GM CEO promises profit for taxpayers

[WA_Vol]

DETROIT (CNNMoney.com) -- General Motors Chairman and CEO Ed Whitacre promised Monday that taxpayers will make a profit on the $50 billion that Treasury has sunk into the company over the past 13 months.
"I think the government's investment is well placed and I think they'll make a lot of money," Whitacre told reporters after an event at the annual auto show here Monday morning. "It won't be too long."
The promise of profits on the investment, which was echoed by GM Vice Chairman Bob Lutz in an interview with CNNMoney.com Monday, is quite a bit more bullish than any previous forecast made by a GM executive.

GM has previously said it would repay a $6.7 billion loan that it received from Treasury by June of this year. It has already made the first payment of $1 billion.
In order for the rest of the money to be returned to taxpayers though, GM will need to file for an initial public offering of its stock so that Treasury can sell its 61% stake in GM.

GM CEO promises profit for taxpayers - Jan. 11, 2010

 

[WA_Vol]

Maybe Detroit has turned the corner:

Ford sweeps Detroit Auto Show awards - Jan. 11, 2010

DETROIT (CNNMoney.com) -- After finishing off an enviable year for a domestic automaker, Ford Motor Co. won both the North American Car and Truck of the Year Awards presented Monday at the start of Detroit's North American International Auto Show.
The Ford Fusion Hybrid sedan won Car of the Year and the Ford Transit Connect van won Truck of the Year.

 

[BeecherVol]

Sounds like our current leadership.....oh wait.

 

[JTrainDavis]

Go figure, the company with some sort of plan other than to let Washington take over is actually being productive and competitive.

 

[WA_Vol]

I would love for this bailout money to get paid back, and Detroit get back on their feet.

 

[volinbham]

So GM would need a market capitalization of close to 100 billion for the taxpayer to make money (not counting the time value of money).

I believe it's highest ever market cap was around 50 billion.

 

[shootermcgavin7]

GM CEO promises profit for taxpayers - Jan. 11, 2010

I doubt it.

 

[shootermcgavin7]

So GM would need a market capitalization of close to 100 billion for the taxpayer to make money (not counting the time value of money).

That's not 100% true if they are paying dividends, but you are correct big-picture-wise.

The interesting thing is that equities generally are inflation-protected.......so GM may be a better investment than government bonds with the same level of safety.

 

[BigPapaVol]

That's not 100% true if they are paying dividends, but you are correct big-picture-wise.

The interesting thing is that equities generally are inflation-protected.......so GM may be a better investment than government bonds with the same level of safety.

only assuming that the government can continue to support the company to the point of Rf. It's not politically palatable for the government to pour more money into the sinkhole, so it isn't the same. GM has a legitimate chance of going to 0.

 

[lumberjack4]

What's funny is that even if GM makes a profit on the bailout money Obamoneygrowsontrees isn't going to pay off part of the debt with it, but will find social programs to waste the money on.

 

[BigPapaVol]

What's funny is that even if GM makes a profit on the bailout money Obamoneygrowsontrees isn't going to pay off part of the debt with it, but will find social programs to waste the money on.

That's true. There's an unwritten DC rule: once pissed away, always pissed away.

 

[droski]

an obama honk was on cnbc saying that gm should follow ford's lead. ummmmm really?

 

[Arclight]

Since when has the gov' been successful at running anything. Buy a FORD.

 

[shootermcgavin7]

only assuming that the government can continue to support the company to the point of Rf. It's not politically palatable for the government to pour more money into the sinkhole, so it isn't the same. GM has a legitimate chance of going to 0.

T-bills have been negative in real terms multiple times the past decade.

Anyway, that point was as aside anyway.

 

[Cartervol]

Anyone get the feeling these new GM vehicles won't be worth a crap?

 

[MG1968]

Anyone get the feeling these new GM vehicles won't be worth a crap?

GM vehicles haven't been worth a crap since the X-bodies. Every once in a while they'll stumble on to something that works, like the CTS-V and GTO/G8 (which isn't even an American car, it's Australian). But they're just as apt to release crap like the Daewoo-built Aveo and the dustbuster minivans.