I can’t say that I didn’t see this coming. In fact, I believe that I stated it would happen. The auto bailout saga continues with another $5.5 billion in tax payer money being made available to GM and Chrysler, as a loan of course. According to an AP story published by the Washington Times the money will be marked for working capital.
DETROIT (AP) — General Motors Corp. could get as much as $5 billion more in federal loans, while Chrysler LLC could get $500 million as they race against government-imposed deadlines to restructure, according to a government report filed Tuesday.
The quarterly report by a special inspector general on the auto industry and bank bailout programs says the money will be made available for working capital. GM has until June 1 to complete restructuring plans that satisfy the government’s auto task force, while Chrysler has until April 30.
This is on top of the $13.4 billion that GM received, while Chrysler took home $4 billion in the initial bail outs. GM CEO Fritz Henderson stated last February that GM would need at least $4.6 billion for the second quarter. It looks like he’s getting too. Making a whopping $18.4 billion in tax payer money “loaned” to GM and 4.5 billion to Chrysler.
This comes after Henderson stated in his first press conference after being crowned CEO of GM, that GM was looking into filing Chapter 11. A statement that he has repeated numerous times, both during T.V. interviews and conference calls with press.
“We will get the job done. We will either do it out of court or we will do it in court,” he said. “But we will get the job done in terms of recreating and reinventing General Motors as a competitive enterprise – one that wins in the market place.” — Mar ’09
“I felt several weeks ago that it would be more probable that we would need to go through a bankruptcy process,” he said. “That continues today. But I wouldn’t be able to hazard a guess as to what the probabilities would be.” –Apr ’09
If GM plans to file Chapter 11, as they should have last year when the bottom fell out, then why are we going to write the failed company a check for $5 billion dollars? The short and skinny of it can be boiled down to three letters U.A.W. The UAW are the only ones to benefit from all of this tax payer money. It buys them time and a quick pay out. Not to mention the negotiations to purchase $20 billion in GM stock. Which would likely make the UAW the largest shareholder in the company. Smell anything fishy?
I do. As I stated from the very beginning, GM should have never received tax payer money; they should have filed for a controlled bankruptcy. However, the UAW doesn’t benefit from that, in fact, it probably would have been painful for them. So, the UAW and their political allies forced GM’s hand. $18 billion in tax payer money later… Chapter 11. As usual, the American tax payer is left holding the bag.