Traveling in a fried-out combie
On a hippie trail, head full of zombie
I met a strange lady, she made me nervous
She took me in and gave me breakfast
And she said,
“Do you come from a land down under?
Where women glow and men plunder?
Can’t you hear, can’t you hear the thunder?
You better run, you better take cover.”
– Men At Work
Labor Party PM Julia Gillard is thundering ahead with more car company bailouts in Oz. Does this from the Sydney Morning Herald sound familiar?
Holden recorded a profit of $89.7 million in 2011 – the exact same amount it said it received in taxpayer funding during the same period.
But Holden’s chief financial officer George Kapitelli said the two figures were a “coincidence”.
“It does stand out when you first see it but it’s a coincidence,” he said. “We’d love to have the [profit] figures higher than the … [government] benefit, but these are audited figures. It’s the way the numbers have fallen.
“These are not numbers that we generally expect. As the CFO these are not numbers I’d like to see. The preference is to have them different to some degree. [But] they are the final results, they are the audited results, we’ve double-checked.”
In 2010, Holden posted a profit of $112 million after receiving $100 million in taxpayer assistance.
But Mr Kapitelli said it was inaccurate to link government funding to profit figures.
Of course not, it couldn’t be the taxpayer money.
Why, that would be General Motors…or as we affectionately know them in the States, Government Motors. Compare the statement above to this:
Thanks to a “sweetheart” tax deal worked out between General Motors and government, the Detroit auto manufacturer won’t have to pay $45.4 billion in taxes on future profits, according to recent reports from the Wall Street Journal and CNN Money.
As it turns out, not only did the feds give the failing company billions of taxpayers dollars, all while firing executives and replacing them with government-backed officials, but they also gave what some call “preferential treatment” in the form of tax breaks, according to documents filed with federal regulators.
“The tax benefit stems from so-called tax-loss carry-forwards and other provisions, which allow companies to use losses in prior years and costs related to pensions and other expenses to shield profits from U.S. taxes for up to 20 years,” Randall Smith and Sharon Terlep write in the WSJ.
“In GM’s case, the losses stem from years prior to when GM entered bankruptcy,” the report adds.
Normally, when a goes through major restructuring (especially at the executive level), restrictions are put on certain tax benefits, according to tax analysts.
Wow. GM isn’t paying their “fair share”, now are they? So, GM got a bailout and, more importantly, a long term tax benefit from the US government for trashing the company in the prior years, something that is not a typical feature of a Chapter 11 filing. I’m surprised that OWS supporter and Motor City Walrus, Michael Moore, isn’t doing a new expose on this incestuous relationship between the unions, a private company and their cronies in government. I’m sure that it is next on his agenda…
But for unfortunately for Australia, it doesn’t stop there. Prime Minister Julia Gillard, an ideological clone of Barack Obama, is throwing even more taxpayer money at Holden/GM:
Holden has made a commitment to keep making cars in Australia for at least another 10 years in return for $275 million in taxpayer subsidies, but has promised nothing about jobs.
General Motors Co. will invest more than $1 billion in its Australian subsidy Holden Ltd. for manufacturing and next-generation development with the support of a hotly debated $285 million subsidy from the Australian government.
If GM is exempt from $45 billion in taxes, think maybe that is where the investment money is coming from? Why isn’t the American press bemoaning this “cost” to the government as they do the personal tax cuts for individuals (the Bush tax cuts) instead of demagoguing companies like Exxon and others for being, well, profitable companies?
The eeeeevil oil company, Exxon, paid $31 billion in taxes – last year alone. Last three years – $67.7 billion in taxes while employing (sending a paycheck to) over 82,000 people.
What happens if this is throwing good money after bad and GM can’t meet its future commitments to these respective governments? Will we see a wave of nationalizations of this segment of industry? Will the excuse be that it must be done to protect taxpayers?
This whole thing feels like a global “progressive” loan sharking operation to me.