[Supermans]

Originally Posted by fbodfather

Supermans -

There is simply too much misinformation out there --

a few thoughts: (and up front, I need to disclose a few things: 1. - these are my views and not necessarily those of the company for whom I work ...

2. the older I get, the more I realize what I DON'T know - and --

3. Most people don't know much about what's really happened to this industry over the past 40 years - -and it isn't 'simple' - rather, it's hugely complicated.....

Now - there is more misinformation out there than there is good information.

The loan was paid in full with interest.

There was no money out there to be raised due to the credit crunch - so we gave YOU the taxpayer 60+ percent of the company in exchange for working capital.

The Obama administration is not involved in the day-to-day running of the business.....and in fact, there's a good argument that looking closer at the auto industry opened many eyes in Washington - something that sorely needed to happen.......

There are several industry experts and financial experts that feel that YOU the taxpayer, may have made a good investment.

Go look at Ford Stock and what's happened to it over the past year.....and they don't have the cost savings that GM does......

It's very likely that GM will start to make some serious money - and soon. Further, once the IPO goes out, the government can then sell the stock -- and hopefully it will be a very good investment.

Now - many have said something along the lines that "GM should have been forced into bankruptcy and the government should not have loaned them money." OK - that would have resulted in Chapter 7 in all likelihood simply because there were no avenues to borrow money. You can go into bankruptcy -- but the reality is that the auto industry is a VERY capital intensive business. If the banks aren't loaning money - -something's gotta give.......and so it was a case of getting loans from the goverment and in return, giving the government a percentage of the business -- or starve for capital -- and that usually means chapter 7.

Ford, on the other hand, had mortgaged everything including the staplers on the desks a few years ago -- when funds were still available to borrow on the open market - and whoever made that decision is a genius or lucky or both........so they were able to weather the downturn. (.. i sure hope whoever it was that made that decision was given a good sized bonus -- he/she deserves it!)

Keep one thing in mind as you look at this entire situation:

Americans bought approx. 16 million new cars and trucks a year until the bottom fell out due to the housing market and the drying up of capital. Now - that 'pie' of 16 million units per year over a 4-5 year period kept getting sliced up by more and more competition from overseas competitors.....and in some cases, competitors that have, for all intents and purposes - a closed market. Suddenly, that 16 million units a year drops to 9 million units a year - and no one can sustain that drop for an extended period of time.

Now - some would say "well - -you signed the contracts with the unions!" - and it isn't quite that simple. Go look at the summer of 1998 to see what happened to the economy when there was a strike.

Should you buy a GM car or truck? I'll let the others on this board give their opinions...... I'd like you to consider GM and Ford and Chrysler as your provider of all your transportation needs........

By the way -- speaking of giving money away -- you might want to look at the deal that Mr. Shelby of Alabama gave to a couple of foreign car manufacturers -- and they don't have to pay it back!

I guess if I were to give advice:

>go drive our cars and trucks - and then go talk with those who have bought our cars and trucks in the past couple of years......

>remember - -it's YOU -- the taxpayer - who have invested in GM and Chrysler.....

And finally - -perhaps it's prudent to keep an open mind until you get all of the facts.


(......oh -- and one last fact: The stock you refer to at 75 cents or whatever is for the OLD GM - not the new one........)

Fbodfather,

Read this article and then comment whether or not GM's advertising department along with top GM and Obama admin officials were implementing propaganda or in nicer terms deceptive advertising with the GM commercial? You already defended in your post above the commercial and it's main statement that the loan has been paid back in full with interest. What will it take for you to be willing to stand up against this type of deceptive advertising or will you defend every move your own company does, even if it is propaganda and deceptive. thanks..

http://www.washingtonexaminer.com/op...-92788939.html

GM named in deceptive advertising complaint filed with FTC
By: Mark Tapscott
Editorial Page Editor
05/04/10 2:22 PM EDT
General Motors Co. on Wednesday, April 7, 2010 said it lost $4.3 billion in the last half of 2009 as it struggled to emerge from bankruptcy protection, repay government loans and cope with a severe downturn in U.S. sales.

A prominent conservative Washington activist think tank has filed a complaint with the Federal Trade Commission against General Motors' nationally advertised claim that it has repaid its government bailout loan "in full, with interest, five years ahead of schedule."

The Competitive Enterprise Institute (CEI) argues in its FTC filing that GM's claim is misleading to consumers, and factually inaccurate, and therefore violates the Federal Trade Commission Act.

"Most consumers would reasonably interpret GM’s ads as meaning both that GM has paid back all the money that it received from the government, and that those repayments were made with its own funds rather than with other government funds.

"Neither of these interpretations is accurate. While GM might argue that its ads are literally correct, they are deceptive within the meaning of the FTC Act because they leave a misleading impression with consumers."

The problem, according to CEI in its complaint, as well as a wide swath of financial and political analysts and media outlets, is simple: GM's repayment of one of its government loans was made with funds the company received from another government loan as part of its $49.5 billion bailout deal last year.

The bailout included $49.5 billion committed to GM through the U.S. Department of Treasury’s Automotive Industry Financing Program. The government got back from in return for the bailout a controlling 60.8 percent common equity stake in GM, plus $2.1 billion in preferred stock, and $7.1 billion in additional GM debt.

Treasury officials put $17.4 billion of the $49.5 billion in an escrow account, which required GM to obtain Treasury’s approval before making withdrawals. Since the repayment described by GM head Ed Whitacre in the television spots came from this escrow account, the government approved the withdrawal for that purpose.

In fact, Treasury Secretary Timothy Geithner issued a statement praising GM's repayment "in full" and cited it as evidence that the Obama administration's economy recovery progam was working as intended for the automaker.

CEI said in its complaint that GM's ads sought to make consumers think the company has returned to profitability when in fact it has not. (The company reported last month that it lost $4.3 billion in the second half of 2009):

"GM’s ads also leave the false impression that it is on the road to profitability, since it is now able to pay off its debts. (In public statements, GM deliberately sought to reinforce that impression by linking the “repayment” to increased sales of two cars produced by GM.)

"In reality, however, GM used taxpayer money to make the repayment -- government bailout money from the Troubled Asset Relief Program -- and it was still losing money at the time of the advertisement.

"This false impression matters to consumers, and affects their purchasing decisions, because a profitable automaker, unlike an automaker that goes out of business, can provide replacement parts for an automobile that a consumer purchased. And unlike a bankrupt automaker, it can be counted on to make good on its warranties."

You can read the full CEI complaint here. Neither the FTC nor GM has offered any comment on the complaint.

See also Examiner editorials here and here. And CEI's Hans Bader who with CEI General Counsel Sam Kazman filed the FTC complaint, has a comprehensive assessment of the GM situation, including a bunch of links for virtually every significant turn of events since the bailouts were first proposed during the Bush administration.

Read more at the Washington Examiner: http://www.washingtonexaminer.com/op...#ixzz0mziEtOKq