You and I are guaranteeing GM’s products
Over the weekend I caught a commercial in which new GM Chairman Ed Whitacre — the one who, upon taking his new jobs, famously said he doesn’t “know anything about cars” — touted a 60-day guarantee on the company’s vehicles. If you buy a GM product and find it unsatisfactory within 60 days (or 4,000 miles, whichever comes first), you can return it and get your money back.
So much for a car losing a great deal of its value when you drive it off the lot. This is one heck of a test drive.
This would seem to be a risky move for a company that was doing so poorly that it needed a $50 billion bailout from the federal government earlier this year. But what exactly is GM risking here? Not its money, but ours: Taxpayers, via the U.S. Treasury, own 61 percent of the company…so we are the ones guaranteeing GM’s products.
In case you’ve forgotten, we were the ones guaranteeing Fannie Mae’s and Freddie Mac’s products, too. And we know how that turned out…
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25 comments Add your comment
F-105 Thunderchief
September 14th, 2009
12:34 pm
GM would sell a lot more pickups if they named them F-105 Thunderchief and offered a supersonic flight upgrade package.
David Axelfraud
September 14th, 2009
1:06 pm
I will continue to drive my Honda. It has yet to fall apart.
Tray
September 14th, 2009
1:07 pm
We all know Obama overstepped his authority when he took over the auto industry. No one has the balls to stand up to him, because we are racists if we do.
All these left winged nut jobs need to realize that they are screwing themselves in the long run. Ahhh, but that is a democrat for you-never concerned about the future, just here and now and what can i get for ‘free’…
Saul Good
September 14th, 2009
1:23 pm
So you’re saying that it would have been better to just perhaps let GM fade away? Let every employee, supplier, after market supplier, and car dealer who worked for GM end up with no job, no insurance, and no hope with finding a new job in the economy they faced when they got their bailout? I can only guess that your position would be to have let them just fail. (Lets not forget all the stock holders that are left with worthless stock… some with the majority of their savings tied up in the stock… many of them current and former GM employees as well).
Yes, we’ve taken on massive debt, but there is no denying that the massive debt we took on during the new deal… and most of all during WWII is what took our country out of the Great Depression. The debt level (in current dollars) that we took on back then is much much larger compared to the debt we’ve racked up as a way out of the deep and dark hole left on January 19th, 2009. In fact it was being paid of steadily until Reagan got into office. He stopped paying the tab and incured more debt on top of the old debt. Clinton actually started to pay it back down back in the 90’s, but we all know what happened during the past 8 years.
SO….Do you believe that the best thing to do was just let GM become nothing but a historic legend? If not, what would your option have been out of this crisis?
Tom Wilkinson at GM
September 14th, 2009
1:35 pm
Two thoughts. First, GM has experience with this type of guarantee, and the return rate and cost are very minimal. And please keep in mind that the best outcome for both GM and the taxpayers is for GM’s great new vehicles to do well in the marketplace, and success in the marketplace requires marketing. A successful GM will maximize the return to the taxpayers. A failed GM will benefit no one.
jt
September 14th, 2009
2:02 pm
What do you expect when a Harvard lawyer is involved?
As a Harvard lawyer,
President Obama could talk all day about how to OPERATE a GM manufactored 1968 Camaro with the manual 3-speed transmission with an aftermarket Hurst shift kit,
but,
He wouldn’t be able to DRIVE one.
Paul/Wilson 2012.
Hillbilly Deluxe
September 14th, 2009
2:02 pm
Over the weekend I read that GM is restoring some of the white collar pay cuts they made. Haven’t heard anything on blue collar people getting any of theirs back. The more things change the more they stay the same.
Jefferson
September 14th, 2009
2:37 pm
You look like a BMW guy to me. Are you going to trade?
Joan
September 14th, 2009
3:04 pm
Somebody asked if GM should have been allowed to fail. Absolutely is the right answer. In a capitalist society you reward incompetence and failure to provide what the public wants with failure. About all those sad people losing their jobs–well, heck, I lost most of my portfolio of savings, and have no time to make it up. What about me. And what about all the other people in other (non-essential, I guess, industries). What makes GM employees/dealers special. You got it!! Union feet on Democratic throats.
@@
September 14th, 2009
3:27 pm
Guaranteeing government’s crap. YES WE CAN!
Kyle, can I say crap on here?
@@
September 14th, 2009
3:27 pm
YES I CAN!
El Jefe
September 14th, 2009
3:30 pm
How odd, the President now runs GM and GM is going to be importing Chinese cars. I guess the union signed off on this deal.
And to help GM, the President is putting a tariff on Chinese tires.
Does he even know what he is doing?
Kyle Wingfield
September 14th, 2009
3:39 pm
Saul Good: What I’m saying is that a company owned by the taxpayers, and on the hook (at least in theory) for $50 billion in taxpayer money, shouldn’t be risking even more taxpayer money to make guarantees about products which the car-buying public has voted against with its wallets. As for the bailout, I would have preferred a bankruptcy with real teeth.
And Jefferson: BMW? On a journalist’s salary??
Tom Wilkinson at GM
September 14th, 2009
3:53 pm
I encourage skeptics to check out the new products GM has in the showroom. I think you will be pleasantly surprised, and should you buy one, I’m pretty sure you won’t want to bring it back.
Disgusted
September 14th, 2009
4:37 pm
Doesn’t matter much to me. My last GM purchase was a brand new 1977 Chevy Caprice. The transmission blew out after 44,000 miles. The man who repaired it said the reason was that the transmission factory-installed on the car was too small for a car that size. It was Fords and Hondas for me after that experience.
F-105 Thunderchief
September 14th, 2009
4:53 pm
My wife had to have a new transmission in her Camaro four times. It was a lemon. Never again.
@@
September 14th, 2009
6:25 pm
And all because I made a generic comment about Wooten’s blog and the plethora of cretins and ignoramuses there?
Noooooo, AmVet, this is the post which inspired my comment.
Pontificate! Niiice, mystery meat!
Now look up the word erudite and use it an sentence, such as, ” I, whatever my gutless name of the moment is, am not very erudite and look like an oaf when I try.”
No matter how highly you regard yourself, it’s rare that I read your posts. If you said IT once you’ve said IT a thousand times. IT being the same tired observations of old.
mystery meat, cretins, ignoramuses and oafs
Well aren’t YOU special!
@@
September 14th, 2009
6:27 pm
DANGIT! There’s something screwy going on with this site.
Pardon the interruption.
Good One
September 14th, 2009
9:02 pm
We are paying for the salary increases they are giving back too…Like their people don’t make more than everyone else as it is.
Nick
September 15th, 2009
12:43 am
Any other time when the economy is on an upswing, GM would have been fine to have fail but to have had it fail within the time period of Depression 2.0 would have been absolutely devastating. Wall Street has gotten the biggest bailout (which they will eventually pay back) of them all due to the relative low risk involved. GM will probably never pay it back but at least we’ve delayed the inevitable to occur a bit later during an upswing. The importance of the green economy is to rescue Michigan and Detroit from a complete exodus. We still have a good deal of manufacturing in America but a lot of that is buoyed by the Rust Belt. If that were to have failed, we may reduce our manufacturing base to an inconsequentally small percentage of the overall economy thus dooming America’s exports and its’ ability to repay our debt to China.
I’m sorry but bailing out GM was the right move at the time (an emergency). It all sucks, but you can thank Wall Street for all of this.
Michael Honohan
September 15th, 2009
1:15 am
I am not disagreeing with the point here. But we need perspective. The Fannie Mae/Freddie Mac issue is a drop in the bucket compared to what went on with Goldman Sachs and AIG. We can argue all day long about what Obama is doing to try to fix the problem, but until Americans wake up and realize that the Republicrats turned a blind eye on our financial health and allowed profiteers to run rough shod on our economy, these things will continue to happen. And someone will have to pony and bail out the economy.
Like my conservative cousins, I fully support deregulation. We certainly do not need government pin-heads trying to run American commerce. What we need is not regulations, but laws. Just like every other sector of society. You follow the law – no more credit-default swaps backed by no money. No more creation of artificial bubbles. No more lying to consumers and investors. No more shame on they system build by Alexander Hamilton. You are free to trade legitimate instruments of real value backed by real products and services. Legitimate business risk should be legal; out-right gambling and market manipulation should be against the law. If you do not follow the law, you don’t get a $110 million fine for a $7 billion in ill-gotten game, you lose the 7 billion and go to prison. And if you know that a Madoff is robbing people (as many investment houses did) and you don’t speak up, you go to jail. Why should Goldman Sachs not have to follow the same code the rest of us citizens do? They made AIG thier bookie. We are all paying for it now. And we deserve it!
Americans need to speak up for America. We do not need brokers. With he Internet, we should all be free to exchange stocks, bonds, and money. Who says these robbers should control OUR money?!?! Open the exchanges directly to all citizens. Make the exchanges free and open markets to all and Goldman Sachs of the world will not own us or bring us down. We will not have to worry about the next financial collapse.
RULE OF LAW.
Saul Good
September 15th, 2009
8:12 am
Kyle,
You fail to mention that this is a LOAN that will be paid back to “we the people”… it’s not a clear handout. Citibank (I’ve been a stockholder of theirs for 15 years) is already going to be paying back the government by buying back their shares (well over the price we paid for them). It actually ended up being a PROFITABLE venture for the government. http://www.bloomberg.com/apps/news?pid=20601087&sid=acs7LZGlwiYU
FTA: “the New York- based bank’s stock price has gained since $25 billion of bailout funds were exchanged for common shares, the Treasury is sitting on a paper profit of $9.77 billion.”
Is it a practice we should always be involved in? Absolutely not, but special circumstances (like a near depression) call for special measures to ensure that we have stabilize the economy and get in back on the path to growth.
Dunwoody Mike
September 15th, 2009
9:07 am
Where was OUR bailout? Why did the rich, the bankers and corporation heads that ran our economy into the ground get money, but us working stiffs, the ones that are a paycheck away from disaster, got nothing?
Saul Good
September 15th, 2009
2:39 pm
Dunwoody Mike,
WHY?
“Your” bailout?… the economy is now ticking upward. All economists say so. Those laid off (in all sectors) got extensions on their pay outs. The one’s like yourself who are a ” paycheck away from disaster” got others who were kept from being laid off…. Sinking the economy into a deeper tumble into darkness. Those that don’t have money don’t spend. Just remember two things..WHO took us here…and WHO made the first payouts to the banks. It was NOT Obama. Yet is WAS him who put some controls in place. Now much of that money is being paid back. Just be glad that the deficit (like after the the Great Depression) is moving upwards…if not..complete disaster was upon us all. Massive spending was the only way out. Though I believe Kyle here to be highly intelligent, I think he needs to study the Great Depression a bit more. See the debt it took to bring us up… see how it was being paid off until Reagan decided not to. It’s NOT a republican or democrat issue…it’s one that ALL economists agree on..massive spending and massive debt accrued took us out of the abyss.
Kyle, I respect you taking on this job. I hope you will keep an open mind and let those speak of free will here. I suspect all will continue to get biased and confused as you move along on this new journey…
I’ll just back up what I’m saying about spending, paying off the depression, and Reagan… he’s NOT to blame…but all should remember what the tax rates where back then compared to now (based off of all I hear about “reducing taxes to stimulate the economy”…. it’s clear that THAT has never worked as well..
http://zfacts.com/p/318.html
To all he “spinners” out there…READ the article and look at the chart. We were paying off the debt until Reagan/Bush…Clinton WAS paying it back again… these are the “facts”… yet Dunwoody Mike…going all the way back to the Depression… debt had it’s roll. Had we tried to “balance the books” back then… this nation would have turned out very different. My own father was an professor, an economist, banker, accountant, and an attorney… As I got older..i learned much…in a NON-BIAS way… facts are facts when it comes to the numbers involved in history. ALL history tells you that the spending saved this nation… yet the “difference” NOW, compared to the last administration is that we “spent it over here…instead of spending it over there”… we’re creating wealth and putting money back into OUR economy. History shows that a STRONG middle class is hen this county thrives best of all…
Laschea
September 16th, 2009
2:03 pm
I wish like hell, they would stand behind this 2006 Chevy Malibu that I have that’s only valued at @$5,000 if that. Yes, thankful that I have a ride but unfortunately it’s worthless…..Trust me when this fiasco is over, I am going back home Honda/Acura, here I come……There should have been some type of cash for clunkers incentive or deal for indiviuals that are upside down like crazy!