Taxpayers pay for $49,000 of the $89,000 dollars it cost to build a Chevy Volt. Sound like a good deal to you? That President Obama really wasn't joking when he said energy costs will have to sky-rocket was he? What a joke. See what happens when we rely on government?
Talk about green vehicles! $89,000 is a lot of green!
Here is a source:
http://www.reuters.com/article/2012/09/ … 4J20120910
At the end, it shows estimates around $75-$89k for each unit.
That's probably counting the $2.4 billion in subsidies GM got to develop it.
I have a real problem with allowing the general public to be fooled. From the Chevy Volt to "green light bulbs which are lethal" - where is the common sense? If something is cheaper today and yet in its life expectancy it costs us more, shouldn't the consumer be warned?
Where is the protection for the consumer in all of this? Why do we have "agencies" assigned and nothing is being done to provide common sense?
We initiated truth in lending, we need "truth in total cost".
This is just inhibiting the market's ability to create better environmentally friendly vehicles. The people who came up with this clearly know this, they're just interested in keeping Chevy in business.
Isn't it amazing how well GM can do, when its sales are subsidized by taxpayers, when it gets tax refunds which are subsidized by taxpayers, and a sweetheart deal to file bankruptcy, which was subsidized by taxpayers?
The public at large will never understand that though. People see Obama talking about GM, and they think how wonderful it is that he saved GM from bankruptcy(except for the part where it filed bankruptcy). They think it's so lovely that GM paid the government back(except for the $50-$100 billion that it will never pay back).
But, but, but...some of my lib pals say Obama SAVED GM from bankruptcy...
Yeah, I know right? Like, weird right?
I seem to remember both Obama and Biden criticizing Romney for his suggestion that GM go through bankruptcy...
I have been glad to see a small few number of new agencies actually pick up on that fact, but most of them can't grasp it.
I wouldn't be nearly as upset over the whole thing if:
1 - The unions hadn't gotten preferential treatment.
2 - GM wasn't allowed to carry it's losses after the bankruptcy(Total bill to taxpayers: $45 billion)
3 - Bankruptcy proceedings had started sooner, rather than throwing cash at a failing business.
4 - Obama taking credit for saving GM with the bailout, which Bush started, which didn't work.
5 - The government had started a slow sell-off of shares from the outset. Holding onto the shares keeps the price of GM stock artificially low, which has negative affects on the company. The price will never even get close to fair market value while the government holds its' shares.
... among other things, lol.
"1 - The unions hadn't gotten preferential treatment."
Union members took big wage and benefit cuts which made GM, Ford and Chrysler pretty much cost competitive with the non-union foreign transplants in the South.
"Obama taking credit for saving GM with the bailout, which Bush started, which didn't work."
Who do you think deserves credit for saving GM and Chrysler?
"Holding onto the shares keeps the price of GM stock artificially low, which has negative affects on the company. The price will never even get close to fair market value while the government holds its' shares."
That's a curious claim. It appears to me that if the government dumped its GM stock the price would plummet. Please explain.
http://online.wsj.com/article/SB1000142 … 80454.html
Not really. The unions got preferential treatment in more ways than one.
The credit shouldn't go to the bailout funds. Those didn't work for GM and Chrysler. They went bankrupt.
Obama acts like the bailout saved them from bankruptcy, but it didn't. Why should Obama, or Bush, get credit for throwing billions of dollars at failing businesses to give them a chance to turn things around, and then having the businesses go bankrupt anyway?
Exactly. The price won't achieve fair market value, because if the government dumps its stock, the price will plummet. Who wants to invest in a stock that could lose 30% or more of it's value overnight? Obama won't even release a plan for how the government will exit its position. If they did that, at least the market could prepare for it.
The threat of a huge sell-off keeps the price low, and will until the government either sells it's stock, or releases a plan(preferably backed by law, so it must keep to the plan) of how it will exit.
I expect the Obama administration is still hoping for a better price if things go well for GM. Moreover, I'm sure they wouldn't want to take a big loss now with the election coming up.
You're right about not wanting to take a loss, but look at the price. GM has a P/E ratio under 9, with a 4%+ profit margin... that should be more like 15-20, not 9.
Yes, the stock could go up, but it's not even going to approach fair value until the government no longer has so many shares it is waiting to dump on the market.
"I seem to remember both Obama and Biden criticizing Romney for his suggestion that GM go through bankruptcy..."
Bankruptcy would have been fatal for GM and Chrysler because the government was the only available source for financing needed to save them. Private sources had dried up completely because of the worldwide economic meltdown. This would have visited chaos and disaster on auto related jobs all over the country. It also would have affected Ford due to supplier relationships.
1 - Private equity hadn't dried up... PE firms still had money. Nobody approached them, nobody looked.
2 - The government could have financed the bankruptcy right away, instead of throwing billions and billions at failing companies. It would have been cheaper than what happened.
That's baloney. The truth is that money required to bail out GM was not available according to every source I've seen, and being a GM retiree who lives in Detroit, I followed the situation quite carefully. There was zero interest in funding GM from any private source. Ford had the foresight to establish some big credit lines before the financial meltdown.
How do you feel about Bush's AIG bailout that went straight into the greedy pockets at Goldman Sachs? At least the GM and Chrysler bailout saved a million jobs.
Did GM approach anyone? I hadn't heard that they did. I'm fairly certain they could have had the backing they would have needed, even if they had to broker a deal with half a dozen large firms.
But, as I said, even without the private money, it would have been better for the government to just finance it right away instead of throwing money away.
I'm not a fan of bailouts period. They are an extremely dangerous precedent to set and continue, that could have negative consequences far worse than otherwise.
GM was desparate. Waggoner was looking for money everywhere. If he could have succeeded he might have continued as CEO which wouldn't have been good because he was ill-equipped to take the necessary steps for a recovery.
Can you provide sources that he approached large private equity firms? It's not the crux of my argument, I just never heard about it.
No, I don't have time to look up articles from the business section of Detroit papers three years ago. Aside from you, there is general agreement that private financing was not available for General Motors. Can you provide sources that say that private funding was available. Everything I've read says that it was not available. Moreover, the Obama administration appointed people who were capable of getting the agreements from all concerned that were required to give GM a good chance of recovering.
As I'm sure you're aware, there are several types of bankruptcy with different results--the type Romney advocated which would have not saved GM and Chrysler and the type which required government funds and which kept the companies in business and saved a million jobs.
There's not much of a market for closed auto plants.
I prefer to see a reliable source before just blinding assuming everything i read on a forum is accurate.
According to your link, it doesn't cost that much to make a Volt. That cost is only achieved when all development costs are included, and spread over a very limited number of cars. In reality that cost should be spread over the expected lifespan of the model - anywhere from 2 to 50 years of production. How long has the R&D for the Ford F150 lasted?
That GM (and other American car companies) fail to understand this and make use of it is a hit to those companies. Again, as your link pointed out, Toyota sank some 10 billion into the Prius - a car that has had, considering its radical departure from the "normal" car, phenomenal success. It took years of production to convince buyers it was a viable car. Years that that 10 billion went "unpaid", but has now been recovered and allows the company to make a good profit on each car. Just like the costs to develop the F150.
Why don't our own companies take risks like that? Toyota took a huge risk, and their P&L suffered for a long time from that risk, but it is paying off handsomely now. IMO American companies have focused far too much on immediate profits rather than long range ones, and it shows in this fiasco. Chevy has produced a car that only has nominal changes and is crying to high heaven that they need public help to finance those changes. Toyota made a completely re-designed car and basically financed it themselves in a risky decision that has paid off.
So the initial numbers seem to be dodgy? Actually all we did is support R&D for a clean technology?
Then yes, I enjoyed paying for that.
Just to get this straight.
You enjoy paying
$15-$25 billion in unpaid funds to bailout GM.
$45 billion in tax breaks for the next decade.
$2.4 billion for GM to research new technologies, even though they have the money to do so themselves?
You asked about the volt, and that was my answer. I think the volt was a good investment in terms of finally getting an American electric car into production.
But as you ask, i also think it was better GM didn't collapse and I see no evidence private partners could/would have done that.
I didn't specifically ask about the volt, but that's how much we had to pay to get to this point.
Wouldn't it have been better to just take GM through bankruptcy, instead of wasting billions on the bailout, not give them a tax break for the debts that were forgiven, and let them use their own profits to create the volt?
After all, they can afford to pay taxes and pay for their own research. They just aren't.
Considering that one day of the Iraq war cost $700 million and one day in Afghanistan costs $300 million, seems like a bargain to me.
It's all about priorities, isn't it?
Or, you can be opposed to all wasteful spending...
I think pretty much everyone is opposed to wasteful spending by government. My point is, you are harping on a certain type of spending that you consider wasteful.
How is it a bad thing for me to be against the government wasting $70 billion on GM?
Here, how about this?
The government wasting $70 billion on GM is ridiculous, especially as we are continuing to waste money on them while they are profitable.*
*This assertion in no way detracts from the author's opinion on other areas of wasteful spending, including, but not limited to: unnecessary wars, other financial bailouts, essentially useless research, foreign aid while our own nation suffers, interest on debt we could live without, inefficiency and fraud in nearly every government department, etc...
I didn't say it was "bad." I'm merely pointing out that what you consider "wasteful" might be considered a long-term investment to someone else.
Again, it's all about priorities. Regardless of good intentions, any particular program or investment, whether using taxpayer dollars or private money, could result in wasteful spending. I'm not that upset if my government invests in a company with good intentions (saving jobs, helping with research and development). That fits my personal value system so much better than invading and occupying a country for over a decade and contributing to the deaths of over 100,000 people in the process.
See the above. How is giving GM refunds every year, instead of having them pay taxes like everyone else, considered an investment?
You're OK with GM not paying $45 billion in taxes?
Good question. Some would say the more money a corporation gets to keep, the more jobs it creates, right Jaxson?
Yup, as long as there is demand.
Do you approve of GM getting refunds, instead of paying taxes?
No, but I find it curious that you don't, given your perpetual argument that lowering corporate taxes creates jobs.
I think it would be tremendous if we got rid of corporate taxes. No kidding.
But, when we have them, I do not approve of government-owned agencies getting preferential tax treatment. Not in the slightest.
Well, government-owned basically means citizen-owned since it is our tax money that funds the government. In addition, as part of that "ownership" (as I understand it, the government owns less than a 30% share), executive pay restrictions are applied to the top 20 most highly paid employees. To me, it sounds like any preferential treatment applied is designed to be in the interest of the taxpayers, while the not-so-preferential treatment, like pay restrictions, are also designed to be in taxpayers' interest.
In the case of fully-owned government entities, yeah it doesn't make too much difference. In the case of partial-ownership, it makes a difference. I did word that poorly, but the idea should have been clear.
From the President who said he would increase capital gains taxes, even if it meant reduced revenue and reduced investment, all in the name of 'fairness', you have ONE major company in the US with a tax pass.
You think it is wasteful, I think it was the best option available. People have different opinions.
Ok, let's clarify some things.
GM doesn't have to pay taxes for a decade. That's not something that was necessary to get them back on their feet. It's also not proper for someone who went through bankruptcy.
That is going to cost taxpayers some $45 billion. Do you think it necessary, and the best option available, for us to continue to let GM make billions of dollars in profits every year, and instead of paying taxes, we give them refunds?
How successful was the "Cash for Clunkers" program? Taxpayers, (some of which could not afford a vehicle of their own), were forced to pay $5000.00 to qualified new car buyers to purchase their $500.00 to $1000.00 trade ins. Qualified new car buyers, these people did not need assistance to purchase a vehicle. The same goes for the $10,000 dollars given to first time home buyers. Once again taxpayers (many of which could not purchase a home of their own) had their wealth confiscated to assist home buyers. A complete waste of the peoples wealth! All done for the purpose of BUYING VOTES!
It for helped the recovery, because a lot of people, including myself, traded in old gas hog SUVs for new fuel efficient vehicles. I traded in a 10-year-old GMC SUV for a new Pontiac Vibe. This helped GM and the climate.
Did you really need taxpayer money for your purchase? Do you think it is fair to those citizens that need to use public transportation that a portion of their wealth was handed to you? Should a human being work to support others in their acquisitions? If you are concerned about the climate, would you not have made the purchase without the government confiscating the wealth of others for your personal benefit?
On a side note, the Pontiac Vibe is a Toyota Matrix, built by the Toyota company. How much did it actually help GM? In a small way it might have helped, but Toyota probably received the lions share of the benefit.
If it contributes to the development of affordable electric cars, reduced dependence on oil, and all that follows: yes.
And what if the program was a complete failure? Our dependence on oil has not changed, electric cars are anything but affordable. Americans do not want these vehicles, no amount of wasted wealth can create a demand! Even electric vehicles need oil or coal to produce the electricity required to operate them, I have seen no proof that these vehicles alter the consumption of fossil fuels at all.
Americans don't want them? And yet the latest model of the prius was sold out before it even hit the country. As technology improves and economies of scale come into being the cars will improve, the price will come down and more and more Americans will opt for a battery or hybrid car.
Except that modern power plants are far, far more efficient in converting those fossil fuels to energy than a car is. Even after deducting for transmission losses and losses from charging/discharging a battery the plant is still much more efficient in terms of both usable energy and pollution.
37,184 total hybrids sold out of 1,330,197 total vehicle sales this year! Not really breaking down the doors!
http://www.hybridcars.com/news/may-2012 … 46746.html
If diesel vehicles were to be introduced to the American market, hybrid sales would plummet!
You are partially right. However, proprietary research, resulting in information and technology for only one company, should never be paid for the Uncle Sam. If research is expected to provide a profit for a company, let them pay for and take the risk.
Govt. should only pay for research that has no profit goal in mind, with the results made available to all American companies. Give them a deduction as a business expense, fine. It's a legitimate expense. Giving the cost of the research simply means that the public is funding the future profits of the company.
How come nobody's responded to my question about Bush's bailout of AIG in which the money passed through AIG instantly and into the pockets of Goldmine Sucks.
Probably because it doesn't have anything to do with the chevy volt, or because George Bush isn't the President anymore. What does talking about Bush do to fix the problems we have today?
It's a start, and the idea is to replace use of gas--not to promote it.
by pgrundy9 years ago
Does anyone else think this is getting out of hand? I read yesterday that GM will close 5 more plants and lay off 20,000 more U.S. workers but they need $14 billion to do it. How many jobs could we lose for $28 billion?...
by earnestshub8 years ago
GM reckon that although they had a lousy year, the will be in profit this year and all the bailout money is to be paid back by June.There have been quite a few companies paying the bailout money back. Is this another...
by William R. Wilson7 years ago
http://www.nytimes.com/2010/11/18/busin … amp;emc=a2It's not all paid back yet, but things are looking good. Hardly a socialist nationalization of the auto industry though....
by MikeNV7 years ago
You can read it for yourself... and you should. And you should vote out every Democrat and Republican that supported this giveaway of your tax dollars to the wealthy. Everyone here knows that the Chrysler GM...
by Jen King7 years ago
NEW YORK (CNNMoney.com) -- General Motors has made a final payment of $5.8 billion to the U.S. and Canadian governments, paying off the last of its $6.7 billion in loans, the company said Wednesday."I am very...
by ptosis6 years ago
Why did taxpayers fund the bank bailout instead of the insurance companies?Since that insurance company had to be "bailed out" to the tune of $85 billion?
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