We have all heard CEO Ed Whitacre bragging how GM has paid back the bailout loan from the government with interest five years ahead of schedule. This is pure deception at its best. GM actually borrowed $49.8 billion from taxpayers last summer. The Obama administration only gave GM a $6.7 billion low interest loan with the remainder as 60.8 percent equity in the company — making it an even worse deal for the taxpayers than the loan.
When Mr. Whitacre says they paid back the bailout money in full, he does not mean the full $49.5 billion. He actually only means the $6.7 billion loan. GM has yet to make a profit since the bailout and it looks like our government will continue to own a majority of the company for some time to come. The only reason they are touting the payback is so they can borrow further funds for necessary retooling to meet tougher fuel efficiency standards.
The Obama administration put $13.4 billion of the bailout money into an escrow account to use as working capital and they are using these funds to pay back the loan. Can you say smoke and mirrors? The truth is that GM will probably never be able to pay back the entire loan amount. The government will have to sell off itsr 60.8 percent share in the company for that to happen. Fat chance in this bad economic atmosphere.
GM is using taxpayer money to pay back taxpayer money so it can get more taxpayer money.
Don Williamson
Arlington
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