Home / Government / How Obama’s Bailout of GM Subsidized China
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How Obama’s Bailout of GM Subsidized China

Written by Gary North on May 25, 2012

In 2009, the Obama administration turned over $49.5 billion in bailout money to General Motors.

The company knew what to do with this money. It created jobs in China, where it has 2,700 dealerships. It also had its Cadillac division sponsor a movie produced by the Communist Party of China that praises the history of the founding of the Party.

This is called “branding.” Message: “The Chinese Communist Party is the Cadillac of Communist parties.”

The head of GM bragged in a speech in China that 70% of GM’s cars are made outside the USA.

You say you never heard about this. I wonder why not. Keep reading. It gets worse.

GM in 2010 said that it had repaid the 2009 loans. It did, too, and then borrowed money back at 5%. It had been paying 7%, which was a subsidy at that low rate to a busted company. Such a deal!

Over half of the bailout money went to buy GM shares, not make loans. That $26 billion in shares will be repaid (bought back by GM), we are assured, when GM’s shares hit $50. GM’s shares are under $25 today.

You say you didn’t know all this. You say it smells like crony capitalism to you. Me, too. But our sense of smell doesn’t count.

Then there was the government’s decision to force GM bondholders to lose their right of first repayment in the bankruptcy, which the law had previously guaranteed them. Instead, the government turned 40% ownership over to the United Auto Workers for its pension fund. The bondholders got stuck with shares in the company, which are down almost 50% from the 2011 transfer price of $40. Remember that? There was no hue and cry.

Here is a brief documentary on The GM-China connection. It is marred by one thing. It says that the government bailed out GM and Chrysler to the tune of $80 billion. But $30 billion went to Chrysler. It’s still crony capitalism, but the documentary is on GM. My rule: never overstate your case. Just tell the story. This story is surely worth telling. No one has told it any better.

 

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29 thoughts on “How Obama’s Bailout of GM Subsidized China

  1. Gary Allan says:

    Why do liberals turn a blind eye at this kind of news, it seems like no matter what obama does, its always someone else to blame.

  2. I'm ashamed to drive a GM car, even though I can't affod to trade it in at this point.

    Just as the Dixie Chicks were ashamed of Bush, I am mortally mortified by Obama.

    • Grumpy Old Man says:

      Don't be ashamed of your old GM product it is the new GM that should be boycotted and any one buying a new GM product should be ashamed!!!

      • Dirk Benedict says:

        I've held off purchasing a new truck for this very reason. I would get a Ford only because, to my knowledge, they took no handouts. However, I can't help but think that the same union forces are at work at any American assembly plant, and that bothers me to no end. Do I think all union workers are collective bargaining communists? No, I don't. I was a union member of two unions in my life, and most were good people and many veterans. But, times have changed, and all unions are NOT alike. There has always been an inside organization in every one of the unions, supporting communist goals and taking money from those who know nothing about what their union truly supports. It was either the mob in the Teamsters and Longshoremen, or the key officials put into place by them in other unions, but they were there, and any "aware" union member knows this, and frankly, they tolerate it by not fighting it. It's a shame, and I wish I could just get a car or truck from a decent company without all this communist infilitration.

  3. Max Penn says:

    Could it be that we have sent 2 generations of Americans to goverment schools to be taught how to not think?

  4. Remeber, it was Bush who first bailed out GM and Chrysler. Had he not done so, Obama would have entered office with these two companies already in bankruptcy. This fact is often lost on conservative critics of the bailouts. As Dr. North said: "My rule: never overstate your case. Just tell the story."

    From the NY Times, December 19, 2008

    WASHINGTON — The emergency bailout of General Motors and Chrysler announced by President Bush on Friday gives the companies a few months to get their businesses in order, but hands off to President-elect Barack Obama the difficult political task of ruling on their future.

    The plan pumps $13.4 billion by mid-January into the companies from the fund that Congress authorized to rescue the financial industry.

    http://tinyurl.com/52obf6

    • THIS was done with the DEMS in full control of THE SENATE and THE HOUSE! MAYBE that's something the DEMS want to forget!

    • AD Roberts says:

      You play with who did what. WRONG QUESTION. OUr nation was built on capitalism. That means that WHEN a company is so badly managed, they GO BROKE AND SHUT DOWN. But the government has taught many CE'O's a new lesson. That is that they can do a sorry job and the government will bail them out.

      New LESSION. If you can't run the company, you will go down with the ship and you WILL GET CREDIT FOR IT. Can you imagine any other company hiring one of these incompetents THEN. LOL

    • Schmutz says:

      Actually, Nixon was the first to bail out Chrysler.

  5. I for one will NEVER BUY ANYTHING GM OR UNION MADE!

    • How can you determine what all is union made? I'd love to not buy anything union made.

      • Buy Chinese. I don't think the commies over there allow the people to form unions. If they do have unions, they are under the government's thumb.

  6. AD Roberts says:

    The first thing they should do to GM was to STOP THE MASSIVE spending on sporting event advertisement. Nobody has ever published just how much of the cost of the car comes from advertising. The second number should be on how much was spent on employees who were not "hands on" involved in the manufacturing of the car. That would include all the way to the top with those worthless leaches who draw HUGE bonuses;.

  7. haroldson says:

    How is it that every thing Obama does turns out to be tot the benefit of every one except the American people. Sooner or later he will be put out of office or America will go down the drain, Clean out and replace big government and the white house with Americans who are for America and the people of America, Make sure all government are veted and show back ground history and are legal American citizens.

    • Richard Opp says:

      BECAUSE he is NOT a citizen of the United States of America, and couldn't care less about the USA!!!

  8. I have friends from the Detroit area who after working hard in their own business, invested in gm and chrysler corporate bonds to fund their retirement plan. Needless to say, they suffered huge loss of principal when the gov't illegally destroyed their assets. They blame the great imposter for this horrific loss, and will do nothing to support this lowlife in the future. Oh, and by the way, they were foolish enough to help him get elected.

  9. General motors use to be the only vehicle I would drive. After the bail out I bought a ford , still drive a ford.

  10. Mr Obama's sole purpose in being in the White House is to cut the American people to the core. And bring the U.S. to its knees.

    • Richard Opp says:

      Again, because he is NOT a U.S. Citizen!!

      • gadfly32 says:

        Not only is Obama not a citizen, HE IS NOT ELIGBLE TO BE PRESIDENT. HE IS NOT A NATURAL BORN CITIZEN . HIS FATHER WAS A KENYAN, HE WAS BORN IN KENYA AND IS BURIED THERE. NATURAL BORN CITIZEN: A CHILD BORN OF AN AMERICA FATHER AND AN AMERICAN MOTHER ON U.S.SOIL..

  11. I find it amazing that a communist country would even ALLOW it's proletariate work force to "own" anything much less a car? Dealerships in china?? wow…how is that even allowed?

  12. You think this is bad, read about how Chrysler was given away to the Italian company Fiat for nothing with the backing of the US government loans.

    • Pete0097 says:

      At least the Chrysler loans did not screw the stockholders. only the taxpayers. As much as I like Mopar, they should have let them go to bankruptcy. It would have kept them going for a little while, let them get their credit under control, and shed their un-profitable ventures. The dealers would also not have been screwed so badly. There were a lot of old dealerships that lost their franchise and got nothing in return.

  13. jim28threg. says:

    I drive a Dodge Ram bought used for less than 1K.. Otherwise I'll never haveanother GM Chrisler product.

  14. El Kabong says:

    This is a toughy. My brother has worked for GM since 1978. He worked very hard on final assembly until he was about 50. He plans on retiring next year, when he is 55. Anyway, it's a shame that the top dogs at GM had to make dumb decisions that lead to needing a bailout. I still drive GM cars, because I feel that buying anything else would be a slap in the face to my brother. However, my current car is from the 2008 model year. I think most GM cars were still made in the USA back then?

  15. Navy veteran says:

    I owned many GM products (Chevys, Pontiacs,Oldsmobile,Cadillacs, GMC van& pick-ups) , at least 12 to 15, between 1956 and 1991; Plus a couple of Chryslar products and 3 or 4 Fords. About one every 2 to 3 years.
    Since 1991 I have had 2 Lexus' with good service and rare repairs. And both were bought 'used'.
    Will I buy another GM? Silly question.

  16. AD Roberts says:

    Remember, Papa was the one who kept talking about the NEW WORLD ORDER. And the Builderbergs have basically controled the Presidency AND Congress ever since.

    Want to blame someone. Blame Bilderbergs, CFR, and Trilateralists. Those who belong LIE about there involvement. But when someone is KNOWN to be a part of them, they should not be allowed to be dogcatcher. That would include Obama, Kerry, Edwards, Gingrich, Perry,, etc.

    The only one I know of that probably did not belong was Palin. And they bullied or threatened her out.

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