ECONOMY - Chrysler Pays Back Taxpayers

"Chrysler Pays Back Billions in Bailout Loans: Is the Comeback Complete?" PBS Newshour Transcript 5/24/2011

Excerpt

JEFFREY BROWN (Newshour): And we turn to an update on one of the big three automakers, as Chrysler pays back billions.

Chrysler CEO Sergio Marchionne made the announcement as he stood before a banner reading "Paid" at a plant just outside Detroit.

SERGIO MARCHIONNE, Chrysler: We have received confirmation this morning at 10:13 a.m. from Citigroup that Chrysler Group repaid, with interest, by wire transfer to the United States Treasury and by bank transfer to the Canadian government, every penny that had been loaned less than two years ago.

(CHEERING AND APPLAUSE)

JEFFREY BROWN: The bill came to $7.6 billion -- $5.9 billion repaid to the U.S. government and $1.7 billion to Canada.

The company financed the repayment with a mixture of bonds, bank loans, and an increased stake from its Italian part-owner, Fiat. Less than two years ago, Chrysler had emerged from Chapter 11 bankruptcy with a government bailout package that also left it under Fiat management.

Ron Bloom was part of President Obama's auto task force.

RON BLOOM, assistant to President Obama for manufacturing policy: This repayment means that U.S. taxpayers have now recouped more than 100 percent of the money that President Obama invested in the company, and over 85 percent of all moneys invested by the U.S. government.

If that doesn't qualify Chrysler for comeback of the year, then I cannot imagine what would.

(CHEERING AND APPLAUSE)

JEFFREY BROWN: Two years ago, a number of Republicans criticized the bailout, charging the Obama administration had overreached.

REP. JOHN BOEHNER, R-Ohio Minority Leader: What we really ought to have is an exit plan to get the federal taxpayers' money back in the treasury and allow the private sector to be itself.

JEFFREY BROWN: And today's announcement immediately became a political football, as the Democratic National Committee released an ad taking note of the earlier criticism and celebrating Chrysler's comeback.

MITT ROMNEY, (R) former Massachusetts governor: ... that, if you write a check, they're going to go out of business.

JEFFREY BROWN: Today's move was the latest step in what may be a broader revival of a Detroit auto industry all but left for dead two years ago.

The smallest of the big three Detroit automakers, Chrysler has been fighting to restore its image, as well as its bottom line, including a big Super Bowl ad featuring Detroit's own Eminem.

EMINEM, musician: This is the Motor City, and this is what we do.

JEFFREY BROWN: And, last quarter, Chrysler posted its first net profit in five years.

American taxpayers win AND Chrysler workers win. Also, private investments look better.

ECONOMY - A Tail of Two GMs

"The Ghosts of ‘Old G.M.’" by PAUL CLEMENS, New York Times 11/17/2010

Excerpt

IT is fitting that the Motors Liquidation Company — that portion of General Motors that was sliced off during its bankruptcy and so is not a part of the “New G.M.” that is having its initial public offering this week — has been shortened in common parlance to “Old G.M.” “Old” is the euphemism we use when talking about a closed auto factory, and Old G.M has plenty of old plants.

Some of these plants will find buyers and be put to new uses. But many — perhaps most — will not. They’re old and unwanted, and as I’m from Detroit, where one can’t help but develop a fondness for the forgotten, I find myself thinking of Old G.M. and its old plants even as press attention turns to the new company and the initial public offering that’s supposed to help it pay off the $40 billion it still owes the government.

I understand why Old G.M. has faded to the background, but my problem with the current news foreground is this: I can’t consistently remember what I.P.O. even stands for. And, while I know that they exist, I wonder, do I.P.O.’s actually exist? How would I recognize an I.P.O. if I bumped into one?

I.P.O. = Initial Public Offering (of stock)

I do know what closed auto plants look like, though, and I bump into plenty of them on my daily drives through Detroit. Depending on the day, I’ll pass by the old Continental plant, the old Budd plant, the old Packard plant and the old Fisher Body plant, among others.

For the better part of a year in 2007 and ’08, I paid visits to the old Budd Company stamping plant on Detroit’s East Side. Recently closed auto plants are sad places, enough to drive the sunniest disposition to dark thoughts. I was beginning research on a book, and while at that time a few big auto suppliers like Delphi were already in bankruptcy, we had no idea that the Chrysler and G.M. bankruptcies, and the Great Recession itself, were around the corner. “Carmageddon,” as it’s been called, was unthinkable.

The Budd factory had for more than 80 years produced brake drums, wheels and auto-body stampings for the major car companies. I spent most of my time there watching the plant’s press lines be taken apart to be shipped abroad — to Mexico, to Brazil. The cast of characters in the dismantling was equally international: Spanish, Portuguese and German were among the languages spoken, as well as English of various dialects.

ECONOMY - GM Starts Taxpayer Payback

"U.S. Taxpayers Recover Billions in Sale of G.M. Stock" by MICHAEL J. de la MERCED and BILL VLASIC, New York Times 11/17/2010

Excerpt

American taxpayers’ ownership of General Motors was halved on Wednesday, and billions of dollars in bailout money was returned to the federal government, as a result of the nation’s largest initial stock offering ever.

The offering, which raised $23.1 billion, is bigger and more ambitious than had once seemed possible. But the recently bankrupt automaker will have to build on its revival for the government to recoup its entire $50 billion investment and validate the Obama administration’s decision to keep G.M. from collapsing.

The new shares start trading on Thursday at $33 each. To break even, the Treasury Department will need to sell its remaining 500 million shares at an average price of $53 each in the months and years to come. And while the administration may retain great influence over the company, it may not be able to keep stoking the enthusiasm investors have shown for G.M. stock in recent days.

Still, now that General Motors has shown that it can be profitable, a complete exit by the government could happen even within the next two years. With the offering, G.M. is shedding its ties to the government faster than expected, cutting the Treasury Department’s ownership stake to 26 percent, from nearly 61 percent.

"GM Turns Corner With IPO, but Can It Maintain Momentum?"
PBS Newshour 11/18/2010

THEY LIED - American Big Auto No-Can-Do

"Lick My Silent Sports Car, How much has Big Auto lied?" by Mark Morford, SF Gate

Oh my God do they ever lie.

All of them: Big Auto, Big Oil, BushCo, Pennzoil and Havoline and Saudi Arabia and crusty Alaska Senator Ted Stevens and the oil lobbyists and lackey scientists working for the Department of Energy and all the rest, on down the line and right up to your garage door.

Lie lie lie lie lie like evil little ratdogs because they are, after all, corporate greedmonkeys and war profiteers and duplicitous oil-sucking cretins (is that too polite?) who would eat their own mother's heart for a notable uptick in share/barrel price. Nevertheless, it's always a bit of a jolt when you see it all up close and personal and they basically rub it in your face.

Just look. Look over here. It's a new sports car. It's a new sports car that looks deliciously like a Lotus Elise and reportedly drives like Michael Schumacher's wet dream and goes from zero to 60 in about four seconds with so much torque and freakishly instantaneous power it makes the gods swoon.

This car, it has a top speed of 130 mph. It has a range of 250 miles. It also has GPS navigation and air-conditioning and air bags and it surely will come with a very badass sound system. It has heated seats and (I presume) iPod integration and Bluetooth. You know, just like a real car.

Oh, and by the way, this car? It's completely silent. It is 100-percent emissions-free. Doesn't even have a tailpipe. Because it has no internal combustion engine of any kind.

It's not a hybrid. It's pure electric, powered by a "3-phase, 4-pole AC induction motor," which I'm sure is rather impressive if you know what the hell it means. But it means one thing for certain: The only oil in this car is in the buffing fluid for the leather seats.

That's right, it's not a prototype. Not some eccentric inventor's crazy basement fantasy. It's a real car. Street legal, drivable, gorgeous, available soon. The Tesla guys have already earned their share of press, given how they managed to wrangle millions in backing from the Google boys (among others). Rumor has it that the Guvernator himself, after going for a test drive during last week's press day, has already placed his order for one of the little luxo speedsters, presumably to feed to his fleet of rabid Hummers.

Of course, it's not cheap, $80k.

It is the collusion between Big Auto and Big Oil that has been keeping this off our auto markets. They want their profits no matter how it hurts the rest of us.

Click the "a new sports car" above to link to Tesla Motors. Pay special attention to the specs page.