The more tax money GM asks for the more it seems to need. Starting at home, it had come to the attention of our elected leaders that their $13.4 billion bailout of GM would bump GM’s tax liability by $7-$10 billion dollars. Specifically, the loan terms (new equity structure) would have constituted a “change in ownership,” potentially triggering the massive tax bill under terms set to prevent companies from merging to avoid tax liability. Luckily for GM, the new compromise stimulus bill exempts TARP-receiving firms from these ownership requirements, reports MLive. Good luck digging through the 778-page bill to find the exact wording, though. Meanwhile, we’re still waiting on word from the International Swaps and Derivatives Association as to whether these same equity structure changes and government regulations will trigger GM’s default swaps. And while DC kisses $7-$10 billion in potential GM tax revenue goodbye (which should be reflected in the total bailout cost), GM has already moved on to the next trough.
Automotive News [sub] reports that GM’s South Korean division, GM-Daewoo has requested an unspecified amount of “liquidity” from the Korean government. “Liquidity support in the longer term would help the company’s management, although we do not need that imminently,” says GM-DAT spokesman Hwang Nam-chul. According to AN, local media are reporting that the government had rejected the proposal, saying it did not have a plan to support the country’s No. 3 automaker yet. Did we mention that the Korean automaker Ssangyong recently filed for court receivership? Well, it looks like there’s no special treatment on deck for the General’s Korean unit. “GM must clearly explain plans for GM Daewoo and the unit’s own efforts to deal with the industry downturn in its viability plan due to the U.S. government on Feb. 17, before asking for South Korea’s help,” Yonhap News Agency quoted Korea’s auto sector ministry as saying.
Watch for SAIC (which also part-owns GMDaewoo, alongside GM) to buy up the South Korean company, even though they just lost all rights to the 51% of Ssangyong that they owned – due to bankruptcy.
Unless SAIC are now totally gun-shy of South Korea.
The other GMDaewoo partner, Suzuki, is only a minor partner and recently declared Daewoo produced cars persona-non-grata in their line-up in the US (which is about the only place they sold them anyway).
GMDaewoo may be hung out to dry and have to do a Ssangyong.
If it goes bankrupt and all foreign ownership is “relieved” of their rights as happened with Ssangyong, it is not outside the realm of possibility that the courts would merge Ssangyong into Daewoo.
These two companies were merged at one point, for about 2-3 years until the 1999 asian financial crisis caused an involuntary divorce…
Funnily enough, GMDaewoo has been a real bright spot for GM, and one of the few places they have been able to make money outside of China.
So if GM didn’t get help from the US govt. they wouldn’t have had to pay this tax money anyways, so how is the govt. ‘losing’ 7 – 10 Billion?
I think a mountain is being made out of a molehill.
Why doesn’t GM just start going door-to-door. Hell, take the employees from the jobs bank and tell them to start combing the neighborhoods asking for handouts.
That picture of the buffet is Chinese food, isn’t it?
Where are the egg rolls??
Shit, now I’m hungry.
Why doesn’t GM just start going door-to-door. Hell, take the employees from the jobs bank and tell them to start combing the neighborhoods asking for handouts.
Better yet, stand at off ramps with a sign:
WILL SIT IN JOBS BANK FOR FOOD
John
I was sitting in my basement.
I just rolled myself a taste
Of something green and gold and glorious
To get me through the day.
Then my friend yelled through the transom
“Grab your coat and get your hat son,
There’s a nut down on the corner,
Givin’ dollar bills away”
But I laid around a bit
Then I had another hit.
Then I rolled myself a bomber.
Then I thought about my mama.
Then I fooled around, played around
jacked around a while and then
I got stoned and I missed it.
I got stoned and I missed it.
I got stoned and it rolled right by.
I got stoned and I missed it.
I got stoned and I missed it.
I got stoned… oh me… oh my.