General Motors' 2010 earnings report came out today, and the good news is that the automaker in which we still hold a 26-percent stake made a $4.7 billion profit in 2010, its first profitable year since 2004. The slightly less good news is that GM's least profitable quarter of 2010 was the 4th quarter during which it made only $510 million, grimly hinting as so many other economic indicators have that the recession is still going. Also notable is the fact that the Opel division was a drag in that quarter, losing $568 million.
Another point that you really can't ignore is the fact that GM is getting a pretty nice tax deal from the U.S. Treasury. This isn't a new revelation per se, as the Wall Street Journal predicted back in November that GM stood to save over $45 billion in taxes over the next decade. The tax break, which shields companies from being taxed on future earnings based on past losses (2005-2009, in GM's case), is supposed to expire when companies shed debt upon entering bankruptcy.
So the $4.7 billion GM just made looks to be tax exempt, and a report on CNN Money yesterday pegs the value of the automaker's special understanding with the IRS at $14 billion.
So, tax breaks on automakers' earnings... good, bad, otherwise?
acbayard says:
04:09 AM, 02/25/11
One of those rare circumstances where you can have your cake and eat it too.
GM was able to keep the accumulated $20 billion in tax-loss carry forwards, so it would have no corporate tax liability for nearly half a decade. While discharging debt. Nice to have friends in high places.
jeepsrt says:
07:12 AM, 02/25/11
Kind of a joke that Chrysler is paying huge amounts of interest and GM just gets all the breaks.
bodyblue says:
07:43 AM, 02/25/11
RAPE......how does it feel US Taxpayer? Need some lube or do you like it dry? The revolting degenerates that think this is a good thing will pop on here and TRY to defend this mess as a "good thing"...I cant wait.
The Market spoke in 2008.....it said that we did not need GM.....when you try to manipulate the Market it never works....look at the idiots in the Bamster regime now with the Real Estate market.....they keep trying to prop it up when they need to let it bottom out in order to recover. 2012 cant come fast enough to get these amateurs and college professors out of office and get some people with experience in the real world.
greenpony says:
08:02 AM, 02/25/11
What bothers me is the fickle nature of the American populace. "GM is bankrupt and too big to fail, let's pump our tax dollars into it!" Then "GM is earning too much profit, let's take that away from them!" Socialists. Whatever happened to "GM made some bad decisions that inflated their debt obligations, let's do nothing and let them face the consequences"?
bodyblue says:
08:13 AM, 02/25/11
"Whatever happened to "GM made some bad decisions that inflated their debt obligations, let's do nothing and let them face the consequences"?"
BINGO! But what happened is that the Bamster regime is too gutless to let the market do its job.....they know NOTHING about business since they have NOBODY in the admin that has actually met a payroll or run a business. All they have are the progressive "community organizers" who are looking for "social justice". Porkulus did not work.....and now it is really too late to prevent a double dip recession with oil going to a zillion dollars a barrel. And with the Regime in contempt of court for not issuing oil drilling permits not even IL will be able to afford fuel for their fleet in the next few months. Obama admin is filled with amateurs and bumblers and now it is coming home to roost. Like it yet?
1487 says:
08:33 AM, 02/25/11
Pres Bush is known as "Bamster"? In what world? The initial $13B came from Bush and he said in his book that he was not going to let GM/Chrysler implode on his watch. See how facts always thwart stupidity?
Carry on kids.......
1487 says:
08:38 AM, 02/25/11
I take it no one at IL read the article- same for the Peanut Gallery above.
The WSJ article said that all TARP recipients got the same benefit- which makes this IL post misleading since it infers that the government gave GM a specific tax break. The rationale behind this is explained in the article. In addition is says in normal bankruptcy proceedings a company gets SOME restrictions on its tax benefits from prior losses- they don't lose all of their benefits.
Jeep:
read the article, Chrysler will have the same benefit and GM and Chrysler had interest on their loan debt. Not sure why everyone is believing anything to the contrary.
albook says:
08:55 AM, 02/25/11
Well as long as they pump the money back into making competitive future products.
jeepsrt says:
09:40 AM, 02/25/11
"Pres Bush is known as "Bamster"? In what world? The initial $13B came from Bush and he said in his book that he was not going to let GM/Chrysler implode on his watch. See how facts always thwart stupidity?
Carry on kids......."
Only reason that Bush gave the intial $13b was that Obama was going to do it when in office anyway.
greenpony says:
09:48 AM, 02/25/11
"Only reason that Bush gave the intial $13b was that Obama was going to do it when in office anyway."
Does that make sense?
jeepsrt says:
10:28 AM, 02/25/11
"Does that make sense?"
Yes, GM and Chysler needed the bailout and Bush didn't want them to fail in the 2 months leading up to Obama giving them the money anyway.
coolb944 says:
11:23 AM, 02/25/11
I really love the poster above calling the President's Admin a regime. If you want to live in a country with a regime, go live in Saudi Arabia or Iran. It's really repugnant that you let your political beliefs enrage you so much that you make absurd comments like that.
When 2012 comes, the people of America can by free will vote the admin out of office if they so desire. That, sir, is NOT a regime!
1487 says:
11:27 AM, 02/25/11
"Only reason that Bush gave the intial $13b was that Obama was going to do it when in office anyway. "
LOL! Good one. So you know more than Bush? He said in his book that in spite of what was being said in public he had decided to bail them out in October or November. Critics actually said Bush and Co gave them money with virtually no strings attached while the ATF set up by Obama forced tough concessions and downsizing to get more aid. Spin it any way you want- the first installment came from Bush, not Obama.
exnevadan says:
11:31 AM, 02/25/11
GM justs needs a Wall Street address at this point - they've already got all the investment banking practices down pat.
greenpony says:
11:50 AM, 02/25/11
"I really love the poster above calling the President's Admin a regime. If you want to live in a country with a regime, go live in Saudi Arabia or Iran. It's really repugnant that you let your political beliefs enrage you so much that you make absurd comments like that."
Why don't you look up "regime" in a dictionary?
bodyblue says:
11:53 AM, 02/25/11
""Pres Bush is known as "Bamster"? In what world?"
Nice spin BUT even though Bush was WRONG about the bailout it was The Bamster Regime that let the Union thugs get their disgusting hands on GM....why dont you ever mention that your degenerate UAW shill? WHY? Is it because you are in a Union at the car wash?
bodyblue says:
12:02 PM, 02/25/11
"Why don't you look up "regime" in a dictionary?"
No Kidding! Obama is making huge inroads on our liberty as we speak......the fools in the center that voted for him are running from him like crazy.......the last election is a great example.
The practice of letting Unions in our government workforce is terrifying that is being shown by the crap happening in the Mid West. If the Unions are de certified then the Democraps lose a ton of money given to them by the Unions stealing it from the workers. Do you really want your government run by the Union thugs? Really?
coolb944 says:
01:23 PM, 02/25/11
bodyblue and greenpony:
You guys are missing the point of what I was saying. So "regime" can be used to stand for "a government in power" or "a form of government." Great. But let's not pretend we all live in a vacuum, and that words don't have connotations associated with them. Regime is most often used when referring to governments that in general do not follow the democratic process as it is supposed to be followed, for example the former governments of Tunisia or Egypt, where their "Presidents" were in power for far longer than they should have been according to public votes, and where the vote of the people often meant nothing.
Regime as a word alone makes sense, but with connotations attached, I disagree with the use of the word for an American administration, no matter what party it's affiliated with. So, if you want to use that word strictly on the dictionary meaning, sounds good to me, but make sure you use it whether the President is a Democrat or Republican or whatever party they're from, otherwise, it might be misconstrued as being used with its negative connotations attached to it.
I find eloquent, well-informed arguments far more compelling than those laced with biased words like "democraps" or "republican'ts." Not to say anyone is ill informed. I really don't know how much someone does or doesn't know. But it would be great to read a comment that explained the view eloquently and without vitriol.
greenpony says:
02:19 PM, 02/25/11
Maybe "regime" does imply undemocratic ("progressive" and "conservative" can have negative connotations too, but I see no reason to remove those words from my vernacular on the off chance someone might get offended); but then, the US isn't really a democracy, is it. Republican or Democrat, it doesn't matter. The fact is that the federal government keeps getting more powerful and more bloated. There are precious few pushes to give people more freedom, and far too many pushes to limit freedom. Does that qualify each bi-annual group of US government leaders as a regime in the negative sense? To me, it does. Besides... how else would you refer to them?
coolb944 says:
03:00 PM, 02/25/11
greenpony:
I won't comment on your opinions of the American version of democracy or thoughts on politicians. Those are your beliefs, and I can respect how you feel. I personally don't find "progressive" or "conservative" as offensive, and "regime" on its own is not to me either. But when combining "regime" with "Democraps," I certainly can see what the inference is, and it's not the objective meaning of the word. And while we can call our government many things, to infer that it's anything like truly oppressive regimes in other parts of the world is wrong, in my opinion. Our vote still counts for something in this country as far as I'm concerned, and I still believe on the whole all 3 branches do the will of the people most of the time. I can't say people's abuse of power never comes into play in this country, but I wouldn't compare our government even remotely to that of, say, Mubarak. Call me naive, but that's what I think.
cwc1 says:
11:00 AM, 02/26/11
I think there is a lot of justification to refer to the Obama administration as a regime. Such as ignoring a federal judges ruling on the unconstitutionality of Obama(death)care and continuing to implement it, being in contempt of another federal judge regarding the moratorium on drilling in the Gulf, and deciding that they're not going to enforce the Defense of Marriage Act, among others. He has demonstrated contempt for the separation of powers between the three branches.
1487 says:
05:43 AM, 02/27/11
"Nice spin BUT even though Bush was WRONG about the bailout it was The Bamster Regime that let the Union thugs get their disgusting hands on GM....why dont you ever mention that your degenerate UAW shill? WHY? Is it because you are in a Union at the car wash?"
I thought you said Obama initiated the bailout. Now you have changed your story to saying Bush was wrong for starting it. And why do you use "degenerate" in every post now? Learned a new word I see- don't wear it out.
cwc1:
A regime isn't elected, just a small factoid.
"No Kidding! Obama is making huge inroads on our liberty as we speak......the fools in the center that voted for him are running from him like crazy.......the last election is a great example."
His poll numbers are up since late last year.........
What planet do you live on?
greenpony says:
11:37 AM, 02/27/11
It must have been a Freudian slip if I referred to Democrats as Democraps, because my typical term is Dumb-ocrats. The ones I have for Republicans are just as sophomoric. *shrug*
Politics aside, I refer to every American leadership team as a regime, with each election every two years. So the President may have an "administration". The legislature may have a "congress". But taken together there is a new "regime" every two years. I've honestly never come across someone who took offense to that before.