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As for the GM bailout as a whole, after an initial burst of optimism, it is not looking so good. GM could have gone through normal bankruptcy and restructured without the payoff to the unions and other wasted taxpayer money to the tune of about $70 billion. As it is, GM’s stock is trading about 40% below its IPO price of $33, where the stock opened on November 17, 2010. Quarterly earnings growth year-to-year is also down nearly 40%. By comparison, Toyota’s quarterly earnings growth jumped by 25%.
GM is losing market share. According to Forbes: “For the first 7 months of 2012, their market share was 18.0%, down from 20.0% for the same period in 2011. With a loss of market share comes a loss of relative cost-competitiveness. There is only so much market share that GM can lose before it would no longer have the resources to attempt to recover.”
With all of the infusion of taxpayers’ money, the Obama GM bailout – which missed the Janesville plant altogether – is pumping air into a flat tire that still has some holes. According to one analysis of GM’s precarious financial state:
The company’s financial situation has not improved since the end of 2011 and it remains well in the danger zone for facing future bankruptcy, as the company’s post-bailout reorganization appears to have been inadequate to really restore the company to good health.
The Obama campaign owes Paul Ryan an apology for wrongly accusing him of doing what the Obama campaign itself regularly does – lie to the American people. Obama reneged on his campaign promise to “lead an effort to retool plants like the GM facility in Janesville” and he has squandered billions of dollars on a government “bailout” of GM that he falsely represents as a success.
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