GM: We still own it

Shikha Dalmia writing in Forbes has the non-spin version of GM's "payback" of taxpayer dollars.

Needless to say, Government Motors came up a little short despite their boasting:

Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn't, the company, which couldn't raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, "The GM Bailout: Paid Back in Full," most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.

Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate--a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company--arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)

But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion--the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.

And that's only part of the story. The fact is, the money GM is bragging they paid back is from a government financed escrow account.

GM paid back taxpayers with taxpayer money.

But cheer up. We still own Government Motors. Our 60% stake in the company should give us all some pretty nice perks. I think a couple of million of us should show up at the next stockholder's meeting and demand free cars for all of us.

It will be the only value we will ever get from this idiotic takeover.