Screencap from GM ad featuring Ed WhitacreEnlarge Photo
Yesterday, General Motors finished paying back nearly $7 billion in loans from the U.S. government -- with interest, ahead of schedule. On the off chance you didn't hear about that, CEO Ed Whitacre is here to fill you in.
Whitacre and his folksy, Texas drawl star in a new, 60-second spot that launched yesterday at noon. By sheer coincidence, that was just about the time that GM wired the final $4.7 billion of loan principal to the U.S. Treasury Department, along with a tidy interest payment. In all, General Motors repaid $6.7 billion in principal to the U.S., and another $1.4 billion to Canada. Figures on the interest vary, but it appears GM coughed up around $615 million to the U.S. and an unspecified amount to Canada.
In the commercial, Whitacre marches through a GM plant, talking about repaying the government five years ahead of schedule and about GM's efforts to get back in the business of building "the best cars and trucks in the world". Of course, he conveniently overlooks the fact that GM actually received far more money from the U.S. and Canada than it's paying back. Of the roughly $50 billion GM received from the U.S., $43 billion was converted to equity, giving the feds a 61% stake in the company. A write-off of $C8 billion from Canada and Ontario gave those governments a 12% stake. Of course, technically those sums are no longer considered straight debt, and if GM keeps turning profits, the cash may eventually come back to the U.S. and Canada when they unload their positions down the line. Still, there's something a little disingenuous about Whitacre's spiel: he may be following the letter of the agreement, but he's not being especially forthright about its spirit.
But whatever. Far more interesting than all that is the tiny print that pops up around the ad's three-second mark, saying "Some future models shown". While we grab a
third fourth cup of coffee, have a look and see if you can spot the ones they're talking about.