GM CEO: We’re Not Paying Any More Back to Government

Dan Akerson says Treasury took the same risk as anyone buying GM stock

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Carlos Osorio / Associated Press

General Motors Chairman and CEO Daniel Akerson.

Dan Akerson, General Motors’ Chairman and CEO, rejected calls for the automaker to pay an extra $10 billion intended to to cover the difference between taxpayers’ investment and what the U.S. Treasury recovered from selling its GM stock last week.

Akerson argued that the government accepted the risk when it opted to accept shares in the company, as any investor might when backing an embattled firm. The government took a stake in the company as part of a bail-out during the 2008-2009 financial crisis. If GM paid the Treasury for its losses, GM’s out-going CEO said, the company could face lawsuits from other shareholders.

“I would not accept the premise that this was a bad deal,” Akerson said at the National Press Club in Washington, D.C. Monday. Akerson contended that the government’s $49.5 billion aid package to GM saved billions in tax revenue, and saved millions of jobs, avoiding spending on food stamps and unemployment benefits, The Detroit Free Press reports. “Net-net, it was a positive for the U.S. economy,” he said.

[The Detroit Free Press]

16 comments
BillB.
BillB.

The more that God is pushed out of our schools, the public and out of  our private lives, the more of this 'lawlessness' we will see. Bring God back into our homes, schools and private lives and the less 'lawlessness' we will see. I mean the one true God; of Abraham,Issac and Jacob!

unhappy75
unhappy75

I would like to have the option of deciding which of my debts I choose to pay or not.  We lost our total investment in GM stock in the bailout deal.  You should also know that we've been GM vehicle owners since 1954 and, even though we have $3400 plus toward the purchase of a new vehicle on the GM card, we will not be buying any GM vehicle in the future.

Onepatriot
Onepatriot

I see the value in government stepping in when needed.  My problem is that they don't often make tough enough agreements with banks and businesses.   The economy as a whole benefits, but when you explore it, the lower and middle class doesn't fare as well as the upper which is evidenced by the income gap we now show.  If banks were required to loan out half of what they borrow, small businesses and borrowers would benefit which would go back into the economy and the middle class would ultimately benefit, thus bringing in more tax revenue.  I don't get why they're allowed to sit on that cash.

It bothers me when businesses that were helped either directly or indirectly end up snubbing their noses at the taxpayers and go on with the bonuses  to execs and get quickly get back to pleasing their stockholders.  I'm not referring to one specific company, it's just the climate they live in.  When do they ever consider that they should "pay forward" to the country (and taxpayers) that provided the infrastructure and means for them to become successful in the first place?  Never, I suspect, since making big profits seems to be all that they consider.

Notgreedy
Notgreedy

At the same time that the US bailed out GM, the company paid outgoing CEO, Rick Wagoner $ 28 million just as a thank you for doing such a great job. Capitalism stinks & overpaid CEO's of multinationals, that control governments, need to be brought down a few notches because they will be the ones that cause the revolutions of the future as a result of their absolute greed.

ThomasHall
ThomasHall

Of the $40 billion GM paid back to the fed, the $10 billion not paid back is offset by the $10.7 billion interest paid by the TARP bailed out Wall St. banks not counting the tens of billions paid in fines. In the end, the fed came out ahead in the GM and Wall St. bailouts though the American working class and workers continue to suffer through the Bush Great Recession with their trillions in investments lost during the meltdown, 4+ million lost homes, 9+ million homes underwater, the loss of 9 million jobs on top of the five million manufacturing jobs under Bush-Cheney shipped overseas or to Mexico.

JohnDavidDeatherage
JohnDavidDeatherage

The government propping up (subsidizing) failing businesses or industry is a mistake. We are only perpetuating inefficiency. Let markets work.

Clemensghost
Clemensghost

@ThomasHall True, but don't be a rube.  When did anyone actually believe the US was going to benefit from the decisions made in a corporate boardroom of a multinational privateer?

ThomasHall
ThomasHall

John--The deregulated banks and the subprime mortgage bankster fraud is a good example of the excesses and failures of capitalism. The GOP failure to allow the government to be an employer of last resort has resulted in higher than necessary unemployment, higher dependence on government assistance like food stamps, and slower economic growth.

Remember when the GOP claimed their top priority was jobs and the economy? They lied.

ThomasHall
ThomasHall

Not sure what your point is. The decision to take over GM was ultimately a federal one including choosing a CEO and it worked and saved well over one million jobs not just auto industry jobs but all those businesses that are auto industry dependent. It has been one of the bright spots of the Pres. Obama recovery with over 350,000 new auto jobs which of course the working class GOPeons never acknowledge.

People quickly forget what Pres. Obama inherited from GW Bush--a $1.7 TRILLION budget deficit, the incoming, ongoing bills from previous GOP administrations plus Bush-Cheney's unpaid-for Medicare Rx drug giveaway to the drug makers at $65 billion per year, the 12+ year, $2.8 TRILLION, non-jobs-creating Bush tax cuts that mostly went to the rich, 20+ years of combined, unpaid-for wars projected to cost $6 TRILLION , a Wall St. credit market in freefall with the subprime mortgage rich bankster fraud, jobs lost at 600,000+ per month and 880,000 in 1/09 when the DOW was 6,949. It was the rich that did this to America not unionists, public employees, "welfare queens," or undocumented immigrants.

JohnDavidDeatherage
JohnDavidDeatherage

@Clemensghost @ridgepablo  I have read and reread your post. I have no idea what you're for or against.  Should the government have bailed out GM? Should GM be liable for the 10 billion?  I have no idea about what you think or believe.   I have concluded you are pseudo-intellectual that believes they know a lot when in fact they know very little.  I have suggestion. Work on your prose to make your thoughts more clear.


As for your name calling, that is classic Ad Hominem. It takes a brave man to insult someone while remaining anonymous and miles away. 

Clemensghost
Clemensghost

@ridgepablo:  well spoken and true as far as it goes.  But misses the point.  There no possibility of properly restrictive regulation when the regulators are either identical to, or subservient to the miscreants.  J. Adams warned of the evils of the "company" (i.e., East India Co) agglomeration of wealth that corrupts.  Adam Smith concurred as to the need for regulation, but the USA is now the plutocracy it used to chide in the press of the gilded age.  There is no market any more, only rubes to be bilked.  And morons like JohnDavidDeatherage are proof positive that there can not be a regulatory correction appropriate to the villainy that has been perpetrated against the American people (all of them) by the Financial privateers.  Your point about market efficiency being assured even in the narrow sense is incorrect if the subsequent correction substitutes bullets for ballots and liquidity is ended.  Getty was right: the time to buy is when there's blood in the streets.  But not if it's your blood.

JohnDavidDeatherage
JohnDavidDeatherage

@ridgepablo @JohnDavidDeatherage @ThomasHall you both used many words to express very little.


The US government bailed out Chrysler 25 years ago when they should have let it fail. Now we have bailed out chrysler again and GM.  We are rewarding inefficiency. Let businesses fail and let the market reallocate those resources. There are too many car manufacturers in the world. We have a glut of supply coupled with falling demand in the US. Bailing out car makers is done for political reasons, not economic ones.


Subsidies always start out with the best of intentions....  beware the law of adverse consequences.

ridgepablo
ridgepablo

@JohnDavidDeatherage @ThomasHall  Actually, I think he does understand something about economics, and some of the limits of capitalism.  The principle that markets are "efficient" (i.e. the first Fundamental Theorem of Welfare Economics") only holds under selective conditions: complete information and contingent claims (insurance) markets; no monopoly power; no uncompensated pollution to name a few.  Regulation can be a necessary action to assure that financial transactions are conducted with full information and backed up by sound company resources; to avoid uncontrolled pollution; and to limit the adverse effects of market manipulation by very large firms or other nation-states (OPEC, Chinese competition in some areas).  Furthermore, the government/society has be be concerned about the long-run or economy-wide consequences of industry collapse and massive unemployment. Individual firms do not.  Finally, all of this, even meeting all of these conditions only assures market "efficiency" as defined in a very narrow sense (Pareto optimality), which has essentially no bearing on the fairness or decency of the final market outcome.  Thanks.

Clemensghost
Clemensghost

@JohnDavidDeatherage

Deathrage:  no, you don't understand economics, or history, or law.  The markets were skewed to reward banks for oversubscribing risk in securitizing tranched debt based on the false promise of AIG/Fannie and Freddie backed mortgages being "as good as US dollars", and resold this to sovereign funds, hedge funds and each other with abandon and hypothecated geometrically through options trading.  All was made possible because the banks talked morons in DC into repealing Glass Steagal.  But the banks have so much effective control over the economy that to allow them to fail and for their corner office holders to do jail time (as they still so richly deserve) would impoverish the US and close all borders to goods and fuel to the USA.  Paulsen knew this, as did Bernanke.  The GOP and the DEMs are both totally clueless sycophants to Wall Street now, but to pretend that there was a choice to prop up the ledgers of the pirates when the pirates control both the Fed and Treasury is just ignorance.


Welcome to the United States of Morgan, Blankfein and Marley.  Them that's got shall get: everyone else can hit the breadline.  Oh, I forgot, that would be subsidizing failure.  There is no free market in the world, and to continue to vomit the "Genius of the beast" rhetoric regarding markets as an excuse for allowing massive corruption and cupidity to kill and impoverish millions is worse than assinine, it's evil. And it's treason, since all the debt associated with the Mortgage CDO and CDS paper was essentially counterfeit US currency.

@JohnDavidDeatherage@ThomasHall