Posted: April 22nd, 2010 by Militant Libertarian
Edmunds is reporting that Government Motors says they’ve paid off the last of their bailout money back to the governments of the U.S. and Canada. Apparently, GM’s CEO Ed Whitacre made the announcement along with a lot of other stuff at a press event on April 21.
The company also plans to invest a lot of money into upgrading some manufacturing plants to keep up with the 36% increase in sales this quarter of such cars as the Malibu and the LaCrosse. I guess the old folks got their pensions and can afford to buy their favorite land yachts again.
The payments to the U.S. Treasury and Canada’s government finished out the total of $8.4 billion owed, according to GM.
So far, however, the large stake of ownership with the U.S. government and the much smaller stake the Canadian government has taken in GM has not been sold off. I don’t think it will be.
You see, the claimed $8.4 billion (all but $1.4 billion of which was to the USG) in loans is just a drop in the bucket compared to the full bailout largess the company received. GM actually got $52 billion from the U.S. and another $9.5 billion from Canada. Those pure bailout funds are what the company is likely operating on now, since they are still not very profitable.
Of course, not widely reported in the media (but in GM’s press release, linked above) is the statement to the effect that Whitacre “hopes” the company can pay back the other $45+ billion to the U.S. and $8 billion to Canada. Hopes.
So the headline that the loans have been paid back is just that: a headline. It means zilch. The company is still Government Motors and that’s not going to change anytime soon. Not unless they get a large chunk of change from some unknown source.
Who knows? Maybe Goldman Sachs is looking to get some positive publicity and will dump some of their bailout cash into GM and make it Goldman Motors instead?