GM made $22.6 billion. We lost $10.6 billion

[autigeremt 6,970]

http://money.cnn.com/2014/05/29/news/companies/gm-profit-bailout/index.html

In the five years since GM's bankruptcy it made $22.6 billion. But taxpayers lost $10.6 billion on bailout that saved the company.

NEW YORK (CNNMoney)

After filing for bankruptcy five years ago, General Motors is now one of the most profitable companies in the world.

GM has earned a stunning $22.6 billion since the dark days of the financial crisis, when the automaker was bailed out by the U.S. government. Taxpayers didn't fare nearly as well. They'd lost $10.6 billion by the time the U.S. Treasury department closed the books on the $49.5 billion bailout in December.

GM (GM, Fortune 500), which filed for bankruptcy five years ago this Sunday, has repaid everything it was obligated to pay Treasury. Taxpayers came up short because the U.S. decided to buy GM stock to keep the automaker alive instead of giving it a loan and saddling it with more debt.

Although GM has been very profitable since 2009, its stock price never rose to a level that let Treasury to recoup that investment.

"Our goal was never to make a profit but to stabilize the auto industry," said one Treasury official on background the day it sold its final GM shares. "By any measure, we succeeded."

Related: GM cars sold: 12.1 million. Recalled: 13.8 million

GM is now one of the 40 most profitable companies in the nation. It's more profitable than a third of the companies in the Dow, including Verizon (VZ, Fortune 500), American Express (AXP, Fortune 500), Boeing (BA, Fortune 500) and 3M (MMM, Fortune 500).

But the costs related to its controversial ignition switch recall essentially wiped out its profit in the first quarter of this year. GM estimates that repairs to the 15.8 million vehicles it's recalled this year will cost at least $1.7 billion. And that doesn't include any legal costs, fines or victim payouts that it will face.

GM has admitted that its employees knew of an ignition switch problem in millions of its cars about a decade before it ordered a recall in February of this year. The flaw has been tied to at least 13 deaths, though government safety regulators expect that death toll will rise once the investigation is complete.

Critics of the GM bailout say the deal should have been structured so that a portion of future profits would go to repay taxpayers.

"We're certainly glad they're making a profit now, but it would have been nice if there had been clawback provisions to make taxpayers whole," said Scott Hagerstrom, Michigan state director of the Americans for Prosperity, a public interest group opposed to government spending.

Related: Taxpayers made $52 billion on Geithner's bailouts

GM said that if it paid the Treasury more than it owed under terms of the rescue plan, the automakers' shareholders could sue.

Taxpayers also lost $1.3 billion on the bailout of Chrysler Group, but made money overall on the $700 billion in federal bailouts issued during the financial crisis.

GM's post-bankruptcy profitability is in stark contrast to the $100 billion it lost in the 4-1/2 years leading up to its filing. The bankruptcy helped it reach new labor agreements, and shed debt, non-productive factories and weak brands and dealerships.

"We will always be grateful for the second chance extended to us and we are doing our best to make the most of it," said then GM CEO Dan Akerson on the day the U.S. sold its remaining GM stake.

[mike650h 1]

This answers the question to why I stuck with Ford when I bought my new truck last year...

[Strychnine 1,804]

This answers the question to why I stuck with Ford when I bought my new truck last year...

And why the only GM's I've been willing to buy for the last several years were the ones made in Australia.

[DKW 86 7,726]

A guy I go to church with wants to sell my daughter a Cruze. I cant get around the bad deal we the people got.

She may end up with a used Honda.

[Strychnine 1,804]

A guy I go to church with wants to sell my daughter a Cruze. I cant get around the bad deal we the people got.

She may end up with a used Honda.

In terms of GM's history of small cars, like the Cobalt and Cavalier, the Cruze is quite good. It bankruptcy for them to realize that they needed to build something other than fleet/rental cars, and trucks/SUVs for everyone else.

[DKW 86 7,726]

Hey Kevin, nice to see you around again.

[Auburn85 434]

I know I've posted this in the past, but it's worth posting again.

https://www.youtube.com/watch?v=GwM1YqE5crw

Amazing isn't it? He as a taxpayer was used as collateral to fund the auto bailout. Then, when GM went bankrupt, he gets screwed. Ultimately, he screwed himself by being the collateral? And what's sad, he had no choice in the matter from start to finish of the bondholders screw job. Oh sure, he didn't deversify his IRA and so forth. That's not the point. Why did this man (and many others like him) have to go through this? They were important enough to be collateral to bailout GM. The government provided these easy non 100% paid back loans, but they couldn't throw the bondholders a little more? We bailed out Fannie, Freddie, the Auto Makers, but we couldn't come up with the additional crumbs to bailout the bondholders?

So when you see GM and the other bailed out companies making these profits, remember what happened to get them to this current point.

[AURaptor 1,137]

Wow. I was about to say Gus Malzahn sure did get a bump in his contract.