GM Could Be in Hot Water With FTC Over Truth in Advertising

jpd80 · 24-04-2010, 03:29 PM

Quote:

LINK
General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn't standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.

The TV spot may land GM in hot water with the Federal Trade Commission over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."

"We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.

But a top Senate Republican has accused GM of misleading taxpayers about the loan repayment, saying the struggling auto giant was able to repay a $6.7 billion bailout loan only by using other bailout funds in a special escrow account.

Iowa Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout — also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.

"It appears to be nothing more than an elaborate TARP money shuffle," Grassley, the ranking Republican on the Senate Finance Committee, said in a letter Thursday to Treasury Secretary Timothy Geithner.

Ah so it looks like GM has paid out some of it's loans early to the US and Canadian governments
but they did it by dipping into Escrow Fund money given to GM by the government....

I knew GM couldn't be that smart to start earning a profit just like that..

**TUF_302** · 24-04-2010, 04:20 PM

GM sometimes act like they want to go down the gurgurler!, why not try building decent cars and making money that way!?

:

phillyc · 24-04-2010, 04:37 PM

Quote:

Originally Posted by jpd80

Ah so it looks like GM has paid out some of it's loans early to the US and Canadian governments
but they did it by dipping into Escrow Fund money given to GM by the government....

I knew GM couldn't be that smart to start earning a profit just like that..

Unbelievable, except that we are talking about GM here. Go bankrupt, write off the best part of $100B worth of debts (forcing others into bankruptcy), get a bailout of $60B from the US government, keep some of that money as working capital to be repaid, then get another wad of US government money in a trust account. Then use the trust account money to pay back the working capital. Then say, aren't we great... GM = Liars.

Joe5619 · 24-04-2010, 05:08 PM

Quote:

Originally Posted by phillyc

Unbelievable, except that we are talking about GM here. Go bankrupt, write off the best part of $100B worth of debts (forcing others into bankruptcy), get a bailout of $60B from the US government, keep some of that money as working capital to be repaid, then get another wad of US government money in a trust account. Then use the trust account money to pay back the working capital. Then say, aren't we great... GM = Liars.

Pretty good summary up!!

It is amazing anyone at GM actually thought this was a good idea.. Goes to show they are still run by nobs!!

Falc'man · 24-04-2010, 04:45 PM

As noted in the other thread, this is serious stuff, but as you put it, Phil, there's something about GM that makes this not so much of a surprise.

Jason[98.EL] · 24-04-2010, 04:49 PM

what do you guys think the US government will do

me i think that they should charge the ceo with fraude or would that be going to far

Jason

The G6ET Spot · 24-04-2010, 06:44 PM

Quote:

Originally Posted by Jason[98.EL]

what do you guys think the US government will do

Jason

The US government will do exactly the same thing our government would do to Holden if it were them.

And that is SFA as they will use the line that the compoany means so much to teh country pfft

Deco28 · 24-04-2010, 06:47 PM

I'd just like to point out that GM has done nothing wrong.

It's like taking a 100k loan from the bank, 1 month later deciding I don't need that 100k anymore and paying it back with interest...

jpd80 · 24-04-2010, 07:19 PM

Quote:

Originally Posted by Deco28

I'd just like to point out that GM has done nothing wrong.

It's like taking a 100k loan from the bank, 1 month later deciding I don't need that 100k anymore and paying it back with interest...

Except they did it with money given to them in an Escrow Fund set up by the government.
Legally, they may not have transgressed but they are definitely misleading the public.

The US government will do nothing because they want the public to be confident in GM and buy shares
at the IPO later this year. I hope for the US taxpayers' sakes the Government gets as much as possible back.

Nikked · 24-04-2010, 05:34 PM

Does GM even know what they are doing. there have been so many press releases saying what they're going to do (new cars, exports etc), but nothing happens...

SVD · 24-04-2010, 05:38 PM

Sounds pretty much like Holden...do you think Holden sent their PR/Advertising mob over to GM in the states?

bobthebilda · 24-04-2010, 08:01 PM

Quote:

Originally Posted by SVD

Sounds pretty much like Holden...do you think Holden sent their PR/Advertising mob over to GM in the states?

Your probably not too far from the truth there SVD. When Reuss left australia to take up his post of Head of North America, He took Jason Laird (Head of Holden corporate affairs) with him.

Obama is going to do everything he can to keep GM alive, and if it means selling a dud company back to American investors, at least he can say he saved them.

GrimmReaper09 · 24-04-2010, 05:58 PM

Why am I not surprised by this. In my personal experience......anything to do with GM or Holden is just a croc of ******** and not worth the paper the receipt is printed on.

Just my personal opinion.

Wally · 24-04-2010, 06:08 PM

I suspect the outcry is more Republican V Democrat than based purely on fact:

http://www.newsoxy.com/gm/repays-loans-12939.html

http://www.foxnews.com/opinion/2010/...payer-bailout/

mik · 24-04-2010, 07:52 PM

i feel sorry for those people that got the shaft from GM, the company might get back on its feet(one way or another), but those people will never see their dough.

Brazen · 24-04-2010, 07:57 PM

Mountain out of a molehill,

Use general revenue which includes TARP payments to pay back $6.7 Billion to the US govt.

In the end $6.7 Billion has been paid back.

jpd80 · 24-04-2010, 08:02 PM

Quote:

Originally Posted by Brazen

Mountain out of a molehill,

Use general revenue which includes TARP payments to pay back $6.7 Billion to the US govt.

In the end $6.7 Billion has been paid back.

That money came from an escrow fund set up by the government.

For GM to proclaim that they are paying back debt years ahead of time
and use taxpayers money to do it is a bit rich.

Wally · 24-04-2010, 08:30 PM

Quote:

Originally Posted by U.S. Senator Chuck Grassley of Iowa is the ranking member of the Senate Finance Committee and a senior member of the Judiciary and Budget Committees

However, to understand the disclosure you have to be a sophisticated investor with time to pore over the fine print buried in massive SEC filings and government reports prepared by independent watchdogs with teams of auditors

Well obviously he doesn't know about Ford Forums ability to cut through all the techincal stuff and tell it as it is.

**ebxr8240** · 24-04-2010, 11:12 PM

Quote:

Originally Posted by Wally

Well obviously he doesn't know about Ford Forums ability to cut through all the technical stuff and tell it as it is.

VERY good... Lol...
So if I get a loan to to pay my Visa off .. I have paid back my loan... Aha yea.. Keep it up G.M you'll go broke again...
Though it's all smoke and mirrors... Tell em what they want to hear..
The more things change .. The more they stay the same...

Brazen · 24-04-2010, 11:17 PM

Quote:

Originally Posted by ebxr8240

VERY good... Lol...
So if I get a loan to to pay my Visa off .. I have paid back my loan... Aha yea.. Keep it up G.M you'll go broke again...
Though it's all smoke and mirrors... Tell em what they want to hear..
The more things change .. The more they stay the same...

TARP funds were not to be payed back, so its more like using your tax return to pay off the loan.

FPV GTHO · 24-04-2010, 11:37 PM

GM will get a slap on the wrist and told to withdraw the adds. I'd be surprised if the government pushes for anything more considering its in their best interests to see GM continue to recover and generate interest for a future share sale.

phillyc · 24-04-2010, 11:50 PM

http://www.leftlanenews.com/top-repu...ack-loans.html

Quote:

Originally Posted by left lane news

Top Republican questions GM/administration over TARP funds used to pay back loans
04/22/2010, 10:56 PMBy Mark Kleis
A top Senate Republican, Charles Grassley, questioned the Obama Administration regarding the recent announcement by General Motors that all federal loans had been repaid. Grassley believes that the loans were in fact paid back with other federal bailout funds – not from profits due to the operation of the automaker.

GM announced on Wednesday that it had fully repaid the $6.7 billion in loans from the U.S. government, and $1.4 billion in loans to the Canadian government. Today, according to Fox News, a Republican Senator has questioned the legitimacy behind that announcement.

Senator Charles Grassley accused both the Obama Administration and GM of misleading taxpayers about the true status of the automaker’s government-sourced loans. Grassley accused the automaker of using funds from a different part of the government funded bailout in order to pay back its loans.

Grassley’s charge was verified by the inspector general behind the bailout, who oversees the Trouble Asset Relief Program (TARP) funding. Special inspector general of the TARP program, Neil Barofsky, told the Senate Finance Committee and Fox News that GM used bailout money out of an escrow account in order to pay back other government loans. Grassley mentioned in his letter to treasury secretary Timothy Geithner that a form filed with the Securities and Exchange Commission (SEC) showed $6.7 billion worth of taxpayer funds were sitting in an escrow account available to GM.

Grassley questioned Geithner, asking for public clarification about why GM was allowed to use taxpayer funds from the escrow account in order to pay back a taxpayer-funded loan. “It appears to be nothing more than an elaborate TARP money shuffle,” said Grassley in his letter.

Following GM’s triumphant announcement on Wednesday, Vice President Joe Biden said the repayment was a “huge accomplishment.”

“The bottom line seems to be that the TARP loans were ‘repaid’ with other TARP funds in a Treasury escrow account. The TARP loans were not repaid from money GM is earning selling cars, as GM and the administration have claimed in their speeches, press releases and television commercials,” wrote Grassley.

Falc'man · 25-04-2010, 07:39 PM

Quote:

Originally Posted by phillyc

http://www.leftlanenews.com/top-repu...ack-loans.html

You see, it's way more complex than that. If you don't have a degree in banking (like wally the banker does) there's no way you can understand what or how GM did this, okay? Even the guy you quote seems to know nothing, because it's complex, and he's only the "Special inspector general of the TARP program". It's like, you know, just... look... I mean... it's okay... believe me!

Wally · 26-04-2010, 08:45 AM

Do have a secret crush on me or something? Sniping members, anyone for that matter is so...well .... you know ... school girly.

Falc'man · 26-04-2010, 09:06 AM

Quote:

Originally Posted by Wally

Do have a secret crush on me or something? Sniping members, anyone for that matter is so...well .... you know ... school girly.

How about you stop taking digs at this forum and it's members, or maybe just... you know... stop defending the indefensible, it's foolish.

Nikked · 25-04-2010, 11:12 AM

So in plain english, GM is paying back a lone with a lone?

Falc'man · 26-04-2010, 09:39 AM

All I read was sarcasm. So you got some back.
Anyhow, you need to take it easy and disconnect for a while. An internet discussion is not supposed to upset you.

Ohio XB · 27-04-2010, 08:37 AM

GM lost $4.3 billion in the second half of 2009 alone. With losses like this how would they possibly be able to pay back billions in loans when they are not even making money to continue operations on? It was a shuffle and it has been known here since it happened. I guess the press is just catching up? Math is so hard to do I guess.

Steve

burnz · 27-04-2010, 08:53 AM

fox news..we report you decide, "mission accomplished" mr presedent.
oh wait the other sides in power.

gm in the middle of u.s. polotics