Friday, May 25, 2012

Obama And The GM Quagmire

Instapundit blogs and links to others that point out that if Facebook's low performing IPO is a scandal, then what about GM? Not to mention that criticism by Obama of Bain Capital's activities is unwarranted, considering that Bain's approach is the same as that which the Obama Administration did to GM.

Significantly unlike Facebook however, GM's bailout and investment is with taxpayer dollars, rather than individuals and entities paying their own money and taking their chances. Oh, and Ezra Klein doesn't seem to be upset that he didn't get a chance to invest in GM. Then again, as a taxpayer he is invested with GM with no upside in sight. The Obama administration seems to be inexorably tied to the GM bailout with no way out in sight, and that is now confirmed.

The Detroit News: Treasury: No schedule set to exit GM

The Obama administration's nearly three years as part owner of General Motors Co. isn't going to end anytime soon.

The official overseeing the government's 26 percent stake in GM says there's no timetable for exiting the Detroit automaker.

In a Detroit News interview this week, Tim Massad, the assistant Treasury secretary who oversees the $700 billion Troubled Asset Relief Program, said investors aren't giving GM enough credit.

GM stock has fallen sharply since its $33 IPO in November 2010, and closed Thursday at $22.37, down seven cents, or 0.3 percent.

"Our perspective is that the company has made real progress, but the market hasn't given them as much credit for that as it might," Massad said.

Last October, in the face of the steep sell-off of GM stock, the Treasury shifted course and said it no longer planned to exit the automaker as soon as was practical.

At current prices, the government would lose more than $15 billion on the $49.5 billion bailout.

It's a quagmire all right, and the Obama administration has no timetable or exit strategy for pulling out.

For a guy that demands an exit strategy for every engagement, it's a pity he doesn't seem to have a workable one for GM.

1 comment:

Tevez said...

Hi

I read this post 2 times. It is very useful.

Pls try to keep posting.

Let me show other source that may be good for community.

Source: General Motors interview questions

Best regards
Jonathan.