General Motors: Building Houses and Bailing Out Previously Bailed-Out Banks, Using Bailout Funds
General Motors does some pretty weird things, but also some really fantastic things. One of the latter is that GM’s CEO, Dan Akerson, will be auctioning off his 1958 Corvette, which holds a value of somewhere between $50,000 and $135,000, for charity. All of the proceeds of this auction will go directly to Habitat for Humanity Detroit, an area that truly needs the help.
We’d like to give Akerson nothing but praise here, but we can’t quite do that. Around the same time this report of generosity came out, we found out that GM is in the midst of playing Russian roulette with taxpayer dollars.
GM is the only automaker not to pay back its bailout loan, and it is now considering using this bailout money to buy international operations from Ally, the only bailed out financial institution not to repay its bail-out loan. In a fit of irony, Ally needs this bail out from the bailed-out GM in order to try and pay off its own unpaid bailout loan ... You got all of that?
So on one hand, GM is showing its compassionate side and carefully pulling the wool over our eyes, while the other hand is greedily reaching in our wallets and purses to grab a little more money. Granted, GM “paid back” the government in stock, but that is a losing effort to date and it will likely never turn into a breakeven deal for taxpayers.
In addition, if Ally needs to sell these operations to get the money together to pay back its bailout, what does GM expect to make with these operations? But that’s okay, Akerson is donating his `Vette! So pay no attention to that man behind the curtain
Source: Blooomberg Businessweek