Lends it to private equity firms? My tax money, given to GM so they can lend it to someone else?
According to the Wall St Journal, GM is going to lend $2.5 billion dollars to Platinum Equity so it can buy bankrupt parts supplier Delphi. Platinum Equity only puts up $750 million of its own money, with us taxpayers, thru GM, supplying the rest???
Delphi is an important supplier to GM, and probably needs to stay afloat in order for GM to keep making cars.
But why offer a slice to this Platinum Equity run by Tom Gores? Why does Platinum have to come to GM for money as opposed to borrowing for a bank? Could Delphi be such a disaster that no bank will touch it with a ten foot pole? In which case, our tax money should not be poured down a drain.
If there is any chance of Delphi becoming profitable why does not GM buy the place outright. Why let this Platinum Equity profit at all. Buy it outright and keep any future profits.
Delphi is a UAW company, and used to be owned by GM. GM spun the thing off years ago, thinking to unload union health care and retirement liabilities. The newly independant Delphi never managed to get it's labor costs down enough to stay in business. It's been in bankruptcy for the last four years, hobbling along on loans from GM. Now that GM is flush with taxpayer bailout money it's doing something to keep Delphi going. But why cut this Platinum Equity into the deal? Platinum isn't bringing any money to the table.
How much money did Platinum or it's owner Tom Gores contribute to the Obama campaign?