Harley Davidson’s secret $2.3 billion taxpayer bailout
#1
Harley Davidson’s secret $2.3 billion taxpayer bailout
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According to a new disclosure by the Federal Reserve, Harley-Davidson was given a previously secret $2.3 billion bailout during the fall of 2008 and winter of 2009. We’ve previously reported that Harley borrowed nearly $1 billion in emergency operating capital from Warren Buffet at 15% interest during the same period and has since upped that amount to nearly $2 billion from other lenders. The disclosure of this emergency aid by the Fed gives a new indication as to just how close Harley was to the brink during the darkest days of the financial crisis and a new indication of how much American taxpayers spent to keep it open.
The bailout provided to Harley is just a drop in the bucket of $3.3 trillion total emergency aid just disclosed by the fed, other recipients include everyone from the usual Wall Street suspects to McDonald’s, foreign banks and even the South Korean government.
“The American people are finally learning the incredible and jaw-dropping details of the Fed’s multitrillion-dollar bailout of Wall Street and corporate America,” stated Senator Bernard Sanders (I, Vt). “As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”
The aid took the form of the Fed purchasing large amounts of commercial paper at non-market rates in order to fund the daily activities of these corporations and organizations. Between October, 2008 and February, 2009, the Fed bought paper from Harley-Davidson 33 times for a total of $2.3 billion.
“It is hard to say what would have happened without the facility, and how its absence might have affected GE, but overall the program was extremely effective in helping stabilize the market,” a GE spokesperson told The Washington Post. GE took $16 billion in aid under this program.
“We took an enormous amount of risk with the people’s money,” the president of the Dallas Federal Reserve told The Post. “We didn’t lose a dime, and in fact we made money on every one of them.”
Senator Sanders suggests the corporations that received this aid got off easy for irresponsible financial practices and that loaning them the money hasn’t altered their practices or even created jobs. “We bailed these guys out, but the requirements placed upon them had very little positive impact on the needs of ordinary Americans,” said the Senator.
Harley-Davidson’s net income fell from a record $1,043,153 in 2006 to a $55,116 loss in 2009. During the same time period, total motorcycle shipments fell from 349,196 to 223,023. That drop in sales isn’t enough to explain why Harley needed $2.3 billion from the federal government, instead, it seems as if the company’s exposure to bad debt by Harley-Davidson Financial Services is really what led to the company’s apparent near-death.
The bailout provided to Harley is just a drop in the bucket of $3.3 trillion total emergency aid just disclosed by the fed, other recipients include everyone from the usual Wall Street suspects to McDonald’s, foreign banks and even the South Korean government.
“The American people are finally learning the incredible and jaw-dropping details of the Fed’s multitrillion-dollar bailout of Wall Street and corporate America,” stated Senator Bernard Sanders (I, Vt). “As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”
The aid took the form of the Fed purchasing large amounts of commercial paper at non-market rates in order to fund the daily activities of these corporations and organizations. Between October, 2008 and February, 2009, the Fed bought paper from Harley-Davidson 33 times for a total of $2.3 billion.
“It is hard to say what would have happened without the facility, and how its absence might have affected GE, but overall the program was extremely effective in helping stabilize the market,” a GE spokesperson told The Washington Post. GE took $16 billion in aid under this program.
“We took an enormous amount of risk with the people’s money,” the president of the Dallas Federal Reserve told The Post. “We didn’t lose a dime, and in fact we made money on every one of them.”
Senator Sanders suggests the corporations that received this aid got off easy for irresponsible financial practices and that loaning them the money hasn’t altered their practices or even created jobs. “We bailed these guys out, but the requirements placed upon them had very little positive impact on the needs of ordinary Americans,” said the Senator.
Harley-Davidson’s net income fell from a record $1,043,153 in 2006 to a $55,116 loss in 2009. During the same time period, total motorcycle shipments fell from 349,196 to 223,023. That drop in sales isn’t enough to explain why Harley needed $2.3 billion from the federal government, instead, it seems as if the company’s exposure to bad debt by Harley-Davidson Financial Services is really what led to the company’s apparent near-death.
#2
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Gotdamn FED and the raping of the American people. This is true socialism, the privatization of profits and socializing losses. So BMW and Harley got easy help as with the well publicized Chrysler and GM.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
#3
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Gotdamn FED and the raping of the American people. This is true socialism, the privatization of profits and socializing losses. So BMW and Harley got easy help as with the well publicized Chrysler and GM.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
#4
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Gotdamn FED and the raping of the American people. This is true socialism, the privatization of profits and socializing losses. So BMW and Harley got easy help as with the well publicized Chrysler and GM.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
BOA made 30% improved profits last quarter... off... CHINA deals... that WE paid for...
Sleep well
#6
this is the second time HD has been bailed out. How about you just go out of business if you can't afford to keep the doors open, we tax payers can't afford to keep bailing out loser corporations. Its not like they are saving lives over there or have some product the world needs like AIDS medication, in fact they are just death traps.... enough already.
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#8
Gotdamn FED and the raping of the American people. This is true socialism, the privatization of profits and socializing losses. So BMW and Harley got easy help as with the well publicized Chrysler and GM.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
It was hand outs for them and FU to everyone else, those "everyone else" being the taxpayers that gave them this money.
Absolutely pathetic.
And there's no point politicizing it (not that you were). Bush started the bailouts. Obama continued them. But they had to be done.
In hindsight, they could have been handled better. The banking buyouts should have had conditions. They were essentially written a blank check. Then they didn't make any loans, which was the whole point of bailing them out. But all in all, things could have been much, much worse.
#10
Lexus Fanatic
I know. We see it (and, of course, hear it ) it every Memorial Day, here in the D.C. area, when Rolling Thunder comes through. A few of my ex-co-workers, in fact, participate in it.
And, on top of that, many Harley riders, like Ford F-150, Silverado, and Dodge Ram owners, are fiercely loyal, and it has proven difficult to get them to switch to other bikes.........that, of course, helps Harley somewhat in weathering recessions
#11
Lexus Fanatic
Harley-Davidson’s net income fell from a record $1,043,153 in 2006 to a $55,116 loss in 2009. During the same time period, total motorcycle shipments fell from 349,196 to 223,023.
I'm a firm opponent of juries giving out awards based on simple driver/rider neglect, but it often does happen.
#13
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I wonder if this was more of just a big business tactic, borrow money and make more money while your own money is earning for you, that is how millionaires become multi millionaires.