24 September 2012 0 Comments

GM Going Bankrupt – Another Obama Bailout Forcibly Financed by The Productive Forgotten Taxpayer


” President Obama is proud of his bailout of General Motors. That’s good, because if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and seems unable to develop products that are truly competitive in the U.S. market.” READ MORE Forbes 15 August 2012 Louis Woodhill

GM Motors Has Some Pension Problems as Does the Government’s Pension Benefit Guaranty Corporation READ MORE Detroit News 9 August 2012

“[GM Chairman and CEO Dan ] Akerson noted the company’s decision to off-load its salaried pension plans to Prudential Insurance. That move has angered some retirees, because they will lose the protection of the government’s pension insurer, the Pension Benefit Guaranty Corp.

He noted that PBGC went from a $100 billion surplus in the 1970s to a deficit of $26 billion today.

“They’re technically (in) bankruptcy. They aren’t there for you,” Akerson said. “We have to fix our pension plans ourselves.”

 

Auto Bailout or UAW Bailout? Taxpayer Losses Came from Subsidizing Union Compensation  READ MORE James Sherk and Todd Zywicki June 13, 2012 The Heritage Foundation  

 

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Some Background from FrontPage Magazine 17 August 2012:  The numbers are stark. The 500,000 shares of GM stock, comprising 26 percent of the company owned by the government–or more accurately the American taxpayer–sold for $20.21 on Tuesday. This left the government holding $10.1 billion worth of stock representing an unrealized loss of $16.4 billion. Even worse, in order to reach the break-even point, the stock would have to sell for around $53 per share.

The numbers remain in flux.  Investors Business Daily reveals, the Treasury Department continues “to revise upward the staggering losses inflicted on U.S. taxpayers.” They further note that the same day GM announced it was recalling 38,000 Impalas used by police in both America and Canada, due to a possible crash risk, a new Treasury report perdicted that losses for GM were expected to reach $25 billion!  This figure is $3.3 billion more than predicted earlier. Furthermore, since that report was based on GM’s stock price at the time of the report–15 percent higher than it is currently–those losses are likely understated.

 

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