US News

GM isn’t back but still on our backs

Mickey Kaus is right to highlight this Keith Crain column entitled “GM going from bad to worse” because what happens at GM actually matters to all American taxpayers who are still on the hook for the GM bailout.

Crain is really not happy with some business decision by the new GM team lead by CEO Dan Akerson. He looks at Europe as an example.

“[I]instead of trying to fix Opel, which has decades of strong recognition with Europeans, the same GM officials are adding Chevrolet into the mix and completely confusing customers,” Crain explains of the GM decision to do away with the Opel name. “It will take decades for Chevrolet to establish anywhere near the recognition that Opel has,” Crain argues.  

Meanwhile, it wsa just a few weeks ago that the headlines about GM included the words ‘turmoil’ and ‘slump’.

President Obama heralded GM as a great success story earlier this year and declared the government-owned operation “back on top”

Well, GM isn’t back and even worse, taxpayers are going to lose more money on the bailout than the Obama administration had previously promised.

Last Friday, “the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.”

And that’s not even all the bad news because the Treasury Department’s report may underestimate losses.

“The report covers predicted losses through May 31, when GM’s stock price was $22.20 a share” but last week GM shares dropped to $20.47 a share. At that price, the government would lose another $850 million on its GM bailout.

American taxpayers own 500 million shares of GM, which would have to sell at $53 each for the government to recoup its money.

Doesn’t take much insight to understand why President Obama is buying beers and talking about Romney’s dog. He’s got nothing else.