On July 23 Chief Financial Officer of General Motors Chris Liddell announced plans for GM to buy for $3.5 billion a company called AmeriCredit. AmeriCredit is a sub-prime financial firm that lends money to vehicle buyers that have poor credit. Those buyers will then buy GM cars and trucks. GM is prepared to pay the shareholders of AmeriCredit a premium to capture a firm that will compete with GM`s other lender, formerly known as GMAC, now known as Ally. Ally owes the US people $16 billion for the bailout provided to keep GMAC from going under. GM owes the US people $47 billion for the bailout to keep GM from going under.
Self-importance that has hypertrophied into public arrogance has become commonplace. A high-ranking general, now retired, thumbed his nose at the chain-of-command recently. The trivial arrogance of Lane Kiffin the now-departed Tennessee football coach made headlines for a year. Ponzi-scheme convict Bernie Madoff strutted all the way to federal prison. Who can forget BP CEO Tony Hayward stonewalling questions about BP`s Gulf oil disaster, just before going yachting for the weekend?
But, when the CFO of GM casually says his financially mismanaged corporation wants to use taxpayers` money to buy a sub-prime lender so that GM can sell vehicles to people with poor credit ratings it takes a lot of, not nerve, but flaming arrogance.
May we suggest that GM could reduce the $47 billion owed to the US people by sending $3.5 billion to the US Treasury? Why pay a premium for AmeriCredit while GM owes so much for its bailout? If AmeriCredit is a bargain we wonder why? We all should wonder, because we will soon own 61 percent of AmeriCredit. | 