Lauded a "Successful Model of Government Intervention", GM loses $4.5 billion in Europe

  • Posted by a hidden member.
    Log in to view his profile

    Oct 15, 2012 9:45 PM GMT
    http://www.thetruthaboutcars.com/2012/10/how-the-gm-bailout-turned-into-foreign-aid/

    Before the bailout of General Motors, it was well understood that the world’s largest automaker was losing huge amounts of money in the US and was staying afloat thanks to stronger performance in overseas markets. Since the bailout, however, that dynamic has been turned on its head. Thanks to a leaner manufacturing footprint, debt eliminations and steadily recovering sales, GM’s US operations have generated the lion’s share of the company’s profit since the bailout. And now, as the rest of the world economy slows, GM is spending more and more of its taxpayer-enhanced cash pile to shore up its faltering foreign divisions. In fact, according to an analysis of GM’s SEC filings, the company is likely to incur over $6.5 billion in losses and expenditures overseas in the 2011-2014 period, not counting over $1.6b in foreign potential legal liabilities or several other incalculable expenses that could add up to billions more. Not only are these expenses a challenge to GM’s overall financial health at a time when it also faces billion-dollar expenditures on pensions in the US, it shows the basic problem with national bailouts of global companies. Taxpayers who were told they were saving an American company are now seeing their tax dollars flowing overseas by the billions.

    A full calculation of GM’s overseas expenditures since the bailout would be a daunting task indeed. Simply by scouring GM’s latest SEC filings, one finds no shortage of losses and one-time expenditures abroad. In fact, nearly every division of GM’s global empire has required some kind of assistance over the last year or so. These expenditures come in many forms, from tax assessments to investments, from bailouts to severance deals, and due to the complex nature of GM’s global finances they cannot be fully accounted with precision. But they all emphasize the reality that, after years of living off foreign operations, GM’s bailed-out North American division is now bailing out the rest of the world.
  • Posted by a hidden member.
    Log in to view his profile

    Oct 15, 2012 11:07 PM GMT
    I thought GM and Chrysler had paid back all the bailout money they received from the US and Canadian governments...ergo it isn't bailout money being sent overseas.
  • Posted by a hidden member.
    Log in to view his profile

    Oct 15, 2012 11:09 PM GMT
    beneful1 saidI thought GM and Chrysler had paid back all the bailout money they received from the US and Canadian governments...ergo it isn't bailout money being sent overseas.


    That was just an accounting trick on their end that wrote down the investment to make it appear as such.
  • Posted by a hidden member.
    Log in to view his profile

    Oct 15, 2012 11:30 PM GMT
    Osama is dead, and GM is alive, or is it??
  • conservativej...

    Posts: 2465

    Oct 16, 2012 1:06 AM GMT
    GM can't survive in Europe as Government Motors. The scale of loss s going to carry them down the tube in Europe where governments aren't purchasing tons of GM cars to keep tem afloat, much less guaranteeing the residuals at the end of a lease.