Wow, as usual the silence of the GM apologists (including the MODERATORS of this site, who should be ASHAMED of themselves for the example they are setting) is DEAFENING when confronted with the FACTS.
The following link is to a report by the Office of the Special Inspector General For the Troubled Asset Relief Program (TARP)
http://www.sigtarp.gov/reports/audit...gram_Funds.pdf
Take particular note starting on page 5. GM was given $49.5 billion dollars in accordance with the TARP program. Roughly $19 billion of this disbursement was given prior to bankruptcy and the remaining funds were dispersed during bankruptcy. What’s more (p. 5), “As of November 18, 2009, GM had used about $35.8 billion (72 percent) of the TARP funds…” The document then details how this money was spent. I won’t bore you on the details, but most of the money was spent to cover operating costs.
Regarding the $30.1 billion dispersed during the bankruptcy, a portion of the proceeds of this loan were placed in an escrow account. The escrow account was designed to ensure that the Treasury department could oversee the use of funds. The amount of funds in the escrow account totaled roughly $16.5 billion. GM used a portion of these funds, $2.8 billion, to resolve Delphi’s bankruptcy. This left a remaining balance in escrow of $13.7 billion. Further, as the report indicates (p. 6),
“GM officials stated that they intend to seek release of additional escrow funds to repay its outstanding $6.7 billion loan to Treasury and $1.3 billion to the Canadian government.”
So let's summarize.
GM received $49.5 billion — $14.5 billion pre-bankruptcy and $30.1 during bankruptcy.
Of the $30.1 billion, the $16.4 billion was placed in an escrow account.
$2.8 billion in the escrow account was used to resolve Delphi’s bankruptcy thus reducing the escrow account to $13.7 billion.
In exchange for the disbursement of $49.5 billion, the government received:
60% stake in the new GM.
$7.1 billion in interest bearing debt ($0.4 billion was paid back in July 2009).
$2.1 billion of preferred stock.
Through TARP, the government gave GM $49.5 billion in exchange for a mixture of debt and equity. The government can therefore recoup its investment by selling shares of GM stock after the release of the IPO and through the repayment of the interest bearing bonds.
What GM has done is use the TARP money that was placed in escrow by the Treasury Department to repay the remaining interest bearing debt of $6.7 billion. Given that this money was not paid for with profits earned by the company (since of course as of yet THERE ARE NO PROFITS) it is effectively a debt-for-equity swap, not a loan repayment. In other words, the Treasury approved the repayment of the loan with the escrow funds and the government therefore hopes to recover the remainder of their investment by selling common stock after GM’s initial public offering that is intended to take place this year.
Put a little more simply, this repayment of interest bearing loans was paid for with UNSPENT BAILOUT MONEY PROVIDED BY THE US TAXPAYER that was previously sitting in the aforementioned escrow account. This is NOTHING more than an ACCOUNTING GIMMICK for the SOLE purpose of PR. This is the equivalent of a consumer claiming to have "paid down" debt by transferring balances from one credit card to another.
Of course the response of the GM cheerleaders here is to simply attack the messengers, which sadly includes the moderators of this site. Yes I'm talking to you, Dragoneye (amongst others, you are certainly not the only one). Go ahead and make more inane comments about "tinfoil hats" worn by those of us "haters" who refuse to be spoon-fed smoke & mirrors from the GM PR department.
Make no mistake, I'm not challenging you to refute my arguments. I'm flat-out DEFYING you to. But alas, you've taken the higher ground and are done with all this. For those of you unfamiliar with the higher ground, it's that place where charlatans run to and hide when their BS is called out for what it is.
The facts speak for themselves. They have not been disputed. They cannot be disputed. But of course you and the rest will simply believe what you want to believe, and will shut your eyes and ears to anyone who says otherwise. Make no mistake, I love my Camaro as much as anybody on this site, ANYBODY. Mine was bought brand new in September 2001 and almost nine years later I still drive it every single day. The valves tick, the t-tops leak, the dash rattles, the leather is disintigrating, the paint is bubbling, and only three of the speakers still work. Yet I love it, and I will continue to own and drive it until the day the wheels fall right off of it. The difference between me and some (CERTAINLY not ALL) of the other fanboys, err "enthusiasts" on the site is I realize that just because someone tells me what I want to hear, doesn't mean that they're not completely and totally FOS.