Robert Scheer on the GM bailout: Some jobs were saved, but don't call it a success story.

[brentspeak]

http://www.truthdig.com/report/item/fail_and_grow_rich_on_wall_street_20101124/

...the plant that GM is reopening in Orion Township, Mich., where, under a deal negotiated with the beleaguered UAW union, 40 percent of the workers crawling through cars on the assembly line will be paid 15 bucks an hour. That’s about half the traditional UAW wage.

The Obama administration now feels totally vindicated for bailing out GM. Such a deal. Let’s offer up half a clap for the news that GM came back from bankruptcy to mount a successful IPO and pay something back to the taxpayers, which is better than nothing. Some jobs were saved, and that prospect was why folks like me supported this bailout in the first place.

Don’t call it a success story: The government unloaded some of its GM stock holdings at a $10.67 loss over the average per-share price it paid for its $49.5 billion investment. As the Bloomberg news service noted, “The Treasury, which is taking a loss on its portion of the sale, will break even only if the shares climb more than 60%,” referring to the GM shares the Treasury still holds.

Nor should we ignore the fact that GM is a shadow of its former self and its rosier prospects for long-term survival depend primarily on job creation in China, where GM is already a major presence. Or that GMAC, the carmaker’s former credit operation, is still majority-owned by the U.S. government and is busily foreclosing on the homes of people they hustled into subprime and otherwise dubious mortgages...The assumption of both the Bush and Obama administrations was that what was good for the banks would be good for the general economy, but just the opposite has happened. While the financial sector flourishes, the economy stagnates. As The Wall Street Journal reported in its story on the release of the Fed minutes: “Federal Reserve officials downgraded their outlook for the U.S. economy … projecting that the jobless rate could exceed 8% for two more years and that it won’t return to its former vitality for five years or more.”

[OlympicBrian]

1. So, let's get some facts and figures...

1. What percentage of GM employees remain in the US?

2. What are the capital investment plans for GM, over the next few years, expressed as the ratio of:

(direct investment dollars into US / direct investment dollars into foreign affiliates and partnerships)

Included foreign re-invested profits in the above ratio.

[Kennah]

2. A few thoughts in response to Robert Scheer

If the Treasury does not break even on the GM bailout for 20-30 years, how does that compare to the price of hundreds of thousands, if not millions, more on the unemployment rolls, potentially for years?

Yes, GM is a shadow of its former self. However, that's the future of the auto industry. Despite the Chevy Volt, GM still has a long road to go before it can be considered a reformed corporation in a world where $4 and $5 a gallon gas will again soon become the norm. If the Volt is merely a trump card in the CAFE game to sell more Escalades, as Bob Lutz once hinted, then GM is toast. OTOH, if GM has turned, and they truly see their future building smaller, more fuel efficient vehicles in American plants, building more hybrids, better hybrids, advanced hybrids, and EVs, GM will still contract. It's no different for the rest of the Detroit 2.5

On job creation in China, this is a problem persistent throughout the economy, not just the auto industry. Unless radical tax, tariff and trade policy reforms come to pass that lead to a rebuilding of the domestic manufacturing base and protecting it, we're toast as a first world economy.

GMAC got billions under TARP that hasn't been repaid, just like AIG. Can someone recap for me how much TARP money AIG has repaid?

Obama does unfortunately appear not to be nearly as progressive as was promised. However, to quote Ralph Nader, there is a slim glimmer of hope for the Democratic Party and no hope whatsoever for the Republican Party. Pick your tick and flea infested dog and lie down with it.

Trickle down? Not working? Really. I'm shocked, shocked I say, shocked, to learn that 30 years of trickle down economics has proven to be an abject failure.

[jberryhill]

3. Woefully incomplete analysis....

"a $10.67 loss over the average per-share price"

...along with a 100% gain by taxing wages that wouldn't otherwise exist, along with every step of every dollar in those paychecks.

[still_one]

6. absolutely, along with the fact that suppliers were saved also as a result of it /nt

[bertman]

4. Who could ever have guessed that giving trillions to the GREEDIEST PEOPLE

on the planet would not help the average working American?!

For further details go see the movie, Inside Job.

Rec.

[still_one]

5. Bull. It wasn't just GM and the jobs at GM, it also was suppliers, dealerships, and the very real

possibility that others were going to be affected in a big way

Under the circumstances it was a success. If it was up to the repukes there would not be any GM, and who knows what other companies would have been taken down as a result of this

I don't see you talking about the "cash for clunkers" which also saved some dealerships, and local businesses.

[Milo_Bloom]

7. I wonder how long till the next bailout?

GM didn't even actually turn itself around at all. The "profits" they currently show are a sham.. it is a result of not having to count LOSSES, since the losses are being covered by government money. This is the exact same scam pulled using the tarp money.

Banks/GM were able to take losses off the books for several months and thus suddenly started showing PROFITS (amazing how that happens when your expenses drop from borrowed money!). They then used the reports of "profits" to issue more shares and raise money.

It's a con game.

[impik]

8. 1.4 million jobs were saved, and that's a conservative estimate. BS article. Bunch of liars

from right AND left.

[ProSense]

9. I know Obama won the election

but let's not pretend he's the first African American to become President. The denial (or BS) is thick.

White House White Board: The Rebirth of the American Auto Industry

[jefferson_dem]

10. So maintaining solvency of the US auto-making market was actually NOT a good thing?

I'm seriously starting to question the rationality of some of these so-called critics...and those who buy and amplify their pablum.

[dionysus]

12. no, it was terrible. we need to vote against him immediately, forever...

;)

it's funny to see, however, the same people who tossed out "messiah" and "cultists", as insults, think the guy should have been able to do messiah and godly things to reverse 30 years of shit in 2....

[dionysus]

11. at long last, you have no shame. none at at all

:thumbsdown:

[inna]

14. projection,

"dionysus".

:thumbsdown:

[amborin]

13. Non-Union G.M. Plants now, in Michigan.....the UAW was broken

[jenmito]

15. Do you EVER have anything positive to post about Obama or his admin.? n/t