Survivor GM

My wife and I were watching Survivor when one of the ultimate survivors strode across our television screen. "A lot of Americans didn't agree with giving General Motors a second chance. Quite frankly, I can respect that," said General Motors chairman and CEO Ed Whitacre. "We want to make this a company that all Americans can be proud of again. That's why I'm here to announce we've repaid our government loan in full, with interest, five years ahead of the original schedule."

Suspecting I might not be impressed, my wife asked, "Is that good?"

My brain was screaming inaudibly, "What about the GM bondholders who got hammered? What about the United Auto Workers union who made out better than GM bondholders? What about the American taxpayers who are still holding a truckload of GM stock we didn't want?"

Feigning serenity, I replied to my apolitical spouse, "Well there's more to the story." We turned our attention back to Survivor, the tropical island version.

Whitacre portrayed GM as a scrappy survivor, one of the industry's most competitive car companies. "We're putting people back to work designing, building, and selling the best cars and trucks in the world," he said. However, he didn't tell the whole story. GM would be on the scrap heap of automotive history without the federal government's fully loaded bailout, which is far from being repaid.

True, GM has repaid $6.7 billion in government loans. But the company still hasn't produced the other $52 billion it owes taxpayers. Where's that money? Rather than structuring those funds as a five-year loan, like the other $6.7 billion, the federal government gave GM cash in exchange for stock in the company. And where is that stock? It's not traded on any exchange so the government can't easily sell it and reclaim taxpayer funds. No, some day investment bankers will conduct a stock offering hoping to recover those funds. Will investors want to buy? Who knows? GM has yet to turn a profit since the bailout. And what about the GM bondholders who lost far more than UAW retirees yet received a smaller equity stake? They too are in the lifeboat with taxpayers and the UAW waiting to be rescued by a stock sale.

Is GM a company that all Americans can be proud of? I wish Whitacre would cut another commercial saying, "We've repaid our government loan five years ahead of schedule. We're proud of that but we've got more work to do: We're working hard to repay taxpayers, GM bondholders and the UAW for the help you've given us. We'll celebrate when we finish the job. Until then, we're working hard to earn your business and we ask that you take a look at the fantastic new vehicles the smarter, leaner General Motors is making."

I could respect that.