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View Full Version : Auto industry payback may surprise U.S. taxpayers



Buzz
07-20-2010, 10:48 AM
I saw this in the Detroit Free Press today.

This is the first part of a longer article, the rest can be seen at:

http://www.freep.com/article/20100720/BUSINESS01/7200346/1318/Auto-industry-payback-may-surprise-taxpayers


Auto industry payback may surprise U.S. taxpayers


WASHINGTON -- Saving Detroit's auto industry may be a better deal for U.S. taxpayers than anyone expected.



A Free Press analysis suggests that taxpayers could get back about $74 billion of the $86 billion the government made available in 2008 and 2009 to save General Motors, Chrysler and Ally Financial, the former GMAC.

So far, the industry has paid the government $18.3 billion in debt, interest and dividends, and the prospects for payback have improved thanks to a rebound in vehicle sales and profits at the three companies. That includes the $1.5 billion Chrysler Financial has paid off and a $5-billion aid plan for suppliers that turned a profit.

Although no independent analysis has found that the government could break even, GM, Chrysler and Ally have promised to try to pay back the U.S. Treasury entirely.

The reduced losses still would leave the auto industry efforts more costly than the rescues of Wall Street and the banking industry, which are turning a profit for the U.S. Treasury.

But even with a slower recovery, a successful GM stock sale and profits at Chrysler and Ally could help lift public anger at the industry and the Obama administration's rescues.

"The prospects have modestly exceeded expectations," said David Sowerby, chief market analyst at Loomis Sayles & Co. "The outcome, due to the health of the patient, has made the doctor look better."

luvmylabs23139
07-20-2010, 10:52 AM
The gov't broke the law and screwed secured bondholders and kissed the UNions BUtts.
This was nothing more than blatant redistribution of wealth AKA SOCIALISM>
Screw BUMMFACE that socialist who should be charged with TREASON!!!!!@

Blackstone
07-20-2010, 10:49 PM
The gov't broke the law and screwed secured bondholders and kissed the UNions BUtts.
This was nothing more than blatant redistribution of wealth AKA SOCIALISM>
Screw BUMMFACE that socialist who should be charged with TREASON!!!!!@

What law did the Gov. break?

Blackstone
07-20-2010, 11:02 PM
I saw this in the Detroit Free Press today.

This is the first part of a longer article, the rest can be seen at:

http://www.freep.com/article/20100720/BUSINESS01/7200346/1318/Auto-industry-payback-may-surprise-taxpayers

Now the U.S. car companies need to reopen some plants so they can build enough vehicles to meet market demand. Most popular models are in short supply on dealer's lots.

luvmylabs23139
07-21-2010, 09:15 AM
What law did the Gov. break?

Try bankrupcty laws. Secure bondholders are suposed to be paid first.

Blackstone
07-21-2010, 10:21 AM
Try bankrupcty laws. Secure bondholders are suposed to be paid first.

No bankrupcty laws were broken. The bondholders had a choice. They could go through the normal bankruptcy court process, allowing a judge to decide what they would receive, or they could accept a negotiate settlement prior to the bankruptcy proceedings that would be honored in bankruptcy. They chose to accept a negotiated settlement. The bondholders realized they were probably going to receive a lot less for their interest if they let a bankruptcy court decide. There is nothing illegal about it. In fact, it's not that unusual in cases where the company going into bankruptcy is restructuring, and not going out of business.

luvmylabs23139
07-21-2010, 10:35 AM
No bankrupcty laws were broken. The bondholders had a choice. They could go through the normal bankruptcy court process, allowing a judge to decide what they would receive, or they could accept a negotiate settlement prior to the bankruptcy proceedings that would be honored in bankruptcy. They chose to accept a negotiated settlement. The bondholders realized they were probably going to receive a lot less for their interest if they let a bankruptcy court decide. There is nothing illegal about it. In fact, it's not that unusual in cases where the company going into bankruptcy is restructuring, and not going out of business.

Wrong! BUMMA flat out said he was gonna screw bondholders and they tried to fight it but he threw laws in the trash.
BUMMA NEEDS TO GO NOW!

Blackstone
07-21-2010, 11:34 AM
Wrong! BUMMA flat out said he was gonna screw bondholders and they tried to fight it but he threw laws in the trash.
BUMMA NEEDS TO GO NOW!

That is a gross misinterpretation of what actually happened. Obama didn't have the ability to "screw" bondholders, unless he was going to take over the bankruptcy court.

The settlement was negotiated between the auto makers and the bondholder prior to going into bankruptcy. This would assure bondholder of what they would receive under the restructuring plan submitted to the bankruptcy court. Obama applied pressure by saying he would not assist bond holders recoup any of their money if they didn't accept a settlement. And, that was only directed at those bondholders who were blocking the settlement. Most of the bondholders had already agreed to the terms of the settlement.

The fact is, you can't break bankruptcy laws if the company hasn't filed for bankruptcy.

So, again, I ask, what laws were broken? What laws were thrown in the trash?

luvmylabs23139
07-21-2010, 11:40 AM
That is a gross misinterpretation of what actually happened. Obama didn't have the ability to "screw" bondholders, unless he was going to take over the bankruptcy court.

The settlement was negotiated between the auto makers and the bondholder prior to going into bankruptcy. This would assure bondholder of what they would receive under the restructuring plan submitted to the bankruptcy court. Obama applied pressure by saying he would not assist bond holders recoup any of their money if they didn't accept a settlement. And, that was only directed at those bondholders who were blocking the settlement. Most of the bondholders had already agreed to the terms of the settlement.

The fact is, you can't break bankruptcy laws if the company hasn't filed for bankruptcy.

So, again, I ask, what laws were broken? What laws were thrown in the trash?

BUMFACE threatened to throw years of case law in the tash and stong arm them. Those that chose to fight it were denied their say.
BUMFACE needs to be charged with TREASON TODAY>

Blackstone
07-21-2010, 11:56 AM
BUMFACE threatened to throw years of case law in the tash and stong arm them. Those that chose to fight it were denied their say.
BUMFACE needs to be charged with TREASON TODAY>

Okay, let's dispense with the wild-eyed accusations, and present some proof. Show where Obama (and, his name is Obama, not BUMFACE) threatened to throw years of case law in the trash.

The fact is, the bondholders could have elected not to settle. They could have gone to court and had their say. However, they knew they probably would have ended up recouping less of their investment in bankruptcy court than they would by accepting the settlement. The only reason they were holding out is because they wanted the Gov. to make them whole, or close to it, in the agreement. If the Gov. hadn't been involved, those same bondholders would have jumped at the proposed settlement for fear they would have lost much more in a court directed settlement.

If this is wrong, please present PROOF to the contrary.

Franco
07-21-2010, 12:09 PM
If GM pays off their government loans, will the UAW allow them to make a profit? Or, will the UAW demand more concessions when things start to look better.

I'll add that I don't think the economy is looking any better and we have yet to see the worse. I hope I am wrong but when governemnt interfers with the private sector, it usually a relationship that will never end.

As Milt Freidman once said, "We should try Capitalism sometime"

mjh345
07-21-2010, 12:12 PM
The gov't broke the law and screwed secured bondholders and kissed the UNions BUtts.
This was nothing more than blatant redistribution of wealth AKA SOCIALISM>
Screw BUMMFACE that socialist who should be charged with TREASON!!!!!@

The auto industry bailout was Bush's idea.
Is that the "BUMMFACE" that you think should be charged with treason?

Blackstone
07-21-2010, 12:38 PM
If GM pays off their government loans, will the UAW allow them to make a profit? Or, will the UAW demand more concessions when things start to look better.

I'll add that I don't think the economy is looking any better and we have yet to see the worse. I hope I am wrong but when governemnt interfers with the private sector, it usually a relationship that will never end.

As Milt Freidman once said, "We should try Capitalism sometime"

GM has paid back the Gov. loans already. The plan now is to buy out the Gov.'s stake in GM.

I fully expect the UAW will ask for concessions in the next contract in an attempt to recoup some of what they gave up during the bankrupcy settlement. However, I don't think they will be able to get anything significant. GM is not going back to where it was. The good old days for the UAW are effectively over.

duckheads
07-21-2010, 02:03 PM
GM has paid back the Gov. loans already. The plan now is to buy out the Gov.'s stake in GM.

I fully expect the UAW will ask for concessions in the next contract in an attempt to recoup some of what they gave up during the bankrupcy settlement. However, I don't think they will be able to get anything significant. GM is not going back to where it was. The good old days for the UAW are effectively over.

I don't beleive this is true. They were advertising this and have since pulled their advertising since they were stretching the truth.

How can the good old days be over for the UAW when they own a percntage of the company? I grew up in a town that at one time had 30,000 GM workers and now has zero!!!!!!!!!! I knew plenty of people bragging about sleeping at work and going in drunk or drinking on the job. This is the problem with Unions. Companies should have the right to fire anyone that is pulling shit like this. The company should not have to pay for rehab 2 or 3 tiimes for people that fail a drug test which in the case with the steel mills in the area I now live in. Unions have ruined the work ethic of most of their workers and completetly instill an attitude that the company owes them just because they work for said company. They have no appreciation for the job said company provides them as well as the pay and benefits they recieve from the company!!!!!!!!!!!!!

Blackstone
07-21-2010, 02:39 PM
I don't beleive this is true. They were advertising this and have since pulled their advertising since they were stretching the truth.

How can the good old days be over for the UAW when they own a percntage of the company? I grew up in a town that at one time had 30,000 GM workers and now has zero!!!!!!!!!! I knew plenty of people bragging about sleeping at work and going in drunk or drinking on the job. This is the problem with Unions. Companies should have the right to fire anyone that is pulling shit like this. The company should not have to pay for rehab 2 or 3 tiimes for people that fail a drug test which in the case with the steel mills in the area I now live in. Unions have ruined the work ethic of most of their workers and completetly instill an attitude that the company owes them just because they work for said company. They have no appreciation for the job said company provides them as well as the pay and benefits they recieve from the company!!!!!!!!!!!!!

Ads donít run forever. They were pulled at the end of their cycle. All the loans have been repaid. Itís a matter of public record. The controversy was over the inference that GM had repaid the loans out of profits, when in fact, the money from those loans had never been used. GM found it was doing well enough so that it didnít need to use that money, so they repaid it.

The situation you described happened in a lot of plants. However, it does not describe the average plant worker. I know that for a fact because I worked in a plant one summer. I was an arc welder. I worked hard, and worked mandatory overtime. I started off working days, but I wimped out and quit after I was bumped onto the 2nd shift. Once the machinery fired up on the 2nd shift, it was well over 100 degrees in there. Union reps would come around and give us salt tablets before the shift started to keep us from dehydrating. The guys I worked with had been working in those conditions for years. They didnít take drugs, come to work drunk, miss work, or sleep on the job. They stood right there on the line working hour after hour, day after day, until break time or time to go home. That is the average UAW worker. You canít judge all of them by the actions of a few.

Iím not saying there arenít abuses by union workers because there are. But, it should also be remembered that if there hadnít been abuses by employers, there never would have been a need for unions in the first place. Unions built the standard of living for the average American. They are the reason you have any benefits at all.