News was all a buzz these last few days that General Motors was able to repay the bailout funds to the government. The suggestion was that now the economy is so great and expanding so fast that even the former near-bankrupt GM is now making money hands-over-fist enough to repay the government for its bailout funds.
Yet, hardly anyone mentioned that the repayment was only for 13% of the total bailout package that GM received. And, I noticed that the numbers don't quite add up. Sweetness and Light noticed.
General Motors Co. has repaid the $8.1 billion in loans it got from the U.S. and Canadian governments, a move its CEO says is a sign automaker is on the road to recovery.
GM got a total of $52 billion from the U.S. government and $9.5 billion from the Canadian and Ontario governments as it went through bankruptcy protection last year. The U.S. considered as a loan $6.7 billion of the aid, while the Canadian governments held $1.4 billion in loans.
And, they will invest over $250 million to retrofit 2 autoplants in order to produce their Malibu cars.
Where'd all this money come from? Seems really strange considering this bit of news:
GM lost $3.4 billion in the fourth quarter of 2009 on revenues of $32.3 billion.
So, they lost $3.4 billion dollars but was able to invest over $250 million for remodeling 2 plants and to give the FEDS $8.1 billion to start repaying their loans off. Ok? Are those funny numbers?
YES. And the FEDS noticed.
A top Senate Republican on Thursday accused the Obama administration of misleading taxpayers about General Motors' loan repayment, saying the struggling auto giant was only able to repay its bailout money by dipping into a separate pot of bailout money.
Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout -- also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.
"It appears to be nothing more than an elaborate TARP money shuffle," Grassley, the ranking Republican on the Senate Finance Committee, said in a letter Thursday to Treasury Secretary Timothy Geithner.
But Grassley said in his letter that a Securities and Exchange Commission form filed by GM showed that $6.7 billion of the tens of billions the company received was sitting in an escrow account and available to be used for repayment. He called on Geithner to provide more information about why the company was allowed to use bailout money to repay bailout money, and how much of the remaining escrow money GM would be allowed to keep.
"The bottom line seems to be that the TARP loans were 'repaid' with other TARP funds in a Treasury escrow account.
Doesn't sound like GM was in as bad a shape as they suggested. If they can buy automobile plants in S. America, remodel plants around this nation and Europe, and hold on to $14.8 billion remain in an escrow account.... then you know they are doing just fine.
And yet, the government took them over and gave them billions of free and easy money in return.
Tell ya what. I ain't buyin' another GM vehicle again.