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Posts Tagged ‘obama auto bailout’

GM Says it Didn’t Ask Feds to Sell its Stock

Treasury in no rush to "dump" GM shares.

by on Sep.18, 2012

The government plans to look for the most opportune time to sell, a Treasury official stressed.

General Motors is denying a report that it pressed the White House to sell off the remaining shares of GM stock held by the U.S. Treasury.

Sources inside the company insist the two reluctant partners have agreed that they will wait until an acceptable and appropriate time to sell the 500.1 million shares still held as a result of the government bailout of GM that followed the maker’s emergence from bankruptcy in 2009.

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A report in the Wall Street Journal today indicated GM had pressed Washington to sell off that 26.5% stake as soon as possible, but spokesman Greg Martin insists the maker is taking the position that “it’s Treasury’s decision,” much like any other investor. And for now, a top Treasury official said there is no rush to “dump” GM stock.


Auto Bailout Cost Now Upped to $25 Billion

GM’s stock plunge adds to likely loss.

by on Aug.14, 2012

GM's performance in the stock market will determine how much of the bailout is repaid.

American taxpayers could wind up losing as much as $25 billion on the 2008 – 2009 automotive bailout, according to a new report, a figure that has increased by 15% since an earlier forecast, in large part representing the significant downturn in General Motors’ stock price.

Beginning with the outgoing Bush Administration in 2008 and continuing once Pres. Barack Obama took office the following year, the U.S. Treasury invested $85 billion to help the domestic industry survive the deep recession – primarily to fund the post-bankruptcy turnarounds at GM and Chrysler.

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But, in a report sent to Congress, the White House raised to $25.1 billion the amount it said it cannot now expect to recover – primarily by selling off the remaining 26% stake it still holds in GM.  The previous quarterly estimate was $21.7 billion. On the other hand, the latest figure is about 45% less than the $44 billion the Obama Administration had once predicted.


Obama Admin Presses Success of Auto Industry

President at D.C. Auto Show, VP Biden off to Michigan supplier.

by on Jan.31, 2012

The President checks out a Chevrolet Volt at the Washington Auto Show.

Barely a week after declaring “the U.S. Auto industry is back,” in the state-of-the-union message, President Barack Obama and VP Joe Biden took that message on the road,  the two men pressing for still more job growth – and for a political advantage in the upcoming election.

The President, who has had to defend his decision to bail out both General Motors and Chrysler, paid a visit to the annual Washington Auto Show to get a look at the latest models and to make it clear he will stand by his controversial decision.  Meanwhile, VP Biden  will be landing in Grand Rapids on Wednesday to visit an automotive supplier and promote the administration’s call for manufacturing jobs to return to the U.S.

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“It’s good to remember the fact that there were some folks who were willing to let this industry die,” Pres. Obama said during his tour of the auto show – a direct reference not only to the general position of the Republican party but specifically the stand taken by Mitt Romney, the apparent front-runner for the GOP’s presidential nomination.


Bush Considered Faster GM, Chrysler Bankruptcies

Former co-auto czar outlined options in memo to incoming Obama Administration.

by on Jan.23, 2012

Pres. Obama with former co-auto czar Lawrence Summers prior to the January 2008 inauguration.

In the end, the two failing automakers got enough cash for a temporary reprieve, the outgoing Bush Administration punting the problem of how to save General Motors and Chrysler to its successor, Barack Obama.  But a lengthy memo from former National Economic Council Director Lawrence H. Summers to the president-elect reveals Pres. George W. Bush gave serious consideration to accelerating the move to put GM and Chrysler into bankruptcy.

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The 57-page memo is revealed, for the first time, in the New Yorker magazine’s website.  Summers, who also served as co-auto czar for the new administration, penned the note on December 15, 2008, four days before Pres. Bush authorized the payment of $17.4 billion to the two makers.  He approved $25 billion for the makers and their equally troubled captive finance arms before the Obama Administration took office a month later.  In all, the automotive bailout would ultimately reach $85 billion.

The memo covered far more than just the automotive bailout, noted New Yorker’s Ryan Lizza, who termed the document, “the ur-text for economic policy-making for the Obama Administration.”


Opinion: Obama Deserves Cheers As He Tours Detroit Auto Plants

Ongoing Big Three upturn shows bailout was worth it.

by on Jul.30, 2010

Recent events should make it easier for President Obama to promote the bailout of GM and Chrysler.

Whichever side of today’s highly partisan spectrum you fall on, there’s little doubt President Barack Obama’s visit to Detroit is clearly political in nature.  But why shouldn’t it be?  In an era when the merits of almost everything the government does is debated, ad nauseum, the current occupant of the Oval Office has reason to come crowing as he tours a pair of domestic auto plants.

Despite the strong criticism leveled against the bailout of General Motors and Chrysler, last year, there’s growing evidence the tens of billions of dollars invested into the automakers was worth the risk – and that we taxpayers actually may get much, perhaps all, of our money back when the two makers go public once again.

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At a time when critics of the White House weep over the inability to generate jobs – while resisting the need to prop up those out of work – one can only imagine just how deep a hole the American economy might have toppled into had GM and Chrysler been written off.  By most accounts, 1 million jobs were directly at risk, never mind the multiplier effect their collapse would have had on the broader economy.


Supreme Court Clears Chrysler Bankruptcy Sale

Justices brush back last opponents to Fiat takeover.

by on Jun.10, 2009

The Supreme Court's decision could mean Chrysler assembly lines, like this one in Windsor, could soon start running again.

The Supreme Court's decision could mean Chrysler assembly lines could soon start running again.

The Supreme Court has brushed back what had been viewed as the last potentially serious challenge to the restructuring plan laid out by Chrysler, clearing the way for the bankrupt U.S. makers emergence from Chapter 11, and its takeover by the Italian automaker Fiat.

The plan has been blessed by the Obama Administration, which has pumped billions into Chrysler to keep the company alive, had been put on hold on Monday when Supreme Court Justice Ruth Bader Ginsburg decided to consider an appeal by the guardians of an Indiana state pension fund.  They had argued that lower courts were abrogating traditional bankruptcy law by placing unsecured creditors, such as Chrysler’s unions, in a more favorable position than secured lenders, like the pension fund.

The Court’s stay triggered fear among Chrysler’s backers that the bankruptcy plans might fall apart if the process were to drag out.  The Obama Administration has been pushing for a June 15 deadline, fearing Fiat might walk away from the deal or renegotiation it.  But critics of the plan noted that Fiat CEO Sergio Marchionne said, on Tuesday, that he would not be driven away if that deadline were missed.

Even so, Chrysler has reportedly been losing about $100 million a day while in bankruptcy court – in large part because it doesn’t plan to start its plants back up until it emerges – hastening the need to get it out of Chapter 11.  That led government representatives to insist that they would be forced, within 10 days to “either…increase (the government’s) overall funding to the detriment of taxpayers, or abandon its role in the transaction.” (more…)