American Automobile Industry: Can it survive? Message Board

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Technology Stocks : American Automobile Industry: Can it survive?

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To: Don Hurst who wrote (360)	2/16/2011 11:56:02 AM
From: TimF	1 Recommendation Read Replies (2) of 431

Making profits and giving out bonuses when your debt has been canceled and the government is throwing benefits your way, might be success for people directly involved but isn't a success from a broader perspective. Volt getting excellent reviews by early drivers... Some excellent reviews, mainly from people who think the technology is pretty cool and aren't really evaluating it based on how it actually works as a car compared to cars with similar price (esp. not compared to cars with similar prices, when you add back the tax credit to the price). GM paying back debt to taxpayers at very positive rate... While getting special tax breaks. Its paying back one way the government helped it while leaning on another form to do so. Also - "At the time of GM’s IPO, President Obama sounded like Mr. Goodwrench: "Just two years ago, this seemed impossible. In fact, there were plenty of doubters and naysayers who said it couldn't be done, who were prepared to throw in the towel and read the American auto industry last rites.” "What he might have said is this: “We hosed the shareholders and suckered the bondholders down to $0.30 on the dollar. We propped up GMAC with $17.5 billion and then buried the losses in bad bank accounting. We leaned on the accountants to keep $45 billion in Net Operating Losses. We learned something from Bernie Madoff and are letting GM continue to carry $30 billion in unfunded pension liabilities. We dumped GM’s health care obligations, for shares, into a union trust. The rest we moved off the lot. Home run.” "The government originally threw $49 billion at GM’s cash guzzling problems and then forced another $100 billion on the market in losses. In exchange thus far, it has recouped $15 billion, for about half of it stake in the new GM." reason.org

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