Ok. The 1st Gear on the Morning Shift today talked about Ford, GM, Chrylser and bailout money again.

Todays The Morning Shift

As usual a FP Troll has to say "FORD TOOK MONEY TOO". Stop it. Just stop. They took a loan. They payed their loan back (or are currently paying, irrelevant either way.

For the last time, Ford did NOT get bailed out

(random sweet Mustang in front of Ford World Headquarters for you! Thanks Google Image Search)

Let's look into this a little bit.

Bailout = government gave you money to save your ass, you are not responsible for paying them back, no payments, interest rates, or terms involved.

Loan = whether it's a government loan or a private banking loan. A loan will have terms, interest rates, and payments to make sure the issuer is returned their money (plus interest).

At the end of this giant thing called the Auto Bailouts that had the CEO's of 3 of the US's biggest companies in front of congress the US government lost over 10 billion dollars. Yeah, I said billion with a "B". That's tax payers money.

In the particular situation of GM, the government in exchange for giving them a crap load of money took shares. This is kind of more of a "buyout" than a "bailout" because the US Government got something for it. They even got to influence company leadership (probably for the better but irrelevant to this discussion). When they felt the company was more stable the government sold off their shares to make some money back. The problem is they lost 10 billion when they sold them.

None of this happens with Ford because they took a LOAN, with fixed terms and repayments.

Here's some reference links for how the government lost money on GM and Chrysler:

http://www.nbcnews.com/business/autos...

http://www.forbes.com/sites/joannmul...

I left off the 3rd one I used on the front page because it was so out-dated.

Am I missing something here? Why is this still up for debate after all this time? People have told me (and not just today) that Loan vs Bailout is just semantics, but I'm sorry they are different things!

—-

—-

UPDATE

—-

BigBlock440 has given me some nice reference to show that Chrysler paid back what it took as you can see here:

Uh, so you're saying Chrysler didn't have to repay?

http://money.cnn.com/2011/05/24/aut...

http://www.nytimes.com/2011/05/25/bus...

Seems like a loan