The other day I heard a GM commercial on the radio in which their CEO boasts about having “repaid our government loan, with interest, five years ahead of the original schedule.” Here’s a video version. But as Shikha Dalmia notes at Forbes, it’s still Government Motors. The U.S. gave GM $49.5B last year, ($6.7B of which was a loan at 7% interest) in exchange for a 60.8% equity stake. The still money-losing GM is paying back the loan using funds from the equity stake – not profits. Clearly, GM is hoping to encourage those critical of the bailout to give it a second chance. But Dalmia argues that GM was motivated to pay back the $6.7B loan at 7% interest in hopes of bolstering its case for a $10B loan (at 5% interest) from the Department of Energy to retool plants in support of meeting fuel efficiency goals. And GM’s plans to payback the taxpayer largess through an IPO have been pushed back from the original target of late this year. The GAO reports “The Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies’ values would have to grow substantially more than they have in the past.” Reason.TV has a similar take on this.
AUTHOR
Hans
Hans G. Schantz is the Principal Scientist of Geeks and Nerds Corporation (GaN). He was co-founder and CTO of Q-Track Corporation until GaN's acquisition of Q-Track in 2019. Co-inventor of NFER indoor location technology, he has more than 40 U.S. patents to his credit. He is the author of The Art and Science of Ultrawideband Antennas, The Biographies of John Charles Fremont, and the science fiction thriller, The Hidden Truth, available free through Kindle Unlimited. The sequel, A Rambling Wreck, was a finalist for the Conservative Libertarian Fiction Alliance 2018 Book of the Year, and third in the series is The Brave and the Bold. His latest work is The Wise of Heart, an illustrated courtroom drama of biological science versus transgenderism that updates the Scopes Monkey Trial for the twenty-first century. Dr. Schantz earned his Ph.D. in theoretical physics from the University of Texas at Austin, and explains his unique solution to wave particle duality at the Fields & Energy Substack.
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