GM Bails out French Automaker?
- Posted on March 9, 2012 at 12:49pm by
Becket Adams
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Although General Motors still owes U.S. taxpayers $25 billion, that didn’t stop the Detroit automaker from investing more than $400 million in a French car company that’s “drowning in red ink.”
Yep. As of last week, GM has a 7 percent stake in PSA Peugeot Citroen. And because U.S. taxpayers still own approximately one-quarter of GM, they technically own part of Peugeot.
“Peugeot can undoubtedly use the cash,” ABC News report, “Last year, Peugeot’s auto making division lost $123 million.”
Make matters worse, on March 1 (one day after GM spent over $400 on the French company) Moody’s downgraded Peugeot’s credit rating to junk status with a “negative outlook,” citing “severe deterioration” of its finances.
Translation: “General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds,” ABC reports.
What was the reasoning behind this investment?
According to GM, the deal supposedly gives them access to Peugeot’s “expertise in small car and hybrid vehicle technology” and will allow both GM and Peugeot to “save money by pooling their resources,” ABC’s Jonathan Karl writes.
“But auto industry analysts find the deal mystifying,” he adds.
An analysis by auto consultants IHS reads:
It is “somewhat baffling that GM is willing to get involved in an alliance that it frankly does not need for size or complexity, while still avoiding any public plan to rationalise its European production, cut costs, or deal with labour rates.
Indeed, it seems everyone is having a hard time making sense of GM’s investment decision.
“So let’s get this straight,” Ed Morrisey of Hot Air writes, “As soon as GM got freed up a little from its own irrational production costs and could deal a little more effectively with its own labor rates, it took cash that it still owes taxpayers and sunk it into a car company whose problems in the exact same areas are as bad or worse as GM’s was before the bailout.”
In so many words, yes.
“What a great investment! Why, that sounds amazingly like the kind of investment expertise that cost taxpayers $535 million in Solyndra,” Morrisey adds.
There may be a lesson to GM’s Peugeot investment. As Morrisey writes:
This is what government bailouts buy. Instead of clearing the decks at GM and freeing their assets through normal bankruptcy so that more competent hands could put them to better use, the government intervention maintained the same status quo and funded it with taxpayer assets. It’s no great surprise, therefore, that the leadership at GM would toss away money owed to taxpayers to buy a stake in another failing enterprise.
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Comments (70)
jimmiedoss
Posted on March 9, 2012 at 3:34pmI love how failed companies invest in failed companies… does something seem wrong to anyone else? What a crock… granted it will probably sell better than the volt…
Wave good bye to your tax dollars and more important your Liberty!
Report Post »HKS
Posted on March 9, 2012 at 3:57pmDidn’t GM use to own this company? Maybe they are bailing out themselves.
Report Post »MCDAVE
Posted on March 9, 2012 at 5:08pmBet Obama gets a big campaign donation
Report Post »MCDAVE
Posted on March 9, 2012 at 5:18pmLook at all his other failures …the one common factor is,they are all Obama campaign contributors. He cares nothing if tax dollars are wasted or stolen,as long as he gets his donations
Report Post »db321
Posted on March 9, 2012 at 5:27pmThis is like the pay phone industry bailing out Zippo Lighters.
Report Post »piper60
Posted on March 9, 2012 at 6:07pmI agree, but you have to consider, that this is the car company that gave us the Volt. Not a lot of marbles rolling around in their craniums.
Report Post »AProudConservative
Posted on March 10, 2012 at 10:45amI bought a used Peugeot back in the 70′s. Worst car I ever owned. I owned it for 18 months, and it cost me $5 more per month to maintain it than what the car payment was. Great thinking GM.
Report Post »mr.goodvibe
Posted on March 10, 2012 at 10:38pmThe headline should read “ American Taxpayers Bailout Failrd French Automaker”
Report Post »Ghandi was a Republican
Posted on March 9, 2012 at 3:30pmSo- We borrowed money from China, force GM into bankruptcy stealing the shareholder’s worth. Gave it all to the Unions so they could make us a pet rock called the Volt that we couldn‘t pay people to buy and then took what was left of what GM owes the indebted taxpayer to buy into a French automaker so obama’a Czars, inciters and Union fat cats will then try to force to unionize out of the industry altogether. It all sounds like a ruse to increase GM production by attrition.. Way to go alinsky..
Report Post »NoNannyState4me
Posted on March 9, 2012 at 6:42pmDont’ forget PEWJOE will now be sold to Fiat for 2 cents on the dollar and Oblama will call it a great american success story of saving the auto industry.
Report Post »Apple Bite
Posted on March 9, 2012 at 3:12pmWhat can we do to stop those idiots? They’re still responsible for allowing SAAB to fall part to the point of irrelevancy….
Report Post »Just in time
Posted on March 9, 2012 at 2:57pmThats ok, I’m sure the French auto maker will give all of us US tax payers a car. You know for reperations due to our forced servitude to our govt. It will happen, NOT
Report Post »babylonvi
Posted on March 9, 2012 at 2:57pmWho gave them the authority to do this with our money. We should call in our loan IMMEDIATELY and if this causes another failure, so be it.
Report Post »Conservative2
Posted on March 9, 2012 at 2:47pmNothing more than Obama’s covert way of Redistribution of wealth, many thought this redistribution of wealth was among the Americans, think again!
Report Post »Obama views every American as the 1 percenters of the world, hence the world redistribution of our countries’ wealth!
MCDAVE
Posted on March 9, 2012 at 4:53pmyes 100% correct
Report Post »MCDAVE
Posted on March 9, 2012 at 5:05pmAlso watch to see if a large campaign contribution is coming to Obama…I would love to know how much of his campaign funds were originally our tax dollars…given Obama’s track record for investing our tax dollars ..Its time to take the checkbook away..
Report Post »louie louie
Posted on March 9, 2012 at 2:45pmI wonder how much Peugot promised to contribute to Obama by way of GM’s union owners to get this deal from Government Motors?
Report Post »Anonymous T. Irrelevant
Posted on March 9, 2012 at 2:22pmThis only makes clearer, Obama’s statement that France is our best ally.
Report Post »1TrueOne55
Posted on March 9, 2012 at 2:11pmThis is how Unions in Charge work now. They are part of the decision making process and they justify bailing out their brothers in work at Peugeot/Citroen by purchasing a stake in the company’s patents and research.
GM has been doing Diesel/Electric (Hybrid) technology for decades with Locomotive(train) power plants but on a larger scale. But because Europe has a shorter route to diesel/electric cars because they drive more diesel cars in the EU. If it were not for the EPA we could be driving more fuel efficient cars in diesel and in CNG (Compressed Natural Gas).
The new Dodge vehicles were to be powered by CNG according to articles a few years ago but that option is not available, what changed? The Feds have killed the CNG industry because they would be cleaner and more efficient. CNG pollutes less and we have more of it than Carbon based fuels like Gasoline and cars can be converted and run on them. I have driven work trucks in the 70′s at Boeing manufactured by Nissan because they polluted less and had to be used inside a building so exhaust fumes and pollution had to be kept to a minimum, they also run their forklifts from Toyota and Nissan on CNG.
Report Post »lukerw
Posted on March 9, 2012 at 2:23pmThis cannot be about Technology — This about a Political Agenda!
Report Post »JimmyP
Posted on March 9, 2012 at 2:36pmThis is how the UAW will enter Europe.
If this works out for GM, expect a can of whoop-donkey to be opened on the hundreds of Euro-Unions garroting such fine-fine companies like the fantastic Purge-Show.
http://www.just-auto.com/comment/brotherly-union-solidarity-tested-by-psagm-proposals_id121124.aspx
Buh-Bye, taxpayer $!
Report Post »mr.goodvibe
Posted on March 10, 2012 at 10:45pmMost of Schwans food trucks run or used to on propane when it was cheaper than gas and in the late 90s propane engines got more efficient with liquid inhection. I wonder what happened. Natural gas could work great for us in the us as we are flush with it but do e have the infrastructure to do it. I quess it would all be cheaper if the gubment would get out of the way and we would dwindle the money supply of the Arabs. Win win.
Report Post »jcizarter
Posted on March 9, 2012 at 2:00pmGM has had partnerships with about 12 car companies in the past, they have all failed.
Report Post »BarackStalin
Posted on March 9, 2012 at 1:50pmAs the corruption becomes ever more blatant…the people yawn.
Report Post »lukerw
Posted on March 9, 2012 at 1:57pmInterestingly… PSA… is tied to Markets in IRAN & CHINA!
Report Post »jcizarter
Posted on March 9, 2012 at 2:01pmI’m still not yawning.
Report Post »Melvin Spittle
Posted on March 9, 2012 at 2:03pmGov Motors wants us to enjoy the cleansing rain until the stench becomes unbearable and we immediately discover that the Gov Motors executive toilets empty directly on us idiots.
Report Post »JBIII
Posted on March 9, 2012 at 1:47pmPerfect example of why the government needs to keep it’s hands out of private business! Other than regulations to make sure companies aren’t killing us, the government needs to stay out. When it gets involved, all it does is screw up the flow of business and creates uncertainty in the market.
All they’ve done is allowed GM to continue to keep making the same mistakes with the same people as before. If they’d had to file bankruptcy a few years ago, all this would of gone away and GM would be well on its way to being a prosperous company again most likely. Way to go Bush/Obama.
Report Post »woodyb
Posted on March 9, 2012 at 1:47pmODUMBO’s philosophy –
Invest taxpayers’ money in JUNK!!!!!!!!!!!!!!!
Perhaps that JUNK can fuel his next green car!!!!!!!!!!!!!!!!!!!!!!!
Report Post »AM-Saves
Posted on March 9, 2012 at 1:45pmIsn’t it great to know that these bums at GM, WHO STILL OWE US, went ahead & spent our “loaned” money to get a French influence on the already androgynous GM car-line.
I had decided not to buy GM ever since the bailout, however the misuse of MY dollars by these parasites seems unending, must be nice to still get money from people who don’t even buy your crap cars…
Report Post »RinkyDink34
Posted on March 9, 2012 at 1:40pmFollow the reason for throwing away of the Peoples money and it will lead you right back to Team Obama and his plan to bankrupt U.S.
Report Post »Mark0331
Posted on March 9, 2012 at 1:47pmIt was Osamas’ plan as well…odd isn’t it?
Report Post »RinkyDink34
Posted on March 9, 2012 at 1:54pm@MARK0331
Report Post »Not Odd At All If You Are A Fellow Moozlum!
Robert-CA
Posted on March 9, 2012 at 1:38pmAs good honest tax paying citizens we payed to save banks in China & Europe & car companies … well so far this is what they want us to know .
Report Post »But don‘t you dare you honest tax paying citizen to be late in paying your taxes to the IRS cause they’ll penalize you & come after you & harass you or don’t you dare & make an overdraft for $1 cause the bank will nail you with a $40 penalty or don’t ever forget & be late with your monthly credit card payment cause they’ll slap you with a juicy fee & ruin your credit score for ever .
So basically crooks in DC can & will get away with anything , but us ?????? he he he … we’ll be nailed & it’s painful .
Gonzo
Posted on March 9, 2012 at 1:36pmI guess Peugeot has to sell Le Volt now.
Report Post »RJJinGadsden
Posted on March 9, 2012 at 1:42pmNo, even Vauxhall, and another Volt builder in Europe have shut down as well. It just does not work regardless who builds it.
Report Post »lukerw
Posted on March 9, 2012 at 1:48pmOr… maybe they detected more “Columbo”s as buyers :)
Report Post »MammalOne
Posted on March 9, 2012 at 3:55pmhaha, that would be the final nail in the coffin
Report Post »dmforman
Posted on March 9, 2012 at 1:28pmDoesn’t this mean that the tax payers of America bailed out Peugot?
Report Post »lukerw
Posted on March 9, 2012 at 1:34pmNo… FRANCE!
Report Post »wolverine
Posted on March 9, 2012 at 1:26pmThis is great they should make a good team the Government Motor Car Inc. and the worst car ever made
Report Post »Snowleopard {gallery of cat folks}
Posted on March 9, 2012 at 1:23pmOnce again we see the ever expanding tentacles of the corruptest administration ever; how much did this farce of a fiasco cost the taxpayers and how much more is still to be uncovered?
Report Post »The_Jerk
Posted on March 9, 2012 at 1:21pmI’d like to ride that pink one, not the gray one!
Report Post »The_Jerk
Posted on March 9, 2012 at 1:20pmThe government should not be in the bailout business. Failures must fail.
Report Post »awiderview
Posted on March 9, 2012 at 1:20pmPSA Peugeot Citroen has excellent diesel technology (they are very highly regarded in Europe). I won’t be surprised if GM comes out with a diesel-electric hybid- already being developed by PSA Peugeot Citroen. It will perform and be incredibly economical at the same time. One could only wish GM had such technology…as opposed to the Volt, a car too expensive and not even innovative.
Report Post »Endstatism
Posted on March 10, 2012 at 11:21pmPeugeot is a good car if the French union workers are in a good mood that day. They used to be sold in America and because all of their model lines were unreliable junk, they were forced to leave the American market.
Report Post »Mark0331
Posted on March 9, 2012 at 1:13pmHey Barry and the UAW, where are our dividend checks? Will the Peugot catch fire as well?
Report Post »lukerw
Posted on March 9, 2012 at 1:26pmThe Belgians like the Peugot… the French like the Citroen… but everyone in Europe likes Mercedes the best! WTF? I guess… Loosers like Loosers… and others like Winners… the Best!
Report Post »randy
Posted on March 9, 2012 at 1:07pmA few words come to mind…. Impeachment, Trial for Treason, Conviction, and Carrying out the Sentence.
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