GM still owes Quebec money for old camaro plant?

['11 cyber grey vert]

Quebec waiting for 1987 loan to GM to be repaid

January 4, 2012 , by Nicholas Maronese
(CBC)

Matching $110 million federal and provincial loans due 2017

The factory in St. Therese, Quebec where General Motors once put together Camaros and Firebirds is no longer standing, but the provincial loan they received for it is outstanding.

GM assembled Chevrolet Camaros, Pontiac Firebirds and other models in the plant until 2002, and in 1987 got a $110-million interest-free loan from the Quebec government to add a paint booth to it, reports the Vancouver Sun.

They haven't paid back a penny on it.

Investment Quebec is claiming the loan as a potential default — though GM claims they still plan to pay back the 25-year-old loan — and now critics and analysts are holding it up as an example of how public subsidies and loans to corporations don't make sense.

The $110-million loan from Quebec, for a new paint booth and to retool the plant to build the Oldsmobile Ciera, was matched by a similar $110 million federal loan. Both are due 2017.

An Investment Quebec official noted most debtors don't pay off a loan until it's due, so GM has time; the automaker insists they will still pay it off, said a spokesperson.

Critics say these investments favour certain companies over others, and don't demonstrably create jobs. But spokespeople for GM and Toyota confirmed potential government investment plays a major role in determining where they establish new manufacturing facilities or operations.

Are government investments in automakers absurd, or do they create jobs? Sound off below.

[Hannibal]

No need to sound off. The math always works out to the tax payer being screwed. Old news.

[Nessal]

If a for profit company requires government funding in order to operate, then it has no business in the free market.

[Russell James]

Interest free for another five years..... I'd have not paid it off yet either.

Non story, it's called business.

Not uncommon for major industries and local governments to work out deals/tax breaks/incentives... to get the industry in that location.... which equals jobs for that area and cost competitiveness for the business.

[montreal2010yellow]

I think that such loans should be paid back ASAP if the company stops operating. I live 10 minutes away from the old plant and it costed millions in unemployment for the laidoff employees, which comes from my money from my paycheck.
Now the plant is a very large shopping center where more public funds had to be paid to set it up. So this 110 millions (Quebec) could have been used to set up the new center. IMO Quebec had to pay over 300 million$ since GM shut down just to keep the ecomony rolling in that area. It use to be very good jobs, but now he they are replaced by minimum salaries.....and no interest....I wonder why the Goverment does'nt loan me some interest free money. I pay over 3 quarters of my paychheck if I include all taxes. Here gaz is almost 5,00$ a gallon (40% tax in that).
Finaly GM is wise, and our Goverment is stupid....

[ZED SLED]

They should just get the money from France, who still owes the US from the big one. It would be just like GM getting more TARP money, then giving it Quebec.

[trnsxck]

Originally Posted by '11 cyber grey vert

. Both are due 2017.

Enough said. Stupid article, just another attempted shot at the bailout.. with an election around the corner... go figure

[ravensjeff]

Originally Posted by Russell James

Interest free for another five years..... I'd have not paid it off yet either.

Non story, it's called business.

Not uncommon for major industries and local governments to work out deals/tax breaks/incentives... to get the industry in that location.... which equals jobs for that area and cost competitiveness for the business.

This is the bottom line here. A deal is a deal. They have 5 more years.

[United_727]

Sad that it is a shopping center . I went on a tour there in Oct. '98.

[cam99]

They should have put a payment structure in the contract if they wanted to be getting paid back in installments. If they left it as an open ended no interest loan that needed to be paid off by 2017, but no guidelines as to how it will be paid back then thats their mistake. Of course GM will take it, use somebody elses money for decades, then worry about it. They will surely just settle the loan for much less than the original amount if they pay it back at all.

[My 5th]

Isn't it OLD GM that owes the money? If so, they can just skip out on the loan--they're bankrupt. Obama said it was OK to violate the bankruptcy laws to screw the Old GM bondholders and favor the unions, so why should a government be any different than a bondholder? Both were allegedly "secured" in their debt, but with one wave of the magic wand that "security" gets blown away.

Isn't government controlled capitalism wonderful?

[orbitearl]

not due yet Chrysler never paid there first bail out back