A closer look at the numbers revealed some trouble for GM. Europe and South America sales, for instance, were disappointing. And GM actually missed Wall Street expectations.
I thought I wrote a rather numbers-based piece about road ahead for the automaker. But silly me, I forgot to factor in knee-jerk politics.
What really had a lot of investors and consumers talking yesterday was that GM posted such dramatic profits after a government-backed bailout — a bailout that I briefly pointed out has yet to be repaid in full, and likely will result in a loss for American taxpayers by the government’s own admission.
Allow me to share some of the recent rants with you that we have received at InvestorPlace.com — as a way to not just take the temperature of the American people, but to also dispel some common misconceptions:
No, the Bailout Was NOT Repaid
How could you not mention that GM paid back the government? I can only assume that you are/were against the bailout. Either way, very poor journalism to mention the bailout as you did without mentioning that they paid it back. Thanks for fueling the fire of ignorance in this country.
Actually, by the U.S. Treasury’s own admission, there is some $28 billion left unpaid of the TARP funds that General Motors received in 2009. You can get daily updates here. As of Feb. 16, GM’s bailout had a realized loss of about $4.4 billion. Total losses across all auto bailouts so far is $5.7 billion.
Come on … There Are No ‘American’ Cars
Let me guess — you drive a Japanese car, correct? Let me make another guess — you have never owned an American car, correct? One last guess — you’re anti-American car (or at least anti-GM) and you enjoy making that fact obvious in this article, correct?
How quaint, the notion of an “American” car. Fact: Honda (NYSE:HMC) has a Lincoln, Ala., plant that can crank out 300,000 vehicles including Odyssey minivans and Ridgeline pickups. Fact: GM just invested $540 million to build more engines in Mexico. So which company is more “American”? It’s a matter of degree.
Let’s not resort to this old canard. Next thing I’ll be getting emails asserting that Apple (NASDAQ:AAPL) is an “American” company because of its California address — despite building an entire manufacturing city in China for its slave labor … I mean, Foxconn employees.
Should We Blame the Banks for EVERYTHING?
Why did you not mention the fact that GM never would have needed a bailout in the first place had it not been for the credit crunch caused by the houseing mess? The houseing mess created by Wall Street.
Yeah, that $38 billion loss in 2007 wasn’t the problem. Damn that Goldman Sachs (NYSE:GS)!
This Is Not a Democrat-Republican Thing
Obviously you are one of those “If Obama did it it must be bad” people.
Actually, President George W. Bush and his Treasury Secretary, Hank Paulson, got the ball rolling on both the auto industry bailout and the bank bailout. So whether you think it was good or ill, start admitting this was a bipartisan effort.
‘What Ifs’ Swing Both Ways
This isn’t just GM or Chrysler employee’s but countless others in related industries. Some estimates in the millions. And while no one can know what would have happened to all these people was it worth the risk to add that many people to the unemployment rolls?
Sure, I suppose in a different world we would be worse off without the bailouts. But in a different world we also might be better off. Countless books have been written — and will be written still — about how the world would have been different if Bear Stearns or AIG wasn’t saved. Or if Lehman was saved. Or if Congress approved less stimulus in 2009 — or more.
It’s accurate to say that “no one can know what would have happened.” But let’s not be naïve and think that without history playing out exactly like this, we would be significantly worse off.
Yes, Bank Bailouts Deserve Similar Scrutiny
Your article sounds very biased. You talk about the loss of 16 billion for Detroit bailouts. Is that GM and Chrysler? How much did we lose bailing out the banks and AIG? How much did they pay back?
True, there is just as much vitriol about big banks as about Detroit automakers. But believe it or not, I intended simply to digest GM earnings … maybe I will writer a broader TARP follow-up after all this. Until then, please check the regular TARP updates from the U.S. Treasury to see the list of who has repaid what — and how much taxpayers have lost.
Want to spout off on this or anything else relating to the bailout? Post your comments below or drop me a line.
Jeff Reeves is the editor of InvestorPlace.com. Write him at email@example.com, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. Jeff Reeves holds a position in Alcoa, but no other publicly traded stocks.