GM Repaid Government Loan Ahead of Schedule! See what they forgot to mention

GM has come out with a new commercial claiming that they have paid back their government handout and that their company is on the rise. Here is the commercial if you have not seen it. Take a look and then read the truth about how they went about this and why they have not made any progress at all. (sorry you will have to watch the vid on youtube embedding has been disabled)



Sean McAlinden, chief economist at the Ann Arbor-based Center for Automotive Research, points out that the company has applied to the Department of Energy for $10 billion in low (5%) interest loan to retool its plants to meet the government's tougher new CAFÉ (Corporate Average Fuel Economy) standards. However, giving GM more taxpayer money on top of the existing bailout would have been a political disaster for the Obama administration and a PR debacle for the company. Paying back the small bailout loan makes the new--and bigger--DOE loan much more feasible.

In short, GM is using government money to pay back government money to get more government money. And at a 2% lower interest rate at that. This is a nifty scheme to refinance GM's government debt--not pay it back!

GM boasts that, because it is doing so well, it is paying the $6.7 billion five years ahead of schedule since it was not due until 2015. So will there be an accelerated payback of the rest of the $49.6 billion investment? No. That goal has been pushed back, as it turns out.

So GM is paying back tax dollars with tax dollars....to get another 10 billion in tax dollars, at a better rate...

I guess GM does not care where the money comes from...especially when it isn't theirs to begin with....


[edit on 26-4-2010 by TV_Nation]

Of course. GM is dirty like Obama now.
GM is to be shunned by all who care about America.
They are not the GM of the past.
Let them fail.
I would never buy a GM vehicle for any price.
I think they are being used as part of a secret plan to turn that Detroit area into another Kosovo.

reply to post by TV_Nation


I didn't know about the 10 billion dollar loan, but I knew from other sources that they just used TARP money to pay back the govt. loan. Something should tell everybody that a company usually doesn't do something like this. They tend to think practical, why throw that money away that could have been used to do other things. Also did anybody hear about what was the profits that was made at GM this quarter. The reason is that you have to have made enough money in order to pay someone back, unless you didn't make that money and just pulled money from one govt. vehicle to another one so you can get another loan for less interest. We are officially a 3rd world country.

reply to post by TV_Nation


This is the main reason I bought a Ford last year, they didn't take a bailout like GM and Chrysler, they just continued to make good, reliable vehicles that appeal to a large market at a price lower than GM. I have familiy that recently purchased from GM and after taking a good look at their quality its not even close to what Ford has done. It may sound like I'm bias towards Ford but look closely at a new Malibu and a Fusion both are in the same midsize class and the quality of materials between the two are undeniable. GM sucks if they made better vehicles they wouldn't have needed a bailout.

reply to post by TV_Nation


Nice job exposing this scam.

GM paid its loan! Over and over we hear it. Enough already of the lies.

[edit on 26-4-2010 by drew hempel]

reply to post by hoghead cheese

DETROIT--General Motors Co posted a net loss for 2009, but said it was possible to make a profit this year and that it was laying the foundation to return to public ownership. GM reported a $4.3 billion 2009 net loss covering the period from its emergence from bankruptcy in July through the end of the year. The automaker said it was committed to repaying the outstanding balances on its U.S. Treasury and Export Development Canada loans by June "at the latest."

www.foxbusiness.com...

This is the most up to date figure I could find on how GM is doing and as you can see they did not come even close to earning enough profits to pay back their debt.

They are not even sure that they will make a profit in 2010 it is just a possibility.

Thank you so much for this post. I love to see people hold these industries accountable when they're trying to portray themselves as some sort of outstanding pillar of society.

When I first graduated from high school I went to Kettering University in Flint, MI, to study automotive engineering. I was instantly turned off to the whole atmosphere in the automotive industry (not that Flint had a very good atmosphere to begin with).

While in Michigan, I witnessed first-hand the greed of these corporations. We had lectures discussing how the American corporations had fallen behind the likes of Toyota because they were solely concerned wih profits rather than making the best product. I'm over-generalizing a bit because there are other factors like unions, but more-or-less, the American car companies are driven solely by profit. To me that is unethical and it really shows the weakness of capitalism. I do believe that capitalism is the best economic system around right now, but greedy businesses like GM definitely bring out the worst in it. If they want to abandon morals in their pursuit of wealth, then why should we care if they fail?

^^^the unions are the main weapon.

Unions are third party parasites that destroy the host. The worker thinks he is getting a benefit, but eventually the workers work disappears. Unions are weapons.

American infrastructure is under attack. Detroit will be a ghetto open to infiltration by enemy troops. When a Muslim force wants to separate Michigan from the United States then you will know why the Leftist Media hates Michigan militias and loves Obama.

reply to post by Cabaret Voltaire


The problem goes deeper than unions. The real parasite is human greed. Greed by the company owners led to the creation of the unions, and the greed of the unions has destroyed the profitability of the company. Thus, the company must churn out a crap product to be able to match the prices of their competitors. And that's not to mention the greed of the consumer which perputuates the whole madness in the first place.

reply to post by Cabaret Voltaire


sociology.ucsc.edu...

How are these huge gains possible for the top 400? It's due to cuts in the tax rates on capital gains and dividends, which were down to a mere 15% in 2007 thanks to the tax cuts proposed by the Bush Administration and passed by Congress in 2003. Since almost 75% of the income for the top 400 comes from capital gains and dividends, it's not hard to see why tax cuts on income sources available to only a tiny percent of Americans mattered greatly for the high-earning few.

motherjones.com...

By the height of the credit bubble between 2000 and 2007, the financial industry earned a staggering 40 percent of all corporate profits recorded in the United States, four times what they earned in 1980. Over the same period, average pay on Wall Street doubled, while bonuses at the top sextupled.

sociology.ucsc.edu...

As of 2007, the top 1% of households (the upper class) owned 34.6% of all privately held wealth, and the next 19% (the managerial, professional, and small business stratum) had 50.5%, which means that just 20% of the people owned a remarkable 85%, leaving only 15% of the wealth for the bottom 80% (wage and salary workers). In terms of financial wealth (total net worth minus the value of one's home), the top 1% of households had an even greater share: 42.7%.

In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

According to a study published by the Federal Reserve Bank of Cleveland, only 1.6% of Americans receive $100,000 or more in inheritance. Another 1.1% receive $50,000 to $100,000. On the other hand, 91.9% receive nothing (Kotlikoff & Gokhale, 2000). Thus, the attempt by ultra-conservatives to eliminate inheritance taxes -- which they always call "death taxes" for P.R. reasons -- would take a huge bite out of government revenues for the benefit of less than 1% of the population.

Here are some dramatic facts that sum up how the wealth distribution became even more concentrated between 1983 and 2004, in good part due to the tax cuts for the wealthy and the defeat of labor unions: Of all the new financial wealth created by the American economy in that 21-year-period, fully 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s (Wolff, 2007).

Most amazing of all, the top 0.1% -- that's one-tenth of one percent -- had more combined pre-tax income than the poorest 120 million people (Johnston, 2006).