Government Motors Tax Bill

[gatordowneast]

Not only did we bail Government Motors, their pension funds, unions and more out, at the expense of bondholders, vendors and others but we also will be receiving no corporate income taxes for many years. You will need to click to page two to find the story (buried as are most articles not favorable to the administration)

http://finance.yahoo.com/news/compan...70.html?page=2

[HudsonGator]

This country would not be better off if GM had been allowed to fail.

[G8trGr8t]

Originally Posted by HudsonGator

This country would not be better off if GM had been allowed to fail.

But we would be much better off with a structured reorganization. It wouldn't have failed it would have been restructured and the unions would have had to share in the pain

[scrappygator]

+1

[northgagator]

Originally Posted by HudsonGator

This country would not be better off if GM had been allowed to fail.

Originally Posted by G8trGr8t

But we would be much better off with a structured reorganization. It wouldn't have failed it would have been restructured and the unions would have had to share in the pain

Both post are very good and at the same time right..

Darwinism is not just for animals and plants. It is also very active in the business world:

. The only constant is change. You must adapt. You must cannibalize your own products. Steve Jobs said this. His rationale was that if you don’t cannibalize your own products your competitors will.

Your core ‘why’ may never change but you’re probably going to change everything else about your product/service offering. Why wait till the market forces you to change? Why not lead change?

Plan to innovate. Plan to get feedback on your innovation. Plan to measure what works and be willing to change the plan based on the feedback you receive.

The organizations that thrive in 2013 and beyond will have a determination to adapt. A willingness to change for the better. They will take calculated risks and understand that the riskiest place to be is standing still avoiding change.

http://strategylab.ca/darwinism-of-business-strategy/

Here us a good read that supports the two posts
http://www.briansolis.com/2013/02/no...ness-failures/

[surfn1080]

GM would not of just fell apart. It would of gone through a re-structure and probably would of been better off than it is today.

[oragator1]

GM didn't even have money to make payroll or pay suppliers at the height of the credit crunch. In 2003, 2004 etc yes restructuring would have been the best option, but in 2008 or 2009, where were emergency funds going to come from? It was 10's of billions they needed and the big houses were illiquid, bankruptcy wasn't an option if they were going to continue operating. It's why Bush and then Obama both felt the need to take that path, and it wasn't all political. Had they gone all of the suppliers would have gone, then those who supply the raw materials to the suppliers etc etc. It was millions of jobs that were potentially affected, there were really only 2 choices, let them go or bail them out.

[G8trGr8t]

Buffett would have bought it just like he did AIG and Bank of America. Gubmnt could have backstopped him while he cleaned up the debt and the outlandish union benefits and work rules. He would have made a ton of money on it and cleaned up their books. Right now, I would not bet that GM is back with their hands out in a number of years.

And oh yeah, if the Chinese could not steal the technology we paid for with the volt remotely, they just convinced/blackmailed GM to move their electric car headquarters to China so the hacking and spying would be even easier.

[QGator2414]

Originally Posted by HudsonGator

This country would not be better off if GM had been allowed to fail.

This country would be better off if GM had restructured under the law.

[G8trGr8t]

Originally Posted by oragator1

GM didn't even have money to make payroll or pay suppliers at the height of the credit crunch. In 2003, 2004 etc yes restructuring would have been the best option, but in 2008 or 2009, where were emergency funds going to come from? It was 10's of billions they needed and the big houses were illiquid, bankruptcy wasn't an option if they were going to continue operating. It's why Bush and then Obama both felt the need to take that path, and it wasn't all political. Had they gone all of the suppliers would have gone, then those who supply the raw materials to the suppliers etc etc. It was millions of jobs that were potentially affected, there were really only 2 choices, let them go or bail them out.

then why did the unions come out whole and the stockholders like me come out with zilch...yeah, nothing partisan or political at play there

[geauxgator1]

Originally Posted by G8trGr8t

then why did the unions come out whole and the stockholders like me come out with zilch...yeah, nothing partisan or political at play there

The unions now are the owners of the company. More money for the DNC.

[MichiGator2002]

Can anyone explain how the fate of the company and the entire body politic hinged on completely screwing GM's secured bondholders by ignoring the law altogether? The only people that the GM bailout was designed to protect was the UAW, and the government stepped over a lot of grandparents' retirements that were in s lot of that low risk (heh) mutuals that held a lot of those secured bonds that got ripped up to prop up the UAW deal that represented almost all of GM's problems. Like cutting off the patient to save their gangrenous limb.

[oragator1]

Originally Posted by G8trGr8t

Buffett would have bought it just like he did AIG and Bank of America. Gubmnt could have backstopped him while he cleaned up the debt and the outlandish union benefits and work rules. He would have made a ton of money on it and cleaned up their books. Right now, I would not bet that GM is back with their hands out in a number of years.

And oh yeah, if the Chinese could not steal the technology we paid for with the volt remotely, they just convinced/blackmailed GM to move their electric car headquarters to China so the hacking and spying would be even easier.

Buffett had his worst year on record in 2008, he wasn't rolling in cash then either. At the end of 2008 he had 25 billion cash on hand, the total cost of the bailout was around 50 billion. So even if he got it done at half price it would have meant using up every dollar of available cash he had, and anything more than half price he was probably priced out. Making a bet on one of the most dysfunctional companies in the country, or selling assets in the worst market in living memory to make the purchase of said dysfunctional company, neither were probably appealing options to him.
I would be willing to bet that Paulson at least gauged his interest in GM before bailing them out, the fact that he couldn't find an investor(Buffett or otherwise) and had to do the bridge loan further makes the point that options were extraordinarily limited.

[mastoidbone]

It was a terrible deal for the people fo America.

All the sales GM has would now be had by corporations who actually PAY taxes---this will cost the US over 50 BILLION in long term on top of the BILLIONS we have lost on GM bailout already.

If GM was to be bailed out----this should NOT have been included----this was MOSTLY about dems paying back unions to the detriment of americans and bond holders and rule of law.

It was alos illegal according to the right wing extremist site---harvard.

http://www.law.harvard.edu/programs/...t%20al_690.pdf

[G8trGr8t]

Originally Posted by mastoidbone

It was a terrible deal for the people fo America.

All the sales GM has would now be had by corporations who actually PAY taxes---this will cost the US over 50 BILLION in long term on top of the BILLIONS we have lost on GM bailout already.

If GM was to be bailed out----this should NOT have been included----this was MOSTLY about dems paying back unions to the detriment of americans and bond holders and rule of law.

It was alos illegal according to the right wing extremist site---harvard.

http://www.law.harvard.edu/programs/...t%20al_690.pdf

no no no...this would have destroyed america if the unions would have had to sacrifice..listen to oragator he knows

[oragator1]

Originally Posted by G8trGr8t

no no no...this would have destroyed america if the unions would have had to sacrifice..listen to oragator he knows

Snide comment aside,

Nowhere have I said that the terms of the bailout were advantageous to the American public or that the unions didn't get a better deal than they should have, I agree with mastoid on that point, more pain should have been felt within the company and the long term tax breaks were also politically motivated, a back door attempt to make the bailout look better.
The only point I am making is that in the context of the economic reality in the fall of 2008 bankruptcy was not an option, and 2 presidents from diametrically opposed political philosophies both realized it. The revisionist history that has taken place around what the viable options were at the time is ideologically motivated.

[G8trGr8t]

apologies for the snide comment but GM is the only stock in my portfolio at the time that did not recover due to their bankruptcy and the swetheart deal that the unions got is a real source or irritation for me. I am not rich or from a wealthy family but am trying to build a retirment nest egg through hard work and savings. I worked hard and saved and invested in a blue chip american company that had assets to back up the stock even if the stock went south it should not have ever went to 0. I understand and accept risk but I don't understand or accept theft. O stole close $10k from me with no basis in law and gave it to the unions.

there was no interest in taking over Chrylser either until the unions agreed to concessions. if the unions at GM would not have had 0 backing them up, they would have been more reasonable in their discussions with possible suitors and the company would have found private funding but the legacy union costs and existing contracts would have taken a beating as they should of.

There is absolutely 0 doubt in my mind that the GM bailout was a gift to the unions; a gift taken out of my pocket illegally by the POTUS.

[mastoidbone]

Why was the union--which had claims to about 10-15% of value get much more then bond holders with larger claims and with equal standing by law to those claims?

Every car gm sells costs the USA money--no tax paid by gm---
The bailout costs will be felt for over a decade in reduced govt revenue.

There was no benefit to the bailout in long term and a giant cost.

Does anyone really think that all the cars now sold by gm would not be replaced by ford? Toyota? Nissan? And they would pay taxes!

There was and remains a massive over capacity in car manufacturing---why bail out a company in an industry with massive over capacity and reward the worst car maker of the bunch with billions of OUR cash? And then allow them to avoid almost 50 billion of taxes that could cover cost of sequestration for example?

This was a hand out to unions and a reward for a corporation that made awful cars and had awful managers and engineers.

[gatordowneast]

Originally Posted by geauxgator1

The unions now are the owners of the company. More money for the DNC.

You got it. We get hosed again.

[HudsonGator]

So many words in this thread, yet so little truth.

Here's a little knowledge for the ignorant, it wasn’t some evil spell from the Obama Administration that just happened, rather it was indeed a good old fashioned Chapter 11 reorganization. It was filed as In re General Motors Corp, bearing case number 09-50026, in the United States Bankruptcy Court, Southern District of New York.. The UAW, through its health care trust, got a minority ownership interest (17.5%) in the new GM because it was one of the largest creditors of the old GM. Unsecured creditors also got a minority ownership interest (10%). The U.S. and Canadian governments received ownership interests in the new GM because they put up the money (60.8% and 11.7%, respectively).

This was a legal bankruptcy. The only thing that made it unique was its sheer size and the fact that two governments stepped up and provided the cash to save the company.