How is that GM Bailout Coming Along?
by ilene - April 23rd, 2010 6:02 pm
New GM Cars Run on Efforts of U.S. Taxpayers
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By Excerpt: "…we thought it best to cut out the middle man and have taxpayers themselves power GM cars."
More Op-Toons Review on GM innovation here.>>
See also:
GM Repays Government Debt; Was The Bailout A Success?
Courtesy of Mish
GM repaid $6.7 billion in US loans and another $1.4 billion in Canadian government loans. So where does that leave GM? Let’s take a look.
Please consider Gas in the tank: GM repays $8.1B in gov’t loans
Fallen giant General Motors Co. accelerated toward recovery Wednesday, announcing the repayment of $8.1 billion in U.S. and Canadian government loans five years ahead of schedule.
Much of the improvement comes from GM slashing its debt load and workforce as part of its bankruptcy reorganization last year. But the automaker is a long way from regaining its old blue-chip status: It remains more than 70 percent government-owned and is still losing money — $3.4 billion in last year’s fourth quarter alone. And while its car and truck sales are up so far this year, that’s primarily due to lower-profit sales to car rental companies and other fleet buyers.
The U.S. government still owns 61 percent of GM. The automaker is counting on a public stock offering to allow the U.S. government to begin recouping its remaining $45.3 billion investment. The Canadian government’s $8.1 billion stake, which equals a 12 percent ownership interest, also could also be unlocked if GM sells shares to the public.
GM lost $88 billion between 2004, when it last turned a profit, and last year when it declared bankruptcy. It endured years of painful restructuring, closing 14 factories and shedding more than 65,000 blue-collar jobs in the U.S. through buyouts, early retirement offers and layoffs.
GM received $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments starting in 2008. At first the entire amount of U.S. aid was considered a loan as the government tried to keep GM from going under and pulling the fragile economy into a depression.
But during bankruptcy, the U.S. government reduced the loan portion to $6.7 billion and converted the rest to company stock. Canadian governments also converted part of their debt to shares, reducing its loan balance to $1.4 billion. The final installments on those loans were repaid Tuesday, comfortably beating
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW.