Will The Obama Push GM Into Bankruptcy?
That taxpayers are never going to recover their “investment” in Government Motors has been a foregone conclusion for a while. But their losses are mounting beyond what many, including me, had predicted. Last year, top auto analysts had expected GM’s stock prices right now to be around $43 per share. Even that price, I had noted at the time, would represent a $13 to $19 billion loss on the 500 million or so shares (26% of the company equity) that taxpayers still hold in the company.
But, as it turns out, that figure was too rosy! GM stock prices have been hovering around $20 lately – even though the market is at a recent high. This means the losses will be closer to $26 to $38 billion – and that’s not including the $15 billion in tax write offs that the administration illicitly handed GM during bankruptcy.
But the depressing thing is that despite this taxpayer moolah, GM might be headed for yet another bankruptcy. That at least is the claim of Louis Woodhill’s provocative piece in Forbes. And the main reason, says Woodhill, is that GM makes crappy products.