More Taxpayer Money Down The Drain

And you thought the Chrysler bailout was a bad deal for taxpayers. Watch Obama crow about how proud he is of himself for cutting a drop in the bucket $17 billion from his $3.5 trillion budget.

See also:
Obama touts $17 billion ‘lot of money’ budget cuts
Obama seeks $17 billion in U.S. budget savings

But wait, what about General Motors, the too big to fail company that we’ve already shoveled $15.4 billion into, how is our taxpayer investment in that going? The answer is, not good. We could have let GM go bankrupt back in November, but no, that was unthinkable! Well, guess what, GM will be in bankruptcy by the end of the month and if you think we’re ever going to get our $15.4 billion back you’re crazy.

GM Posts $5.98 Billion Loss Amid Steep Drop in Revenue

General Motors, facing the prospect of bankruptcy, posted a loss of $5.98 billion for the first three months of this year as revenue continued to slide because of the economic crisis and slumping auto sales.

GM’s losses were offset somewhat by the company’s restructuring efforts and by an infusion of loans from the federal government, the automaker said yesterday.

GM has until the end of the month to cut costs further and win stakeholder concessions. If it fails, the government will likely force it into bankruptcy protection.

GM lost $9.78 per share, compared with a loss of $5.80 per share, or $3.28 billion, a year earlier. Cash on hand totaled $11.6 billion — approaching the minimum reserves needed to continue operations.

Revenue fell 47 percent to $22.4 billion, compared with revenue of $42.4 billion in the same quarter last year, as GM cut production. Ray Young, GM’s chief financial officer, warned that such a drop could be dangerous.

“Once you start losing revenue, you get yourself into a vicious circle in which you cannot recover,” he said. Talk about bankruptcy has pushed customers even further away from dealerships, Young said.

See also:
G.M., Leaking Cash, Faces Bigger Chance of Bankruptcy
US would facilitate GM bankruptcy, if needed -Geithner

And just what is soon to be bankrupt GM doing with our $15.4 billion in taxpayer money, besides paying for gold plated UAW retirement and health care benefits? Can you say insult to injury?

GM hosts fleet buyers at spa in scaled back event; critics unmoved

Just weeks before a deadline that could send it into bankruptcy, General Motors is entertaining 500 of its biggest customers at a luxury spa and golf course in Arizona.

GM, (GM) which has borrowed $15.4 billion from the U.S. government in the past six months, shipped in 150 cars and trucks to the event this week at the Sheraton Wild Horse Pass Resort & Spa, and paid for airfare and hotel lodging for 90% of the guests.

The affair is scaled back from previous years, says GM spokesman Terry Rhadigan. Guests have to pay for their own golf outings, he says, and most of the days are packed with informational sessions on GM’s 2010 product line. The guests are GM’s fleet and corporate customers, which accounted for 27.6% of GM’s business in 2008. Fleet customers can buy dozens of vehicles at a time.

Well, hey, at least they made the taxpayer funded junket bingers pay for their own golf. And now look at what GM is planning to do after we finish paying for their bankruptcy.

Under Restructuring, GM To Build More Cars Overseas

The U.S. government is pouring billions into General Motors in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan, many of the company’s new jobs will be filled by workers overseas.

According to an outline the company has been sharing privately with Washington legislators, the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double.

The proportion of GM cars sold domestically and manufactured in those low-wage countries will rise from 15 percent to 23 percent over the next five years, according to the figures contained in a 12-page presentation offered to lawmakers in response to their questions about overseas production.

As a result, the long-simmering argument over U.S. manufacturers expanding production overseas — normally arising between unions and private companies — is about to engage the Obama administration.

Essentially in control of the company, the president’s autos task force faces an awkward choice: It can either require General Motors to keep more jobs at home, potentially raising labor costs at a company already beset with financial woes, or it can risk political fury by allowing the automaker to expand operations at lower-cost manufacturing locations.

“It’s an almost impossible dilemma,” said former labor secretary Robert B. Reich, now a professor at the University of California-Berkeley. “GM is a global company — so for that matter is AIG and the biggest Wall Street banks. That means that bailing them out doesn’t necessarily redound to the benefit of the U.S. or American workers.

“More significantly, it raises fundamental questions about the purpose of bailing out these big companies. If GM is going to do more of its production overseas, then why exactly are we saving GM?”

That’s exactly the ~$30 billion dollar question, why are we bailing out these two car companies that bleed money like hemophiliacs? The answer to that is easy, so Obama can protect the UAW as much as possible. You can already see that from the progress of the Chrysler bankruptcy. The Obama car czar Steven Rattner, is literally bullying a deal throgh bankruptcy court that heavily favors the UAW interests by trampling the Constitutional rights of more senior lien holding creditors. It’s a big, disgusting sham so far, expect the General Motors bankruptcy to be just as bad and probably much worse.

/and remember, while, on one hand, Obama brags about cutting $17 billion, much of it cuts in defense programs, less than 1/2% of his stupeniously bloated $3.5 trillion budget, the largest in American history by a wide margin, keep in mind that, on the other hand, he’s going to flush about $30 billion down the road to bankruptcy toilet bailing out his UAW buddies at Chrysler and GM and you’re paying for it