If you watched any television last night, you probably saw this commercial:
“We have repaid our government loan in full, with interest, five years ahead of the original schedule.”
CEO Ed Whitacre is telling us the truth, but not the whole truth. What about the other $45 billion that American (and Canadian) taxpayers gave General Motors last year, which was originally part of that loan? Why doesn’t he mention that still-outstanding amount as he so proudly touts the payback of less than 14% of GM’s unsettled debt? When do we get that money back?
MarketWatch is a bit more realistic about Whitacre’s announcement:
Yet for all the fanfare, this is icing on the cake — and there’s still no cake.
The federal governments of Canada and the United States are the majority shareholders in General Motors, and will be until the carmaker issues new shares to the public. We still don’t know when that will be, and Whitacre didn’t offer any new clues.
And the Associated Press reports:
The White House pointed to GM’s repayment of the loan and Chrysler LLC’s posting of an operating profit in the first quarter of 2010 as concrete signs that the bailout of the U.S. automakers was working.
In a report, they noted the American auto industry lost more than 400,000 jobs in 2008 and analysts estimated another 1 million would have been lost had GM and Chrysler liquidated. In the past nine months, the White House said the industry has added 45,000 jobs, the strongest job growth in the industry in nearly a decade.
Sorry, but given the record the White House has in their predictions, as well as their ability to accurately account for jobs “created or saved”, I’m going to take that assertion with a huge shaker of salt (until that’s outlawed, too).
Unless GM is engaging in financial shell games of a kind that would put Bernie Madoff to shame, how is it possible for a company which posted a $4.3-billion loss for the half year after “emerging” from bankruptcy last summer, lost $30.9 billion in 2008, and has laid off nearly 65,000 workers over the past year expect to a) build good cars that consumers want to buy, b) keep up payments to unions and union healthcare trust funds, and c) pay back their debt to American taxpayers?