-parity. And Toyota has relatively high costs. Volkswagen(VLKAY) pays workers at its new Tennessee plant only about half what GM does.

    The Volt hybrid was supposed to provide a green veneer to GM's entire lineup, like the Prius has done for Toyota. Instead, the Volt has been a p.r. disaster following fires and anemic sales that led to a temporary production halt earlier this year.

    GM's market share and profits got an artificial boost in 2011 as Japan's earthquake and Thailand's massive floods wrecked havoc with supply chains for Toyota and other Japanese automakers. But with Toyota back on track and VW and Hyundai aggressively expanding in America, GM is rapidly losing share in 2012.

    Overall U.S. auto sales were strong to start the year, but that momentum has faded along with slowing economic growth and hiring. Falling gas prices also may reduce the incentive to replace aging cars and trucks with higher-mileage vehicles. Automakers release U.S. June vehicle sales on Tuesday.

    And the U.S. currently is the garden spot of Ceti Alpha 6 for auto sales.

    Europe has become a sinkhole. The auto industry faced chronic overcapacity in Europe before the debt crisis erupted because national politics make it very hard to close any money-losing plant in any country. With Italy and Spain on the brink of a meltdown, auto sales in those countries are in freefall.

    Ford(F) last week warned of major losses in Europe and other overseas markets.

    GM has done well in China, now the world's No. 1 auto market, but that economic growth is slowing there too. Meanwhile several big cities, including Beijing and Shanghai, are capping new car registrations to fight massive gridlock.



  • knuckleboner
    Crazy Ass Mofo
    • Jan 2004
    • 2927

    #2
    if only obama had told middle income auto workers to fuck off, then maybe, MAYBE America could be great again...

    Comment

    • Terry
      DIAMOND STATUS
      • Jan 2004
      • 12123

      #3
      Originally posted by knuckleboner
      if only obama had told middle income auto workers to fuck off, then maybe, MAYBE America could be great again...
      Yeah, really.

      I mean, I suppose government could have just turned its collective back on the auto industry along with all the Wall St. financial houses and banking industry in 2008/2009 and let them all go down the tubes or enter into structured bankruptcy, which is what Mr. Romney seems to advocate.

      In some ways, I can see validity to the position that in a capitalist system every company has to be free to fail.

      However, the auto bailout saved jobs. Was it a measure that is just forestalling the inevitable? Perhaps. Goes back to the Wall St. vs. Main St. tug-of-war, and the possible consequences of letting ALL of it go down the tubes with nothing so much as a lifeline...
      Scramby eggs and bacon.

      Comment

      • ELVIS
        Banned
        • Dec 2003
        • 44120

        #4
        The fucking government is not there to bail out jobs...

        Lifeline ??

        Comment

        • Terry
          DIAMOND STATUS
          • Jan 2004
          • 12123

          #5
          Originally posted by ELVIS
          The fucking government is not there to bail out jobs...

          Lifeline ??
          So it would have been better to let GM and the other auto manufacturers crash and burn, let another 1 million + people go on unemployment and let all the other industries connected with servicing them just take a massive hit to their bottom line (potentially causing more layoffs in related industries)...

          ...is that something you're comfortable with?
          Scramby eggs and bacon.

          Comment

          • ELVIS
            Banned
            • Dec 2003
            • 44120

            #6
            They would have went through a proper bankruptcy and financial restructure...

            Where did you get this crash and burn bullshit, Obama ??

            Comment

            • jhale667
              DIAMOND STATUS
              • Aug 2004
              • 20929

              #7
              Where did you get there was anyone else to provide the finances to restructure?
              Originally posted by conmee
              If anyone even thinks about deleting the Muff Thread they are banned.... no questions asked.

              That is all.

              Icon.
              Originally posted by GO-SPURS-GO
              I've seen prominent hypocrite liberal on this site Jhale667


              Originally posted by Isaac R.
              Then it's really true??

              The Muff Thread is really just GONE ???

              OMFG...who in their right mind...???
              Originally posted by eddie78
              I was wrong about you, brother. You're good.

              Comment

              • ELVIS
                Banned
                • Dec 2003
                • 44120

                #8
                Let me spell it out for you...

                F I N A N C I A L R E S T R U C T U R E

                That's how chapter 11 bankruptcy works, dumbass...

                You're a fucking moron...


                Comment

                • jhale667
                  DIAMOND STATUS
                  • Aug 2004
                  • 20929

                  #9
                  Actually you are. No bank was going to provide the $34 billion (80 whatever); it was either the government or they went belly up. Ignorant fucktard.



                  The latest news and headlines from Yahoo News. Get breaking news stories and in-depth coverage with videos and photos.


                  Last edited by jhale667; 07-04-2012, 11:13 PM.
                  Originally posted by conmee
                  If anyone even thinks about deleting the Muff Thread they are banned.... no questions asked.

                  That is all.

                  Icon.
                  Originally posted by GO-SPURS-GO
                  I've seen prominent hypocrite liberal on this site Jhale667


                  Originally posted by Isaac R.
                  Then it's really true??

                  The Muff Thread is really just GONE ???

                  OMFG...who in their right mind...???
                  Originally posted by eddie78
                  I was wrong about you, brother. You're good.

                  Comment

                  • Satan
                    ROTH ARMY ELITE
                    • Jan 2004
                    • 6664

                    #10
                    Originally posted by ELVIS
                    The fucking government is not there to bail out jobs...

                    Lifeline ??
                    This goes way beyond "bailing out jobs".

                    This is a matter of saving one of the few industries left in the US that actually MAKES something, and pays their employees a living wage to do so.

                    And, as Terry said, the impact would be on more than just the GM employees themselves. Just ask anyone in Flint Michigan. One factory closed there and the whole fucking town pretty much died as a result.

                    Where the Hell are all these people supposed to work, WalMart?

                    For 1/5 of the wages, and no benefits??? And how the fuck would the WalMart even stay open, if nobody had any money to spend there??

                    The government, when it functions properly, (as it did from 1933 to 1980) doesn't have to "bail out jobs", because greedy corporate fucks aren't outsourcing them, and there are enough to go around.

                    But in the beginning of that period, FDR did more than protect jobs, he created jobs for many who needed them, ended the Depression as a result, and built some much needed infrastructure in this country as a result (dams, bridges, rural electfrication, etc.)

                    If Obama had done these things (some of us hoped he would, based on his speeches in 2008) he would be reelected in a landslide that put Nixon 72 to shame.
                    Eternally Under the Authority of Satan

                    Originally posted by Sockfucker
                    I've been in several mental institutions but not in Bakersfield.

                    Comment

                    • ELVIS
                      Banned
                      • Dec 2003
                      • 44120

                      #11
                      You people are blind...

                      Comment

                      • BigBadBrian
                        TOASTMASTER GENERAL
                        • Jan 2004
                        • 10625

                        #12
                        GM and Chrysler will eventually go belly up anyway because they are being managed by incompetents. The public will be holding the bag for their debt when they do. If I were a Chrysler or GM worker, I'd be going to night school NOW and training for a new career.
                        “If bullshit was currency, Joe Biden would be a billionaire.” - George W. Bush

                        Comment

                        • Nickdfresh
                          SUPER MODERATOR

                          • Oct 2004
                          • 49565

                          #13
                          Originally posted by BigBadBrian
                          GM and Chrysler will eventually go belly up anyway because they are being managed by incompetents. The public will be holding the bag for their debt when they do. If I were a Chrysler or GM worker, I'd be going to night school NOW and training for a new career.
                          Really dummy? Try to stay out of fortune telling....

                          Automakers record strong performance in June

                          July 4, 2012 at 9:02 AM by AHN ·
                          Nathan Andrada – Fourth Estate Cooperative Contributor

                          New York, NY, United States (4E) – U.S. automakers reported increased sales in June that beat sales figures they posted during the same period last year. Despite the weakening labor market and consumer confidence losing steam, the U.S. auto industry surpassed most analysts’ estimates in June and recorded their best first-half in terms of sales since 2008.

                          Despite concerns of a slowing economy, more people are still going to the showrooms with GM, Ford, and Chrysler sold a combined 601,320 vehicles in June, which is a 14 increase from June 2011. At this rate, U.S. automakers are estimated to sell around 14.4 million vehicles at the end of the year, according to automotive website TrueCar. This estimate is in line with analysts’ expectations.

                          Researcher Autodata Corp., meanwhile, estimated that light-vehicle annual sales will reach 14.1 million, which will make the world’s second-largest auto market on target for its strongest annual sales performance since 2007.

                          GM recorded it highest monthly sales since September 2008 as its sales rose by 16 per cent after selling 248,750 vehicles. Ford, on the other hand, sold 207,759 units with sales jumping by 7 per cent, beating the 194,030 estimate by TrueCar’s analysts. For the first six months of the year, Ford’s F-series pickup trucks was the country’s top selling vehicle. Meanwhile, Chrysler’s June sales was 144,811 vehicles, which is an increase by 20 per cent from the same period in 2011.

                          The positive news in the auto industry boosted auto stocks with GM higher by more than 6 percent and Ford gaining 3 per cent in Tuesday’s trading. It also lifted the markets with Dow Jones Industrial Average closing at 72 points or 0.6 per cent higher, the S&P 500 gaining 9 points or 0.6 per cent, and the Nasdaq jumping by 25 points or 0.8 per cent. U.S. markets was closed on Tuesday afternoon and Wednesday to celebrate the American Independence Day.

                          Article © AHN – All Rights Reserved


                          I HAAATTTTE OBAMMMMAAAAA!!!!!!!!!!!!!!!
                          Last edited by Nickdfresh; 07-05-2012, 09:51 AM.

                          Comment

                          • jhale667
                            DIAMOND STATUS
                            • Aug 2004
                            • 20929

                            #14
                            Originally posted by ELVIS
                            You people are blind...

                            You're the one blinded by your irrational hatred of Obama, bigot.
                            Originally posted by conmee
                            If anyone even thinks about deleting the Muff Thread they are banned.... no questions asked.

                            That is all.

                            Icon.
                            Originally posted by GO-SPURS-GO
                            I've seen prominent hypocrite liberal on this site Jhale667


                            Originally posted by Isaac R.
                            Then it's really true??

                            The Muff Thread is really just GONE ???

                            OMFG...who in their right mind...???
                            Originally posted by eddie78
                            I was wrong about you, brother. You're good.

                            Comment

                            • ELVIS
                              Banned
                              • Dec 2003
                              • 44120

                              #15
                              I don't hate Obama...

                              Comment

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