Will GM Spend Taxpayer Bailout Money on Overseas Operations?

Wilkinson said Treasury "realizes that the best way for taxpayers to maximize their return is for GM to be a strong, healthy company."

Others say that while it may be legal, that doesn't make it right.

"I don't believe that it is consistent with the original objective so I would say it's not wise or helpful that our taxpayer dollars are being used to support the global efforts of these companies," said Thomas Hopkins, professor of economics at the Rochester Institute of Technology.

Said Rep. Weiner, GM "might legally have the right to do this, but politically and from an optics perspective I can't imagine a more boneheaded move."

When President Obama announced his plan to send GM into bankruptcy, he pledged an initial $30 billion of taxpayer aid to help the automaker emerge from the process successfully, casting the investment as a way to save American jobs.

"GM is an American company with tens of thousands of employees in this country, and responsibility for its future ultimately rests with us," the President said June 1 at the White House. "That's why our government will be making a significant additional investment of about $30 billion in GM – an investment that will entitle American taxpayers to ownership of about 60 percent of the new GM."

It is precisely that 60 percent ownership stake that could make American taxpayers open to GM doing whatever it takes to be successful and eventually repay its bailout funds, even if that means expanding abroad.

"GM is trying to make a profit," said Dan Ikenson of the Cato Institute. "They know best how to do that. We should not infringe on their decision-making."

However, a government watchdog group recently warned that it was "unlikely" that American taxpayers would receive a full return on their investment in GM.

"Treasury is unlikely to recover the entirety of its investment in Chrysler or GM, given that the companies' values would have to grow substantially above what they have been in the past," the Government Accountability Office said in a Nov. 2 report.

Speaking in Washington last month about GM's future prospects, Steve Rattner, the former head of the Obama administration's auto task force, said, "Like any patient that undergoes major surgery, a successful recovery is far from assured."

On Monday morning GM will release its third-quarter earnings report. Sources familiar with the announcement told ABC News that the automaker will state that it aims to repay taxpayers $1 billion per quarter, starting in December.

ABC News' Dan Arnall and Jessica Hoffman contributed to this report.

-- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248. -- This embed didnt make it to copy for story id = 9091248.
Page
  • 1
  • |
  • 2
Join the Discussion
You are using an outdated version of Internet Explorer. Please click here to upgrade your browser in order to comment.
blog comments powered by Disqus
 
You Might Also Like...