Business

Bailout Blues: Despite $400M Bailout From GM, French Automaker Announces Mass Layoffs

Let‘s see if you’re familiar with the following:

1) The Obama administration invests more than $50 billion taxpayer dollars in General Motors

2) The feds, who won’t sell the stock, own about one-third of the company

3) The Obama administration’s “car czar” Steve Rattner forces out GM CEO Rick Wagoner and replaces him with Frederick “Fritz” Henderson

4) GM goes public in 2010

5) GM bails out French automaker PSA Peugeot-Citroen

6) GM scores itself a sweetheart tax deal

7) Shareholders claim they aren’t seeing any return on investment

Wait, what? What was that bit about Peugeot?

That’s right, GM, which still owes about $25 billion in TARP [Troubled Assets Relief Program] repayments, invested more than $400 million in a French car company that’s “drowning in red ink,” The Blaze reported in March.

And by “invested,” we kinda’-sorta’ mean “bailed out.”

In fact, Peugeot was is such poor shape when GM announced the bailout, er, “investment” that even ABC News accused General Motors of essential dumping “more than $400 million of taxpayer assets on junk bonds.”

And it gets worse. Check out this report from Associated Press:

Struggling French carmaker PSA Peugeot-Citroen, facing diving sales in crisis-hit southern Europe, announced a drastic cost-cutting plan Thursday to slash 8,000 jobs in France and close a major factory north of Paris, shocking workers and startling the government.

Saddest part: that report was released this morning.

“Company management announced the job cuts and closure plan during a meeting Thursday with its worker representatives,” the AP reports.

“The company, which warns it faces a first-half loss of €700 million ($858.2 million) this year, is trying to save €1 billion as it struggles to compete in Europe’s stagnant car market,” the report adds.

The AP puts on a brave face and looks for a silver lining:

Peugeot is hoping a new alliance with General Motors Corp. will allow it to return to long-term profitability. GM has been working hard to return its lossmaking European operations to profitability. It‘s European Opel and Vauxhall units have been a drag on the company’s earnings for a dozen years, including a $256 million loss in the first quarter and $700 million last year.

Under the alliance with GM, the American company became the French automaker’s second-largest shareholder with a 7-percent stake, behind the Peugeot family, whose stake dropped from 31 percent to around 25 percent.

What’s truly amazing about this report is the fact that there’s no mention of GM’s $400 million bailout to the company.

Wouldn’t that seem like an important detail? (But let‘s not get bogged down in who didn’t report what!)

Here’s a recap just in case you missed anything: The feds own one-third of GM, GM still owes taxpayers $25 billion, GM bails out Peugeot with $400 million, Peugeot is then downgraded by Moody’s and lays off 8,000 employees.

Huh. Along with some of our money, it looks like the people at GM also gave the French some of our unemployment.

Front page photo source.

Comments (42)

  • country_hick
    Posted on July 13, 2012 at 9:53pm

    Let’s see here;

    -The government bails out GM
    -The government still owns about 1/3 of the company but can’t sell the shares because we would take a $25 Billion dollar bath.
    -GM pays off some of the bail out with TARP funds (uses Visa to pay off the Mastercard)
    -GM/the government bails out a French auto company that is still bleeding money and now has to lay off workers.
    -GM/the administration has now been caught off shoring funds like they accuse Romney of doing and/or buying and trading in junk bonds like they accuse Wall Street of doing.

    Makes perfect sense to me.

    Report Post »  
    • MCDAVE
      Posted on July 14, 2012 at 6:58pm

      OBAMA is consistent …he has been a total failure at handling the tax payers funds …Everything he touches is tainted with total corruption..

      Report Post »  
    • rickc34
      Posted on July 25, 2012 at 10:31am

      Can we really afford 4 more years of Obama ? He could not run a lemonaid stand and make a profit if the lemons and sugar were free. Buy Ford they made it without tax payers money and build a much better product than GM and Chrysler. Romney is not the best choice but he is the better choice than Obama

      Report Post »  
  • watashbuddyfriend
    Posted on July 13, 2012 at 12:00pm

    And, like ALL others, they are looking for another handout!

    Report Post »  
    • teebubba
      Posted on July 13, 2012 at 1:49pm

      Yeah….the Frogs needed the $ 400 million to cover the cost of their nine week paid vacations and when that ran out they lay em off..

      Report Post » teebubba  
    • GUNSABLAZIN23
      Posted on July 17, 2012 at 10:36pm

      TeeBubba, AMEN!

      Report Post » GUNSABLAZIN23  
  • lembrandt
    Posted on July 13, 2012 at 11:51am

    Two things: Of course Peugeot/Citroen is having financial trouble and is laying off people – their cars are CRAP. That company should have, and would have, died years ago if France wasn’t keeping it afloat.

    And – is anybody surprised that shareholders in GM aren’t getting any returns on their investments? What kind of an idiot would have invested in GM anyway? GET THIS STRAIGHT people – GM, under the Obama administration is being run for ONE PURPOSE ONLY – the benefit of unions. They don’t care if you EVER get a return on your shares. It is my guess that they are basically stealing investors money, because they never actually plan on returning any money in the form of dividends.

    Oh, and one more thing – GM cars are crap too. They should all be sold for scrap metal.

    Report Post »  
    • DrocSemaj
      Posted on July 13, 2012 at 12:53pm

      LEMBRANDT, you, my friend, are absolutely correct. GM cars ARE crap (minus the Vette) and the French can’t do much right but fries and toast. Am I right? I’m right.

      Have we all gone mad?

      Report Post »  
    • MAMMY_NUNN
      Posted on July 13, 2012 at 1:31pm

      Not to worry the fox is guarding the hen house you are in safe hands.
      Unions they always eat their own.

      Report Post »  
    • StanO360
      Posted on July 13, 2012 at 5:13pm

      Well, I don’t think that all GM cars are crap, some have definitely improved. I personally find them fuggly in appearance and would not buy one (for philosophical reasons too).

      Report Post »  
  • scrudge
    Posted on July 13, 2012 at 11:48am

    Ah Yes….. wake up fRANCE… if “ g m ” goverment motors gets involved … it will be a DISASTER

    Report Post »  
  • turkey13
    Posted on July 13, 2012 at 10:38am

    The French should have ordered all new government cars like we did in the USA. Maybe they could put pressure on the Indians like we did here. Here in Oklahoma the two biggest tribes, Chickasaw and Choctow all have new GM cars also. In assume Obama told them he would cut off all Gov. Grant funds.

    Report Post »  
    • teddrunk
      Posted on July 13, 2012 at 11:18am

      …and yet..Chevy no longer has the Apache or Comanche pick up…strange.

      Report Post »  
  • teddrunk
    Posted on July 13, 2012 at 10:34am

    GM really helps car companies avoid ruin by their alliances. Isn’t that right Saab.

    Report Post »  
  • nzkiwi
    Posted on July 13, 2012 at 10:26am

    So when Mr Obama accuses Mr Romney of outsourcing jobs at Bain Capital again…

    Report Post »  
    • encinom
      Posted on July 13, 2012 at 10:41am

      Apples and Oranges, not to many Americans are commuting to jobs in France. Romney just created Chineses jobs out of what was once American jobs and is now lying about this. SO either he lied on the SEC filings or he is lying to the American public.

      Report Post »  
    • nzkiwi
      Posted on July 13, 2012 at 11:41am

      testing…

      My reply won’t go through.

      Report Post »  
    • nzkiwi
      Posted on July 13, 2012 at 12:02pm

      Well, that’s just weird.

      I can make these comments but my reply to Encinom won’t go through.

      ENCINOM!

      WHAT HAVE YOU DONE!!

      Report Post »  
    • StanO360
      Posted on July 13, 2012 at 5:16pm

      Encicom, even if it’s true, it means nothing. And doesn’t help make Obama look good.

      So if he took over a failing company and outsourced jobs there is still a net gain of jobs and economic activity in the US. Assuming all of the jobs would have been lost. Additionally, the point is why has the government created such a hostile and restrictive environment for business? The biggest cause of a lot of high value manufacturing leaving is taxes and regulation.

      Report Post »  
  • Chromo200
    Posted on July 13, 2012 at 10:11am

    I wonder what the Socialist French President going to do for a bailout .. Hold on your wallet, we will be paying for this with the idea that if we don’t prop up France they will go under and therefore wreck our own economy. Then there will a fund raiser for Obama in Europe and these autoworkers will contribute to his reelction.

    Report Post »  
  • Individualism
    Posted on July 13, 2012 at 10:06am

    All the car companies that took bailouts made bad cars compared to their competitors and still do.

    Report Post » Individualism  
  • Detroit paperboy
    Posted on July 13, 2012 at 10:04am

    I actually owned a Peugeot one time, it was a pity purchase from a friend who needed money, I shoulda just given him the money….talk about a piece of crap, just the fact that GM would have anything to do with Peugeot , tells me they will be bankrupt again….ughhhh,French auto engineering is awful !!! Just junk…..

    Report Post »  
  • Drip-T
    Posted on July 13, 2012 at 9:54am

    It still comes down to philosophy… Liberals believe that the government should run everything. The money needed to run everything is there for the taking, just take it from those who earn it & give it to those they choose. Conservatives believe it is individual choice. If a companies management fails to produce, they chose incorrectly & there are consequences. It really is a matter of perspective. I still believe we should never have assisted the automakers. The market would have fixed itself. Sure there would have been tough times but the holes in the auto supply market that would have been created by GM & Chrysler failing, would have been plugged by another “healthier” auto supplier & things would have moved on.

    Report Post » Drip-T  
  • joe alexich
    Posted on July 13, 2012 at 9:41am

    We been had by Obama,what should we do.

    Report Post »  
  • NOBALONEY
    Posted on July 13, 2012 at 9:14am

    Another headline that the MSM has ignored. Can‘t you see we’re having trouble getting the truth out, and the time is running short.

    Report Post » NOBALONEY  
    • JRook
      Posted on July 13, 2012 at 9:56am

      No doubt they should hire Romney and Bain Capital to move all manufacturing to China and India, make money in the short run by exploiting the labor and looting the pension funds. Then declare bankruptcy. No doubt that if this story was how Romney and Bain capital were addressing the downturn in sales and performance of Peugeot it would be a positive story.

      Report Post »  
    • Detroit paperboy
      Posted on July 13, 2012 at 10:10am

      Jrook
      The main reason companies move overseas is because of the unfriendly business environment that has been created here, by our local, state and federal GOVERNMENTS…….if I could move my company ,I Would !!!!! Good for Bain……

      Report Post »  
  • Sherlock01
    Posted on July 13, 2012 at 8:50am

    Got to love how the goverment works… Give money they got form us to unions who give it to other countries.

    Report Post »  
  • ss1129
    Posted on July 13, 2012 at 8:36am

    http://online.wsj.com/article/SB10001424052702303740704577522053739434374.html

    Dont let things like facts get in the way. I love America as much as anyone and cant wait for Obama to hit the bricks, but when it comes to GM you guys are on some zombie drug. Its sad that you would buy a toyota over a GM Ford or Chrysler vehicle. Its even more sad if its just because of the bailout. The bailout is done, there is nothing we can do about it. A real patriot would want OUR companies to crush our foreign competition. Take a look at American car sales in Japan, its almost non-existant because they are loyalists, yet GM is still #1 in the world. That should tell you something. Take off the Obama hate glasses and root for the home team for Gods sake.

    Report Post »  
    • Drip-T
      Posted on July 13, 2012 at 10:00am

      Just because GM fails, what makes you think we automatically choose a foreign company? I grew up in a GM household but their stupidity over the years made them the failure they are today. Management agreeing to allow the Unions to bleed them dry has ended in complete disaster for GM (if not bailed out by the government) I insist that if GM and Chrysler were allowed to fail, through their own decissions & rightfully so, that others would have filled the holes left in that market. Sure alot of that probably would have been foreign owned, but new AMERICA business people would have used their money, their efforts, and created AMERICAN owned competition to take back what was always American… the auto industry. Now we are still beholden to the government…

      Report Post » Drip-T  
    • CPLGEORGE
      Posted on July 13, 2012 at 10:53am

      BULL PUCKEY! To be polite. How many LEMONS does one have to endure because of poor design, lousy construction and a “tough crap” attitude before you give up on them? As of a couple of months ago, they were still catching UAW workers smoking pot and drinking their lunch in the Union parking lot. Most of the so-called “foreign” companies are now building cars right here in the USA in non-union right to work states. Bailing out GM is like loaning your brother-in-law $100 so he can buy food, and gives half to his neighbor to buy drugs with.

      Report Post » CPLGEORGE  
    • StanO360
      Posted on July 13, 2012 at 5:22pm

      I agree with Drip, if they had gone bankrupt and came out of it without giving big gifts to the unions, I would look at them as equals in the marketplace. Of course, Ford has gained in my viewpoint for not taking bailouts, in effect risking the company.

      Report Post »  
  • eaglesview
    Posted on July 13, 2012 at 8:33am

    Hey Barry,
    My money went to improperly take over GM, who in turn gave it to the French ?.
    With the money that Fiskars took back to Sweden, I guess we’ve become the backdoor IMF for Europe ?.
    You want to raise taxes to support this kind of behavior ?. Ridiculous !.
    You’re shameful, and have wasted a once in a lifetime opportunity as the first black President.
    Be gone.

    Report Post »  
  • SocialistSlayer
    Posted on July 13, 2012 at 8:23am

    This is what happens when the government controls our companies. They funnel money into other “projects” and to hell with investors. You couldn’t pay me to invest into Government Motors – What a joke!

    Report Post » SocialistSlayer  
  • lukerw
    Posted on July 13, 2012 at 8:03am

    This is BS — We are giving Pay Offs because of Promises!

    Report Post » lukerw  
    • Bum thrower
      Posted on July 13, 2012 at 8:26am

      Hey man, chill….it‘s just a new twist to ’hope and change’…….you can count, er bank, on it!!

      Report Post »  
    • db321
      Posted on July 14, 2012 at 4:35pm

      Luker – What is this “We Sh&t. From the moment Obama took office I’ve felt like I have had a gun to my head.

      Yes, unions, are just like the Blacks, Illegals, and Women on Birth Control they are all Useful Idiots in the eyes of this administration. They mean absolutely nothing to Obama except for a vote and a little bit of protest at Wall Street.

      When Obama takes over as dictator, “all Government entitlement programs will end.” If you don’t work, you don’t eat. Retire Ha Ha. You can’t retire in a Communist Country. You idiots would be taking Obama’s money now and he does not like that.

      I do want you to enjoy Communism with the same enthusiasm that you have whe, you talk about Conservatism and when you go to the polls to vote. Suckers!

      Report Post » db321  
  • jackact
    Posted on July 13, 2012 at 7:58am

    The manifestation of organized labor destroys all it touches.
    Is this no different than the Obama regime sending billions in stimulus money to ‘bail out’ public employees in our states?
    Once the vig is accepted failure quickly follows.
    Lesson learned…..NOTHING is too big to fail.

    Report Post »  
  • snapperman
    Posted on July 13, 2012 at 7:58am

    Outsourcing with taxpayer money by the Obama administration -

    Report Post »  
    • johnjamison
      Posted on July 13, 2012 at 8:23am

      Just what I was thinking. Obama outsource 500 million in U.S. TAX DOLLARS to a car company in Finland. aka Fisker. 1.4 Billionin U.S. TAX DOALLRS to SUN ONE so they could build a plant in Mexico. 50 billion to G.M. so they could bail out french companies,build new palnts in China,Mexico,and Europe. Hundreds of Millions to GE SO THEY COULD BUILD PLANTS IN CHINA.
      He used Tax Dollars to purchase wind turbines from spain. HELL,EVEN THE U.S. OLYMPIC TEAMS ARE WEARING UNIFORMS AND FORMAL ATTIRE MADE IN CHINA. And that’s the tip of the ice berg as far as outsource U.S. TAX DOLLARS IN THE Obama administration. And he has the nerve to ATTACK Romney on outsourcing private investors capital at Bain. THE HYPOCRIT IN CHIEF.

       
  • HKS
    Posted on July 13, 2012 at 7:57am

    I wonder If Obama will mention that in his commercials. He bailed out all the car industry’s. Maybe he can get a few French votes, and we know he loves votes and as this crap comes out, he’s going to need them.

    Report Post » HKS  
    • biohazard23
      Posted on July 13, 2012 at 8:54am

      Well, it’s not like his DOJ is going to enforce voter laws so yeah, he might be looking for a few French votes.

      Report Post » biohazard23  

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