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LETTERS: Bailout of GM was not needed

Obama didn't save General Motors

Obama didn't save General Motors

I am quite weary of hearing how President Obama saved GM. The cold hard fact is that what Obama did was to keep GM from declaring bankruptcy as it wanted and needed to do.

Bankruptcy would not have caused GM to go out of business or even stop the production of a single automobile in spite of the claims of Obama's disciples. Unfortunately, all too many American citizens are too ill-informed to realize what bankruptcy actually entails. Bankruptcy would have allowed GM to restructure debts, renegotiate union contracts and to continue production. GM would not have gone out of business in spite of Obama's claims. And taxpayer funds to "rescue" GM are effectively donations to the United Auto Workers (UAW) and are not likely to ever be repaid.

It is quite clear to those of us who owned GM stocks and bonds that Obama destroyed our equity interest by effectively transferring GM ownership to the federal government and to the UAW. The so-called Obama "rescue" of GM was not really about rescuing GM but was all about preserving union benefits and about giving control of GM to the union/government cabal. The bailout of GM was all about catering to the UAW. And that is why my recent purchase of a new automobile was not a GM product or even UAW produced.-- Ernest Wade

Loganville

Comments

CD 1 year, 7 months ago

Please name the banking institution that was prepared to offer financing so that GM could continue to meet current obligations while in BK. Please name the private equity firm (s) that were prepared to offer financing. Answer: there were none. In fact, Cerberus walked away from Chrysler because they were unwilling to put anymore skin into the game.

The government was the only willing lender and the lender of last resort. Obama's decision was the right decision. I actually disagreed on the Chrysler bailout, but Obama made the right call there as well. Thousands of jobs were saved, direct and indirect at suppliers and GM is a healthy company, capable of competing with any auto company in the world.

Equity owners are the first to take the hit in any BK. That is just the way it is. If you don't like it, buy bonds; even then, you get what you get in liquidation and you take the haircut.

I'm not all union by any stretch, but the UAW had a purpose, could still be useful, but is certainly not without fault.

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genew 1 year, 7 months ago

Obviously you need to read the original letter. I DID HAVE BONDS. Bond holders took a hit, thanks to Obama, so that the UAW received a higher priority instead of bondholders. And, how do you know there were no firms willing to lend to GM since this was a rushed up deal..

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Say_that_again 1 year, 7 months ago

Mr. Wade: You have been taken in by the Romney fallacies. Even in a chapter 11 bankruptcy, there would have been significant damage to our economy. First, "restructuring debts" usually entails a huge loss for the holders of that debt. Second, "Renegotiating union contracts" is code for reduce pay and perks. In some bankruptcies, it has resulted in the workers losing their pensions. Of course Romney likes bankruptcy. By bankrupting companies, Bain was able to make millions while giving workers the shaft. With the size of General Motors, the reduction in pay would have reduced the spending power of these employees and had a domino effect on businesses in cities with major plants. The idea that GM would be selling as many cars under Bankruptcy is also absurd. Without a stable company to back up guarantees and able to make recall repairs, more people would have opted to not purchase GM vehicles. The only true fact you offer is that the Equity owners (i.e. Stockholders) would have taken a big loss as their stock value plummeted, possibly all the way to $0.00. This would have hurt the retirement investments of many not directly connected with GM. Bottom line, any economist that tells the truth will tell you that bankruptcy of GM would have done significant damage to the economy, resulted in some plant closings and large layoffs.

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genew 1 year, 7 months ago

And just why should GM receive special considerations when other companies do not? The Obama bailout was less about saving GM that it was to help his union supporters.

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jack 1 year, 7 months ago

Ask the non-union Delphi workers about their pensions.
Ask the secured bondholders how their investment now looks.
Ask the American taxpayers about paying $53/share for stock valued at $23.37/share.

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Say_that_again 1 year, 7 months ago

And under what absurd scenario do you think bankruptcy would have hurt less? I did not find all the details of pension losses, but bankruptcy would definitely have hurt them more. Secured bondholders would have experienced greater loss, and taxpayers have seen a profit on part of the bailout and still potential of a stock rebound. Even if the stock fails to rebound, the unemployment payments and loss tax revenue from a bankruptcy was expected to far exceed the losses that the government is potentially facing. Basically I see your argument as "We should have done nothing so we could lose $4 in a free market instead of loosing $2 with government assistance." Give me a break!

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jack 1 year, 7 months ago

" Secured bondholders would have experienced greater loss, and taxpayers have seen a profit on part of the bailout and still potential of a stock rebound. " Let's see: secured bondholders would have been given a chance to get something back instead of nothing. The taxpayers are on the hook for $25 billion so far, so no profits there. And according to Forbes, GM's stock has lost 49% of its value relative to the Dow, and may very well be headed toward bankruptcy, or another bailout.

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catperson2 1 year, 7 months ago

Since you apparently are able to buy a new car, this must mean you are certainly a lot better off now than 4 years ago. Most of us are still driving the same cars we have had for the last 10 years, at least that is my case. But the good news, I don't have a car payment and my insurance rates are reasonable. The way I see it, President Obama made it possible for you to buy a new car even if it isn't a GM or Chrysler. And a lot of folks aren't on the welfare roles because they lost their jobs if the car companies were left to go bankrupt. Even the "dreded" unions reigned in their demands and made it possible for the car companies to be competitive. So please think before you speak and disparage the one person that saved this country from another Great Depession, President Obama.

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R 1 year, 7 months ago

Sure.... Right .... Hokey Dokey!!

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FordGalaxy 1 year, 7 months ago

You bought in to Obama completely, didn't you, catperson2? You really think Obama alone is responsible for "sav[ing] this country from another Great Depression?" We've been above 8% unemployment for 43 straight months. Unemployment went down to 8.1% only because nearly 400,000 people left the workforce altogether. We have fewer people working today than before Obama took office. Gas prices are up nearly $2/gallon since he took office, and his Energy Secretary, Steven Chu, claimed that the US needed European-level gas prices (roughly $7/gallon). Median income has dropped. House prices are down. More people than ever before are on some kind of government assistance. Obama and the Democrats had two years of full Democrat control of government, and I promise you things are not better. On an individual basis, some people are better off. I am personally better off than four years ago, but that's not because of Obama. Unless you buy his crap about jobs created or saved, in which case he could argue he saved every job in the US. But on a national level, we are not better off. Even Democrat politicians told us we weren't before they got their marching orders from the DNC and all changed their tune.

And don't hero-worship Obama. You speak of him as if he should be praised. Hardly anyone uses language like "...disparage the one person that saved this country..."

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nicholson 1 year, 7 months ago

Obama did not save this country, nor did he really save GM or Chrysler. The only thing he saved were the unions. Even Michael Moore, the ultra left leaning film maker & Obama supporter, was quoted recently as saying Obama did not save Detroit - "These cities in Michigan are about the people who live here, and in the process of 'saving Detroit,' Mr. Obama had to fire thousands of these people, and reduce the benefits and pensions of those who were left." Mr. Moore went on to say ""There's a lot of pissed off people in Michigan (and Wisconsin and Ohio), people who weren't saved even though the corporation was. I'm just stating a fact, and those of you who don't live here should know this." How ironic that Obama did the same thing he accuses Mitt Romney of at Bain Capital.

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news2me 1 year, 7 months ago

I don't trust people that identify themselves by their admiration for cats. Cats are sneaky animals. Maybe if you were a dog person I would bother to read your comments.

By the way, I don't read comments from drooling smiley faces either. Childish monikers and avitars lack credibility.

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Say_that_again 1 year, 7 months ago

So you think that it is better to listen to someone that focus on insults instead of facts - Now that is funny! Thanks for the laugh.

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news2me 1 year, 7 months ago

Say_that, you are the Queen of Insults. The only fact that is clear from any of your posts is that you worship Obama. Thanks for the laugh!

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genew 1 year, 7 months ago

Hogwash. I had to have a newer car and I used part of my savings that I had accrued before Obama was elected. Obama saving this nation?, you gotta be kidding. My financial situation has deteriorated under Obama. And my old car was a 1995 model so don't give me your rubbish about your much newer Model. Since you are obviously a Obama fan, i'll do the math for you and tell you that a 1995 model makes it over 17 years old... And the "dreaded" unions (not dreded) sacrificed new hires and approved more foreign made GM cars in order to partially preserve their benefits. GM is where it is because of arrogant unions and out to lunch management and are now of course expecting us taxpayers to bail them out.

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CD 1 year, 7 months ago

The choices were clear: GM would cease to operate and would be liquidated or the government would offer DIP financing, take an equity stake, and thus enable a restructuring.

We simply don't know what secured bondholders would have received in liquidation, but considering the turmoil in the banking industry, overall economic conditions at the time, and the fact that there would likely be few takers for an entire manufacturing complex, financing considerations aside, I doubt recovery would have been spectacular in any scenario for bondholders.

Bondholder's eventual recovery will depend on the future value of the company stock as well as the warrants received. At least there is an opportunity for upside.

Does the company face headwinds? Sure. Can it be argued there were issues of fairness? Sure.

When my cousin would come to visit when I was a young child, he would get two scoops of ice-cream while I received one. He was a guest, he was older, and I, quite frankly, was too fat. Was that fair? I'll leave that up to you.

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SuxBeanU 1 year, 7 months ago

most financial analysts have already stated that they expect GM to file for bk within 5 years of the bailout and why shouldn't they GM management must also have doubts in their ability to turn GM around because right now they have enough cash on the books to buy back their stock from the federal government , yet they won't do it. Why would any company want to have a meddlesome partner like the federal government if they did not need them? because GM management knows that as long as the federal government is still around GM can always go back to the well again , if they get in trouble. what other entity would be willing to throw good money after bad just to make themselves look good, like politicians?GM is losing market share and still don't have a vehicle in their lineup that commands buyer attention.let's face it Obama didn't bailout GM the democrat party told him to do it to buy votes and by most measures it worked fabulously, stick the taxpayers with the tab to preserve a few democrat's jobs. when Chrysler came sniffing around the Reagan Administration , they were told to find private equity, but with loans guarantees, it worked for Chrysler and it probably would have worked equally well for GM, Chrysler kept producing the same junk that caused them to lose money in the first place but, who cared, the taxpayers were not being stuck with their debt? next time I hear some democrat crying about money for education I'm going to ask them how far the money we lost on GM would have gone toward their education plan. the letter writer is correct.As a nation we just managed to pound several billion dollars down a rat hole.

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Linda 1 year, 7 months ago

My last four car purchases (latest 2006) have not been GM and when I purchase again it will not be GM. I am thankful to have a job. I am not better off financially since Obama took office. Pay cut, higher energy costs, inflation, 401k losses, home is worth 50k less than it cost 12 years ago, etc. Companies go bankrupt every day and most people don't even notice it. United Airlines for one. GM top management thought that the American people would buy whatever they manufactured, ignored the competition, what did they expect?

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news2me 1 year, 7 months ago

Government Motors is still in grave danger. Obama is praising himself on a job that is not complete. GM has not paid back the people of this country. At least the most of the banks paid back their money, in a short amount of time with interest. Michigan and GM are still a sinking ship.

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nicholson 1 year, 7 months ago

To show the total hypocrisy of Obama, just consider this report from Bloomberg that says that the Federal government was buying large numbers of GM cars in the recent months for their fleets, thus inflating the statistics of how well GM is doing. "79 % of GM’s sales increase last month was government purchased. It seems the car company he bought is being saved by Govt employees using our tax money to buy new cars. GM’s sales figures for last month were the best since 2008 , up 16% for the month of June."

Our tax dollars are being used to pump up GM’s sales figures ahead of the next quarterly report so that our Dear Leader can point to "Government Motors" as a huge success. The incestuous relationship between GM, the UAW and the Regime has never been more glaringly apparent.

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Say_that_again 1 year, 7 months ago

Wow! A Romney/Ryan supporter claiming Obama is hypocritical. Did you listen to Ryan's speech at the convention? Remember, Ryan claims to be a devout Christian and yet his speech contained numerous lies (From Ten Commandments: "Thou shalt not bear false witness"). He criticized President Obama for reductions in Medicare payments to insurance companies while his plan had the same amount cut from Medicare. Romney has switched positions on abortion so many times that it is hard to keep track of his current position. Romney/Ryan have proven that what they say cannot be trusted and yet want us to trust them on previous tax returns. Romney sends money to other countries to avoid US taxes and yet wants us to trust that he will improve jobs in America. Then there is the most absurd - even though tax cuts for the wealthy have never been demonstrated to add jobs, he insists this is the way to improve the economy. Republicans make the false claim that Obama has raised taxes on the middle class when he has actually lowered them. Then we have John Boehner public stating "Our number one priority is to defeat Obama" and yet wants to claim he is a patriot. How can you trust anyone that puts the Republican party ahead of the country? There was a time that the parties worked together for the betterment of the country but Republicans in today's house are saying no to any cooperation that might give some credit to the Democratic party. If you read the Federalist papers, you will see the warning of the founding fathers about the hazards of political parties. They thought all elections should be non partisan. With today's narrow minded Republicans, we see the problems that they predicted actually happening before our eyes.

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FordGalaxy 1 year, 7 months ago

The fact that members of the Republican party claimed their number one priority was to defeat obama bothered me. it was a stupid thing to say. But it's also a fallacy to say that only the GOP is narrow-minded. You lambast Romney for changing his opinion on an issue. i'm guessing you were okay with Obama "evolving" his opinion on issues, right? We've been over this before. Both candidates are political animals. They're going to lean whichever way the political wind blows.

You act like Romney's financial practices are horrifically illegal. These loopholes are written into the tax code. You want to take Romney's money, then simplify the tax code and close the loopholes. But raising taxes will barely make a dent in our deficit. If you were to tax everyone making more than $1 million (you know, the actual millionaires and billionaires that the Democrats so often vilify) at 100%, you could operate our current federal government for a grand total of 10 months. You still have to borrow money. The fact is, our government is spending out of control.

And about patriotism...President Obama once called George Bush "unpatriotic" for adding $4.7 Trillion to the debt over eight years. Obama has added $5.3 Trillion in less than four years. Is Obama also "unpatriotic?"

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Say_that_again 1 year, 7 months ago

It is unfortunate that often the wrong people have undue influence on our laws. I do not know if Romney broke the law, which is far too forgiving. But their is no doubt that he has actions are unethical. I have explained some of it previously. Here is an extensive explanation, if you are not too tied up with your ridiculous right wing resources that give such erroneous information as the claim that Democrats vilify millionaires or that the income of those over $1 million could only run the government for 10 months. Both statements totally false.

http://www.rollingstone.com/politics/blogs/taibblog/on-mitt-romney-bain-capital-and-private-equity-20120829

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FordGalaxy 1 year, 7 months ago

Actually, you are right about one thing. It would require taxing every income of $60k per year or higher at 100% to maintain the current rate of government spending.

And also, you say that I use only right wing sources, yet you link me to Rolling Stone, which isn't exactly neutral ground in political discussion.

You don't think Democrats unduly vilify millionaires? What do you consider the occupy movement to be? What do you consider the continual wealth envy play by Obama and his administration to be?

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Say_that_again 1 year, 7 months ago

I should also mention how this "holier than thou" party has Reince Priebus as their main spokesperson. He's the one that spoke at the convention while he obviously had one too many drinks. Then another dominate speaker, Clint Eastwood, had the full support of Republicans but he has seven children from five different women, wasn't married to all of them, and numerous affairs of the years. Don't get me wrong. I like Clint Eastwood, both his acting and directing show a great talent, but he is not a decent spokesperson for either party and his ridiculous "chair" scene might be okay at the Comedy Club, it had no place at a serious convention.

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nicholson 1 year, 7 months ago

Say that again, so you defend the use of tax dollars to pump up GM's sales figures artificially? I know you have written recently about your self described (and laughable) "intelligent googling" that you claim to do to support your rants, but please, for once, stay on topic and answer the question!

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Say_that_again 1 year, 7 months ago

The fact you want to ignore is that the federal government and local governments have bee purchasing GM vehicles for years. For this statement to have any validity, you would need to find a significant increase in the total number of vehicles purchased and an increase in the percentage of them being bought from GM. Then you would need to look at the details of the sales - if the were put out on bids for similar size and equipped vehicles and did GM just happen to present the lowest bid. Without such information, the statement that the government purchases is bolstering GM has no foundation, hence, I didn't really think it worthy of a response for anyone that has not blinded themselves from intelligent thinking through their blind trust of information from their narrow selection of sources. Just because something matches what you want to believe does not make it true.

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Say_that_again 1 year, 7 months ago

The fact you want to ignore is that the federal government and local governments have bee purchasing GM vehicles for years. For this statement to have any validity, you would need to find a significant increase in the total number of vehicles purchased and an increase in the percentage of them being bought from GM. Then you would need to look at the details of the sales - if the were put out on bids for similar size and equipped vehicles and did GM just happen to present the lowest bid. Without such information, the statement that the government purchases is bolstering GM has no foundation, hence, I didn't really think it worthy of a response for anyone that has not blinded themselves from intelligent thinking through their blind trust of information from their narrow selection of sources. Just because something matches what you want to believe does not make it true.

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nicholson 1 year, 7 months ago

Bloomberg News and Huffington Post are hardly a right wing source of information. In fact, they are liberal, so your usual response about right wing biased sources is total crap. Hmmm, why is that you never name any sources for your posts? From what high brow intellectual source did you base your allegation on that the GOP chairman was drunk? Perhaps that same source can do some investigative reporting to find out what substance "gaffe master" Joe Biden has been on all these years.

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news2me 1 year, 7 months ago

Just because something matches what you want to believe does not make it true.

You of all people need to think about that statement. You are getting your information from an Internet that is liberal to the core and a media machine in this country that is extremely left wing. The abundance of information fed to the liberal sheep is highly inaccurate. Don't let those facts get in your way drool face or cloud the undying praise and devotion for the Obama that you worship.

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nicholson 1 year, 7 months ago

You are exactly right, news2me. Notice that Say_that_again never names any sources of his so-called information from all of his "intelligent googling", while at the same time, disparaging anyone and everyone that doesn't fall in line with the rest of the liberal agenda. I do find his "you are not worthy of a response because I am so intelligent" line very amusing, considering the source.

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nicholson 1 year, 7 months ago

The posts I stated above were from Bloomberg News and Huffington Post, hardly conservative sources. Say that again, where are your sources?????????

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Say_that_again 1 year, 7 months ago

Sometimes, if a particular source seems very clearly stated, I might give a link. In general, I don't see the necessity. If I desire to respond to false claims, I first research so I have a clear understanding of the facts. I do not limit myself to a single source. You should do the same. If I spoon feed the information, you will not learn as much. I did go back and look at your comments for the last 6 months and found only twice that you offered supporting links for your statements. If you really want me to give you links, then at least prove you have tried to do the research by supplying some yourself. I only disparage those that echo the ridiculous rhetoric that comes from people like Bill O'Reilly.

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nicholson 1 year, 7 months ago

Typical liberal - do as I say, not as I do. You still will not answer the question directly. It is very obvious that you have no credible sources whatsover. Enough said.

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Say_that_again 1 year, 7 months ago

Let me get this straight. You do not get your information from the media because you have been convinced that it is liberal and you ignore data from anywhere on the internet because it is liberal to the core in your narrow vision of the world, therefore anyone that does any real research must only be getting misinformation planted by liberals. So that leaves one to conclude that you are forced to resort to insults to defend a position for which their are no supporting facts.

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news2me 1 year, 7 months ago

I only disparage those that echo the ridiculous rhetoric that comes from people like Bill O'Reilly.

So you get your information from Fox News? How else would you know so-called O'Reilly rhetoric unless you watch him yourself? You libs really need to stop watching Fox and listening to Hannity, then scouring the liberal media to suit your needs.

You want to give credit to Obama for saving GM, fine! GM is still a sinking dinosaur just like your Obama is a falling prophet. I guess GM is more important than what Bush did to help re-build our country after 9/11 and to bailout the banks (that have mostly paid back their money with interest).

In the say_that_again mindset, GM is more important than 9/11 and the financial institutions in this county. Got it! Understood, oh drooly icon!

Plug up that leaky brain and Thanks for the morning laugh!

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kevin 1 year, 7 months ago

Despite the fact my tax money went to these "broken" union-controlled car companies, I would never buy a car from any that got stimulus money. Period. I just laugh at those cars on the road when I see one from those companies. I prefer non-union made cars.

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