GM to invest $1 billion Brazil plants.

[Strk]

Originally posted by: SMOGZINN

Originally posted by: Strk
I still don't get it. I guess I'll just repeat myself. GM is a global company that received loans (I.e. money we'll actually get back with interest). If they return to profitability, jobs are saved and the loans will get repaid.

Would people prefer they invest $1 billion of loan money into their Lordstown, Ohio (it's less, around $350 million, but for the sake of argument, let's say they'd get it all), while taking the money they were going to spend there anyway and send it to Brazil?

As much as people want to give GM crap, they're just being honest. One of the arguments about all the money for green initiatives is that companies will just cut their funding and send it somewhere else, all while taking the government money. I guess some people prefer it to look ok on the surface, even if it's ultimately doing the same thing.

Because we didn't give them money so they could grow their business in Brazil. We gave them money in an attempt to help us out of this recession. I guess you are thinking that building a plant in Brazil will lead to GM making more money which will help them keep jobs here in the US which will help us out of the recession. While that might be the outcome, it was not the reason for the loan.
I can?t go to a bank and get a mortgage for a house and then use the money to buy a sports car and make it all right by telling the bank that being able to drive faster will help me pay back your loan! The bank will get rather pissed at me because I undercut their ability to asses the risk of the loan. We gave them that money so they would keep jobs here in America, they used it to create jobs in Brazil.

GM didn't get the loan to help us out of the recession. They got the loan so they could continue to exist.

But again, what's the difference in just spending the $1 billion directly there, rather than spending it here, then cutting non-loan money here and sending it to Brazil? I guess I just don't see the difference in using accounting tricks to make things look pretty. That's basically what's happening/going to happen with the original $25 billion (the initial bit wasn't for a specific company, just green initiatives).