A friend of mine asked, “Have you seen the commercials about GM’s “record year” and heard Obama bragging about what a great success the bailout was? Uh, not so much.” It was this article in Forbes to which he was referring.
Forbes contributor Louis Woodhill notes:
Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break evenon the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.
Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.
It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.
Following the utter collapse of Chevy’s attempt at an electric entry, the Volt, the automaker’s next best bet was on a successful D-Class entry, the revamped Malibu. It’s not looking good.
At this point, it appears that the 2013 Malibu is not only inferior to the 2012 Volkswagen Passat, it’s not even as good as the car it replaces, the 2012 Chevy Malibu.
In their March 2012 issue, Car and Driver published another D-Segment comparison test, pitting the 2013 Chevy Malibu Eco against five competing vehicles. This time, the Malibu came in dead last.
Not only was the 2013 Malibu (183 points) crushed by the winning 2012 Volkswagen Passat (211 points), it was soundly beaten by the 2012 Honda Accord (198 points), a 5-model-year-old design due for replacement this fall. Worst of all, the 2013 Malibu scored (and placed) lower than the 2008 Malibu would have in the same test.
For an alternative view of the bailout see this New York Times article comparing GM and Chrysler–both bailout beneficiaries–with Lehman Brothers, which was not so blessed.
What do you think? Was the bailout of GM and Chrysler good, or not?