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| SKOKIE, IL - OCTOBER 10: The Chrysler logo is seen at Walton Chrysler October 10, 2005 in Skokie, Illinois. Chrysler is recalling about 500,000 vehicles due to potential problems when shifting the automatic transmission into 'park.' (Photo by Tim Boyle/Getty Images) |
The Auditor General of Canada recently issued a report that makes at least one thing clear: it doesn't know how effective Canadian government loans given to both General Motors and Chrysler in 2009 were in ensuring the viability of both companies. That year, our Canadian government (and the province of Ontario) dished out $10.8 billion to GM and $2.9 billion to Chrysler, but hadn't yet sorted out precisely how the funds were to be used before disbursing them.
This happened in spite of the fact that, according to a piece in Bloomberg, the loans weren't meant to be handed out until authorities were clear on the manufacturers' plans for reorganization. In fact, federal officials hadn't finished establishing the concessions made by all the involved parties, the pension liabilities, nor the long-term soundness of the automakers' financial positions. On top of that, apparently it didn't keep close tabs on the money after loaning it: the report says that $1B should have been applied to GM Canada pension plans but was instead given to GM to use.
Chrysler repaid $1.7 billion, while GM handed back $3.8 billion and Bloomberg believes the feds in Ottawa still own 110 million shares of General Motors, which, at the stock price as of writing, would be good for another $3.9 billion. Those were mad, bad days, though, and we're not sure what point the Bloomberg report serves, other than to say, "Oh, by the way...."
The auditor general's office also went on to recommended that those entities involved in the bailout, along with other relevant players, should publish a report with clear information on the financial help provided to Chrysler and General Motors, such as total cash disbursed and how it was used.
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