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This is entirely untrue, pertaining GM. We tax payers lost tremendous money on GM[1], and then GM restructured (think "good bank bad bank"[2] style nonsense) in
by mangeletti 11y ago
This is entirely untrue, pertaining GM. We tax payers lost tremendous money on GM[1], and then GM restructured (think "good bank bad bank"[2] style nonsense) in a clever way to ensure that we would never reap the benefits of the future success of "GM".
1. http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA3T0MR20140430 http://www.reuters.com/article/us-autos-gm-treasury-idUSBREA...
2. https://en.wikipedia.org/wiki/Bad_bank https://en.wikipedia.org/wiki/Bad_bank
- tomasien 11y agoGood point! Very good point - I still think investing in innovation is the only thing that makes sense for GM, the reason the auto bailout worked out is because Ford*, for example, did and is crushing it. http://www.nytimes.com/2014/12/20/business/us-signals-end-of-bailouts-of-automakers-and-wall-street.html?_r=0 http://www.nytimes.com/2014/12/20/business/us-signals-end-of... Edit: Ford did not take bailout money so that logically does not hold like I thought it did. Point about innovating still holds fine.
- j2bax 11y agoI was under the impression that Ford was the only one that didn't take a bailout.
- wavefunction 11y agoYou are correct.
- cgy1 11y agoIIRC Ford actually got very lucky in that they were actually in huge trouble before the market crash and decided to mortgage the company right before the credit market seized up. So that was really why they didn't need to take the bailout.
- georgeecollins 11y agoI would argue they were also better run than GM during this period.
- mrtron 11y agoCanada lost about 3.5B[1] on the bailouts to GM and Chrysler as well. [1] http://www.theglobeandmail.com/report-on-business/canadian-taxpayers-lose-35-billion-on-2009-bailout-of-auto-firms/article23828543/ http://www.theglobeandmail.com/report-on-business/canadian-t...
- bduerst 11y agoThat's because in 2009, G.M. filed one of the biggest Ch. 11 bankruptcies in history, which the bailouts failed to prevent.
- maxerickson 11y agoDidn't the government take a 61% percent stake in the good bank part of the company? Wikipedia links this WSJ article on the topic: http://www.wsj.com/articles/SB124646098696280443 http://www.wsj.com/articles/SB124646098696280443 The second paragraph mentions the US government being the majority owner of the new company. Am I misunderstanding which clever restructuring you are talking about?
- deleted 11y ago[deleted]