GM begins to pay back government bailout loans

[HamdenRice]

http://www.nytimes.com/2009/11/17/business/17auto.html

G.M. Shows Signs of Recovery Despite New Loss

By BILL VLASIC
Published: November 16, 2009

DETROIT — General Motors, whose very survival was in doubt this year, is showing signs of life after its brief tour through bankruptcy this summer.

G.M. said Monday that while it was still losing money, it had stabilized enough that it could take an important symbolic step and begin returning some of the $50 billion that the federal government provided to help give it a second chance.

The Obama administration said it was “encouraged” by G.M.’s initial performance since emerging from bankruptcy in July.

Others who had supported a G.M. bailout, despite widespread skepticism that the company’s problems were too big and numerous to fix, said G.M. had taken a big step toward a lasting recovery.

“The company is on its way to fulfilling its promise to American taxpayers,” said Representative John D. Dingell, Democrat of Michigan.

<end quote>

A shoutout to all those auto workers and auto parts workers whose jobs were saved!

[ellie]

1. Kicking for the good news

I look forward to reading this thread later today.

[HamdenRice]

2. Hopefully it will gain some traction before the "let it fail!" crowd shows up.

I'm hopeful because I posted it in GD-P rather than GD.

[UnseenUndergrad]

11. I've kinda noticed that.

GDP is filled with threads that should be going in GD, but the authors may be too frightened of wallowing into that mudpit.

Look, I like Kucinich's ideals (as a Canadian New Democrat, how can't I?), but I'm afraid the guy may be going a bit politically senile. That kind of take-no bullshit integrity is a great thing... except in the congress, where, unfortunately, bullshit and compromise grease the gears of government action, even on the good stuff.

Loved the state-by-state single payer idea... but with your countries political allignment, the man may be a better policy wonk than an actual legislator (sorry to say)

[Jennicut]

3. Good to see they can actually start to do this.

If GM is stabilizing, then we did the right thing.

[earthside]

4. How Stupid

Let's see, they lost $1.5 billion last quarter, but they're pulling some lint out of their pocket to "symbolically" repay some of the bailout money?

I'm underwhelmed.

This is exactly the kind of ham-handed, public relations maneuver that drove GM into bankruptcy.

Better that they start selling some cars without the help of tax rebates, return to real profitability ... and then repay the taxpayer's loan.

[Truth2Tell]

12. Some seem to think we are too stupid

to notice.

[Kdillard]

5. Good news hopefully GM will continue making strides in a

Positive direction.

[LeftHandPath]

6. Deceptive wording

First, GM is no longer a public company, so they do not have to abide by public accounting standards.

In other words, they are lying (again).

Second, they aren't paying anything back, they just haven't used all the bailout. They are using their bailout money to 'pay' us back.

Kinda like using borrowed TARP funds to pay down the deficit.

[HamdenRice]

7. Only possible response to your post: WTF???

GM is not a public company? Then why did they file these:

http://www.gm.com/corporate/investor_information/sec/

Nov 16, 2009 8-K Report of unscheduled material events or corporate event
Nov 9, 2009 8-K Report of unscheduled material events or corporate event
Nov 9, 2009 8-K Report of unscheduled material events or corporate event

By definition, if they are still filing, they are a public company.

As for your second point, money is fungible. They admit that they had a loss -- but much smaller than it would have been -- so they can pay back the bailout money from generic funds.

[LeftHandPath]

8. GM is bankrupt, and is being liquidated.

Care to give me a quote on GM's publically traded stock price?

You cant, because they no longer exist as a public corporation.

https://www.motorsliquidation.com/

Not trying to be a dick, but GM is not a public company any longer.

If you take $20k as a cash advance on your credit card, does that count as income?

No? So why would it count as income for GM?

[OhioBlue]

9. First of all...

who said the Government money counted as income? It is cash on hand and if they don't have to use that cash on hand and can repay the loan - that is a good thing.

[Zynx]

10. Just because they aren't a public company anymore doesn't mean they aren't using legitimate

accounting.

[HamdenRice]

13. Stock isn't the only type of security GM has outstanding

You seem not to understand what a "public company" is and the relationship between being public and having its common stock listed on an exchange.

Stocks, bonds, debentures, notes and all other securities a corporation issues must be registered with the SEC for those securities to be easily sold to the public and resold. Just because its common stock has been delisted doesn't mean it has no other securities registered and doesn't mean it's no longer a public company. In fact, many modern corporations issue more securities other than common stock, than common stock.

If fact, when a corporation goes through bankruptcy reorganization, it's likely to remain registered with the SEC and therefore a public company, because it needs to issue new securities as each class of securities is replaced with a security that is junior.

Also GM is not being liquidated; it's being reorganized. There is bankruptcy liquidation and bankruptcy reorganization. The whole point of the bailout was to enable GM to undergo reorganization, which means that part of the company will continue going forward, enabling it to employ auto workers, and make and sell cars.

GM is still filing with the SEC. Therefore it is still a public company. If it weren't a public company, it wouldn't still be filing with the SEC, and it could not easily sell its post bankruptcy debt securities.

Moreover, as someone else pointed out upthread, even if it had became private and unregistered, which it didn't, that doesn't mean it would cease to be audited in accordance with GAAP.