@EasyAce
IIRC GM is still into American Taxpayers something like $12 Billion from the Bush bailout and that doesn't mention the hosing their shareholders took to prop up the unions. I personally hope GM goes totally in the tank and they will if they wait for me to buy anything they make going forward.
Fixed it for you. George W. Bush signed off on the total $80.7 bailout in December 2008, a month before he left office, leaving it to the next administration to administer it. Which Barack Obama eventually used as a pretext to impose new efficiency standards. The bailout included that the government would take GM and Chrysler over in March 2009, with the feds forcing out then-GM CEO Rick Wagoner and requiring Chrysler to merge with Fiat.
The bailout worked by way of the Treasury Department using monies from the Trouble Asset Relief Program (TARP) to lend money to and buy stock in GM, its financing arm GMAC, and Chrysler. The breakdown would go like this:
* GM got $51 billion. Treasury eventually sold shares for $39.7 billion. We the taxpayers took a rather lavish $11.3 billion bath on that. December 2013 was the end of that.
* GMAC got $17.2 billion. Treasury eventually sold shares for $19.6 billion, a $2.4 billion profit as it were. December 2014 was the end.
* Chrysler got $12.5 billion. Treasury eventually sold shares for $11.2 billion. This time, the taxpayer bath in May 2011 was a mere shower by comparison: $1.3 billion.
* The entire bailout program was fully finished by 2014.
Where was Ford? Ford was the only one of the Big Three who wasn't in financial hot water at the time Bush signed the bailout. They'd already begun cutting costs and revamping its offerings. But because they were jittery about having to compete, essentially, with nationalised automakers, which is essentially what GM and to that lesser extent Chrysler were during the bailout, Ford asked in on a small piece---for its Ford Credit arm, not for Ford itself. And even there, Ford Credit got money not by way of TARP but by the Term Asset-Backed Securities Loan Facility, a government program for auto, student, and other consumer loans. If I recall right, Ford repaid that well before the bailouts for GM and Chrysler ended.
If GM (Chrysler hasn't made a peep on the matter) is annoyed at President Tweety for trying to tell them how to run their business, they have a right to be. It's not the president's business to tell a business how to operate or where to align or rebuild facilities. And whatever its other issues (there are plenty), GM isn't wrong that the steel and aluminum tariffs piled onto their problems, as they have upon other businesses that don't make cars, didn't go to the feds for handout help, but depend on steel and aluminum for what they make and sell. But President Tweety inadvertently does have a point: Lying down with the government dog in the first place means GM awakening with government fleas pecking at them.
Veronique de Rugy has
isolated the dilemna in National Review:
To be sure, I can see why the president is so upset. Because he has made the revival of American manufacturing the centerpiece of his campaign and presidency, a weird goal considering the incredibly high manufacturing output that the U.S. has experienced in recent years, every American company that doesn’t go with the plan is chastised publicly, sometimes even threatened. Remember Harley Davidson, which the president threatened with a boycott from its consumers? On Monday, the president told GM that it “better get back in†Ohio “soon,†and that “They better put something else in†the Lordstown, Ohio, plant that is now slated to be closed.
Is this what it has come to that the president is meddling with the productive assets of a private company? And don’t get me started on the president’s threat to cut all GM subsidies. I oppose all forms of subsidies to the private sector but I am also appalled by the use of subsidies as a way for the president to get companies to do what he thinks that they should be doing.
Also, all of this huffing and puffing is a little rich coming from a president who is doing his absolute best to make it harder for automakers, domestic and foreign, to produce cars in the U.S. As mentioned above, one obstacle is the schedule of metal tariffs — punitive taxes on a major input that unquestionably increases automakers’ costs of production and thereby forcing them to hike their prices. GM says that they cost the company $1 billion. This situation obviously isn’t ideal for a company such as GM which has already seen falling sales for a few of its models.
These tariffs are also punishment for companies that use the U.S. as their base for exporting to the rest of the world. You don’t have to be a genius to understand that if it is more expensive to produce a car in the U.S. than elsewhere, it makes cars slated for exports less competitive.
. . . Obviously, GM’s decision to close its plants isn’t just about the president’s trade policy. I suspect this decision was a long time in the making. But President Trump’s tariffs certainly didn’t help. And I wouldn’t be surprised if this announcement is only the first of several similar ones to come. The future of the American automobile industry depends on increasing exports of cars made in here by both domestic and foreign companies. It is unclear that there is much room to grow at home (we may even see a decrease in the number of car per family if driverless cars become a reality). And so making it harder to export means stalling the automobile industry and providing it with incentives to move abroad.
I write after having finished vacuuming my nice 2007 Toyota RAV4. Which I hope to trade in in due course for one of the forthcoming RAV4s . . .
