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The Almighty Buck Politics

GM's CEO Rejects Repaying Feds for Bailout Losses 356

Posted by Unknown Lamer
from the loan-guarantees-bad-blank-checks-good dept.
PolygamousRanchKid writes with news that GM's outgoing CEO doesn't agree with the National Law and Policy Center's call for GM to repay the loss made by the Treasury from their bailout. From the article: "GM CEO Dan Akerson rejects any suggestion that the company should compensate for the losses. He says Treasury officials took the same risk assumed by anyone who purchases stock. Akerson said that GM repaid all the debt issued by the government beginning in December 2008 when George W. Bush was still president and extending into the first year of Barack Obama's presidency. He added that it was the Treasury's decision ... to take an ownership stake in the form of company shares."
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GM's CEO Rejects Repaying Feds for Bailout Losses

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  • by MrDoh! (71235) on Tuesday December 17, 2013 @06:09AM (#45712249) Homepage Journal
    Why on earth pay back 10B to the tax payers when that could buy a whole load of politicians to lend(give away) more money?
  • by Anonymous Coward on Tuesday December 17, 2013 @06:22AM (#45712287)

    Economics and finance are topics which can easily be described as nerdy. Just because it doesn't matter to you doesn't mean it isn't Stuff That Matters to someone else.

  • real socialism (Score:5, Insightful)

    by duckintheface (710137) on Tuesday December 17, 2013 @06:28AM (#45712307)

    The word socialism gets tossed around carelessly by right wing pols who don't know what it is. To them it's just a nasty thing you say when liberals like me want to redistribute a little wealth. But real socialism, as meant by Karl Marx, is defined as "the ownership of the means of production by the state". Domestic spending on public education or health care is NOT socialism. But government assumption of corporate shares is the real thing. In our system of economics, corporations are not people and governments do not own the means of production.

  • Re:real socialism (Score:5, Insightful)

    by FriendlyLurker (50431) on Tuesday December 17, 2013 @06:57AM (#45712367)
    True. The US is the biggest corporate welfare socialist regime [thinkbynumbers.org] in the world. Socialism is only a dirty word when you, dear tax payer, demand more social service bang for your buck. Why spend good tax $$$ on a dignified social security net [wikipedia.org] when you can spend (appropriate?) X times more on an effective police state to crack down on the resulting crime due to a lack of one, or sell more health insurance even.
  • by Sockatume (732728) on Tuesday December 17, 2013 @07:00AM (#45712377)

    It doesn't affect him personally, but it does affect GM's bottom line and it's his duty to the shareholders to protect that. Ultimately he's got to choose between two sets of investors: GM's shareholders, and the general public, and he's chosen the ones who still hold shares. As far as is economic function is concerned he has done exactly the right thing. Of course one would like to think that CEOs of all people weren't reduced to the role of an amoral intelligent agent serving the mother company, but at the end of the day even a brain cell doesn't get to argue with the body's need to survive and flourish.

  • by confused one (671304) on Tuesday December 17, 2013 @07:25AM (#45712435)

    He didn't take the money, Treasury chose to invest the money under direction of both the Bush and Obama administrations, in order to keep GM and its supply chain from collapsing. While they lost money on the face of it, the economy gained value, likely in excess of the $10B loss. If the end result exceeds the scenario where government did nothing, then government did it's job by stabilizing the economy.

    This isn't personal. His job is to protect shareholder value. He indicated, in the interview, that if he paid back the $10B loss he would be opening GM up to lawsuits from every other shareholder who lost money in the bankruptcy.

  • by gl4ss (559668) on Tuesday December 17, 2013 @07:38AM (#45712479) Homepage Journal

    uh that makes no sense at all.

    they should have gone bankrupt - or loaned money backed by their assets... having a pool that's kept only to keep failing companies running belongs to the history of the ussr.

  • by Ihlosi (895663) on Tuesday December 17, 2013 @07:50AM (#45712547)
    b) A "loan" would have left them with nothing if the company had tanked. A stock purchase would entitle them to some company assets to sell off, this is what most people call "security".

    Err ... I think you're confusing things here. When a company tanks, its assets get sold off (or otherwise turned into money) to satisfy the creditors (the people who gave loans) demands. In this process, the stockholders shares go *poof*, mostly.

    When a company tanks, the creditors are in a slightly better position than the stockholders. In fact, the creditors might end up being the new owner of the company.

  • by argStyopa (232550) on Tuesday December 17, 2013 @07:51AM (#45712549) Journal

    ...at all levels.

    As I calculate, the cost to the government is REALLY more like net $70 billion, when you take the $50bn aid, the devaluation, the forgiven loans, and then deduct the small amount that came back to the government as it sold off its shares.

    The FACT is that government handouts validate, enstantiate, hell, they ENCOURAGE and reward the sorts of shitty decision-making that caused them to be necessary in the first place. At ALL socioeconomic levels.

  • by unitron (5733) on Tuesday December 17, 2013 @07:52AM (#45712553) Homepage Journal

    Yes, I would love to hear the economic rationale for selling when they did.

    To shut up all the people whining about the government being in the car business?

  • by Stolpskott (2422670) on Tuesday December 17, 2013 @08:16AM (#45712627)

    a) Those 'other shareholders' bought the shares voluntarily. The taxpayer didn't.

    Very true, but "the taxpayer" did not choose to invest in GM in the first place, the US Government did. Equally, "the taxpayer" did not choose to sell their shares in GM, at a lower price than those shares were bought for (thus generating the losses), the US Government did.
    The US Government had a very compelling reason for buying those shares and shoring up the GM corporate entity and its supply chain. However, there was no contractual obligation for them to sell the shares when they did - as far as I can tell, that decision to sell was made for purely political/PR decisions. Admittedly, those reasons are also compelling - if the US Government introduces and legislation that will have some kind of positive impact for car manufacturers, then there is a conflict-of-interest issue to be addressed, so it is in the Government's interest to avoid holding the shares for an extended period.
    However, the Government decided to sell when it did, and the Government is (or should be) responsible for the losses incurred through that decision. After all, if the transaction had yielded a massive profit, the Government would not have been willing to hand that profit over, either back to GM for further investment or to some other organisation that could use it. That profit would go to the treasury to be used.
    The company whose shares are being bought and sold has no control over that process, as the shares are freely tradeable on the open market. So without any leverage of control, the company cannot assume the liability for losses. Want to complain about it? Welcome to capitalism. Complaints can be addressed to our Complaints Manager, Helen Waite. Her office is in the basement. Form a queue outside the door, and when someone asks what you are doing, tell them that you were told to go to Helen Waite.

  • Re:real socialism (Score:3, Insightful)

    by inode_buddha (576844) on Tuesday December 17, 2013 @08:25AM (#45712661) Journal

    If charity worked we wouldn't need taxes. As it actually is, people are incredibly selfish antisocial bastards. Also, most of those who do not work, wish that they could get it. Just a few facts for you to ponder - as opposed to what the "media" would have you think.

  • by gravis777 (123605) on Tuesday December 17, 2013 @08:47AM (#45712751)

    GM had met the terms required of it from the bailout - some of which was paying back in cash, and some of which was paying in stock. The government decided to sell the stock at a loss. That's not GM's fault.

    Here is my question - what happened to GM stock when that many shares suddenly flooded the market? Wouldn't that make stock prices go DOWN? Ironically, though, the stock price went up considerably as investors are happy the government no longer holds a part of GM.

    In any case, whether GM benefited from this or not, the point is that 1)GM fulfilled its obligation and 2) the government sold stock at a loss. Maybe this lesson will force the government to make better financial decisions. Okay, probably not, but one could hope

  • Re:real socialism (Score:5, Insightful)

    by Mashiki (184564) <mashiki@NOsPam.gmail.com> on Tuesday December 17, 2013 @09:07AM (#45712829) Homepage

    The government of China works pretty well. So did the governments of Soviet Russia during the so called war communism period. Economically at least.

    Yeah...I don't think so. If you think it was economically sound, then all you need to do is find people who lived during the period, and ask them about the lack of *everything* from basic necessities, to food. Hell, I can even give a small story from a ex-professor of mine(teaches criminal law and drug laws here in Canada). Back in the 80's they had a group of 10 soviet police officers come over as part of a training program. Their firm belief was everything was staged, from people driving cars, to full shelves in every store, to people walking around and not being subject to search, arrest, and documentation checks. They believed, that the government had created giant potyomkin villages(ottawa, and toronto), just to impress them.

  • Re:real socialism (Score:4, Insightful)

    by Anne Thwacks (531696) on Tuesday December 17, 2013 @09:08AM (#45712841)
    We the people give permission to people/corporations to operate profitably amongst us, and in return expect to have a contribution towards providing the infrastructure needed for them to operate (which included educating potential employees in sufficient numbers that their wages do not get over-inflated, and keeping them healthy by curing other people who might otherwise infect your employees and make them sick). In civilised countries, there are steps taken to avoid the terminally greedy stealing from the weak - at least partly to avoid the weak deciding that they would be better off if they went out burning and looting as an amusement..

    Most of us, unlike Karl Marx, do not believe you need to own something to control it - the evidence is that it is quite possible to alter the volume on someone else's stereo, or drive a stolen car. The man was an idiot.

    Scumbags like you think that the object of life is to be "greedier than thou".

  • by Joce640k (829181) on Tuesday December 17, 2013 @09:40AM (#45713077) Homepage

    But only if the government is involved, it is all the fault of of the government, right?

    When the government uses force to take money from ordinary people "invests" it for them, losing $10 billion on the deal, then yes. It's their fault.

    If the people whose jobs/future that were saved by that "investment" now have an excess of $28 billion in cash, they should give it back to the people who were forced to help them (with threats of jail, etc. if they didn't).

  • Re:real socialism (Score:1, Insightful)

    by inode_buddha (576844) on Tuesday December 17, 2013 @09:47AM (#45713121) Journal

    5. Social darwinist: douchebag.
    6: Liberals: douchebags
    7: Conservatives: Douchebags
    8: Libertarians: douchebags ......

    These are they who believe that every man is an island unto himself. It usually works, until they need help all of a sudden for some reason.

    These "captains of industry" are among the most antisocial douchebags you'll ever encounter, and why should all the rest of our society suffer for their folly? Hence the bailout.

    BTW what about the disabled, are they douchebags for not working?

  • Re:real socialism (Score:2, Insightful)

    by Anonymous Coward on Tuesday December 17, 2013 @10:00AM (#45713247)
    The truth pisses you off? Follow the link, check the numbers - they are correct and completely spearate from the social security and medicare part of the social safety net . Rant on about how you do not believe/like/hate people saying it all you like, but it would be better if you actually supported your rant with evidence. The evidence presented so far from multiple sources clearly shows that the US really is the biggest corporate welfare socialist regime in the world. People like you always seem to focust on the "social security and medicare part". Shill, astroturfer or just blinded by corporate media, it is hard to tell...
  • Re:real socialism (Score:5, Insightful)

    by XcepticZP (1331217) on Tuesday December 17, 2013 @11:04AM (#45713937)
    9: Statists: douchebags

    We're not captains of industry, we're captains of freedom. And the disabled are not douchebags, they disabled. That's where charity comes in to play.

    Statists are the biggest captains of industry, they're the enablers, the socialist drug pushers, and the violent thugs. Since you like using names for people.

    Libertarians and anarchists are on a far better plane than people like you. We value morals and ethics over utilitarianism which is all too easy to misuse by tyrants.

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