Fox News:
General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn't standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.
The TV spot may land GM in hot water with the Federal Trade Commission over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."
"We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.
But a top Senate Republican has accused GM of misleading taxpayers about the loan repayment, saying the struggling auto giant was able to repay a $6.7 billion bailout loan only by using other bailout funds in a special escrow account.
Iowa Sen. Chuck Grassley's charge was backed up by the inspector general for the bailout — also known as the Trouble Asset Relief Program, or TARP. Watchdog Neil Barofsky told Fox News, as well as the Senate Finance Committee, that General Motors used bailout money to pay back the federal government.
"It appears to be nothing more than an elaborate TARP money shuffle," Grassley, the ranking Republican on the Senate Finance Committee, said in a letter Thursday to Treasury Secretary Timothy Geithner.
The FTC said it could not provide any comment on the ad or whether it had received any complaints or inquiries about GM's claims from the public or from government officials.
The FTC has a division of advertising practices that investigates possible false claims, but specific investigations are not made public. If the FTC determines that truth-in-advertising laws have been violated, the agency files complaints against the organizations in violation.
GM announced Wednesday that it had paid back the $8.1 billion in loans it received from the U.S. and Canadian governments in 2009. Of that, $6.7 billion went to the U.S. Treasury.
"A lot of Americans didn't agree with giving GM a second chance," Whitacre said in the 60-second ad. "We invite you to take a look at the new GM."
Well, meet the new GM. Same as the old GM. The company is still majority-owned by the federal government, which has a 60 percent stake in the Detroit titan; the Canadian government owns another 12 percent.
GM is not yet solvent, continues to be racked by debt and is still unable to turn a profit — something that has eluded the company since 2004. GM filed for bankruptcy in 2009 but was saved from collapse by a $52 billion infusion from the federal government.
But the company says the repaid TARP loan is a "good start," a signal that the company is emerging from its debts and moving back into the black.
"I think any way you look at it, that we're giving (loans) back with interest before we had to should be taken as a positive sign," said GM spokesman Greg Martin.
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Grandpa:
"A lot of Americans didn't agree with giving GM a second chance". "We invite you to take a look at the new GM." We saw your carnival hawking misleading commercial Mr. Whitacre. It remains infuriating that once again, the government bailed out another inept management team. Guess what Ed, your marketing department's guidance is way off as we are not stupid!
I respectfully decline your invitation
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