GM to start repaying government loan -- sort of
General Motors -- the former Detroit giant that you, the taxpayer, now own 61 percent of -- said it will start repaying government loans to the tune of $6.7 billion.
Wow. That's a great headline, right? GM's ready to start paying back the bailout money you lent the automaker. (Did you get a vote on that bailout, by the way? I can't seem to remember . . . oh, that's right. You didn't.)
Dig a little deeper into the headline, though, and you won't be so impressed.
GM actually said it is going to start giving back $6.7 billion the government placed in an escrow account for the automaker as a contingency, in case things got worse.
That's part of the $52 billion the government has plowed into GM, which went through a government-backed bankruptcy earlier this year.
Well, things didn't get worse -- so GM said it could start "repaying" the $6.7 billion contingency fund with a $1.2 billion "payment" in December, and add additional "payments" until the total amount is "paid off" over the next eight quarters.
Sorry for all the ironic "quote marks," but I think you get the point I'm trying to make. Don't misinterpret the $6.7 billion give-back to the government as a sign that GM -- which you own -- is back on its feet. What it means is that GM didn't sink as low as it thought it might and the government feared it would, and that's cold comfort at best.
-- Frank Ahrens
Sign up to get The Ticker on Twitter
November 16, 2009; 11:01 AM ET
Categories: The Ticker | Tags: GM, General Motors, bailout
Save & Share: Previous: Key shipping index nearing Sept. 2008 highs
Next: Stocks slightly off following wholesale inflation report
Posted by: Heerman532 | November 16, 2009 12:11 PM | Report abuse
Posted by: bsallamack | November 16, 2009 12:17 PM | Report abuse
Posted by: sucker_taxpayer | November 16, 2009 12:58 PM | Report abuse
Posted by: eurydice9276 | November 17, 2009 9:59 AM | Report abuse
The comments to this entry are closed.