GM & Chrysler Unlikely to Pay Back Stimulus $$

[paparush]

Source: AP

GAO: Full recovery of auto investment unlikely
by THE ASSOCIATED PRESS

WASHINGTON November 2, 2009, 03:53 pm ET
Taxpayers are unlikely to recover their full investment in General Motors or Chrysler, government investigators said Monday in the latest review to cast doubts that the government will recoup the $80 billion it poured into the two automakers.

The Government Accountability Office concluded that General Motors Co. and Chrysler Group LLC likely won't be valuable enough for the Treasury Department to break even on its investment in the two auto companies that went though bankruptcy earlier this year.

The GAO also revealed that the Obama administration is closely scrutinizing the finances of GM and Chrysler and has set some requirements on production even though it has said it will maintain a hands-off approach on the automakers' daily operations.

To recover the loans Treasury gave Chrysler and GM to keep them afloat, the automakers would have to reach valuations they didn't approach even when they were healthier.

Read more: http://www.npr.org/templates/story/story.php?storyId=113991659

[itsrobert]

1. Repost

You even have the timestamp: November 2, 2009, 03:53 pm ET


Did you bypass all the posting warnings just to prove a point?

[paparush]

4. No. I searched LBN for "Chrysler" and didn't see a similar post title.

Mods, feel free to lock this thread down or join it to the previous post.

[Craftsman]

2. No Crap! I could have told them this.

Heck if they are not careful they will both be bankrupt again inside 12 to 18 months.

[Craftsman]

3. No Crap! I could have told them this.

Heck if they are not careful they will both be bankrupt again inside 12 to 18 months.

[Zenlitened]

5. Fine by me, if we can take the next step.

To me, the auto industry bailout was about preserving real, worthwhile talent: the skilled men and women who MAKE STUFF with their hands. (As opposed to the Wall Street "talent," which by and large has only acted as a parasite for too long.)

But... I don't expect or wish that they all go back to building cars in bubble-era numbers. I'm hopeful that they will very soon be needed in every aspect of a large and growing alternative energy industry based right here in the USA.

I'm more and more convinced that market forces alone won't get us there, though. Rather, I believe we'll need an FDR-style program to Just Get It Done Already Ferchrissake. There is plenty of technology ready to go, right now, and I'm confident we as a nation could mobilize quickly to put all the elements of production and deployment in place... if only we could muster the political will.

[david_vincent]

6. This reporting is flagrantly misleading

We didn't invest in GM and Chrysler, as this story clearly states. It would've been an investment IF we had gotten equity for our money. We didn't. Therefore, the money being discussed in this article was not an investment but a handout. GM and Chrysler were simply handed billions of dollars and we didn't get squat for it. You could certainly make a case that they were rewarded for their incompetency. What happened constitutes naked corporate welfare, but when a citizen gets welfare, there are strings attached -- when a corporation gets it, there are no strings, no oversight, and no equity is exchanged.

[Ganja Ninja]

7. Why not just seize all executive bonuses every year until the money is paid back?

:shrug:

[JonQ]

8. Not surprising

Essentially we subsidized a bad business model. And surprise surprise that model doesn't work well.