Is GM using AIG as its role model?

Image by AFP/Getty Images via Daylife

Okay, I’m overstating the case. But I couldn’t help but gasp when I read in today’s NYTimes that the government has authorized GM to use $2.8 billion of our money to, as the Times put it, “help its former parts division, the Delphi Corporation”

Now, I have no problem with GM helping Delphi. Delphi makes parts, GM needs parts, each one needs the other to be strong. But…

G.M. said it received $1.7 billion last month from a escrow account financed by the Treasury Department to buy an interest in the reorganized Delphi, which spent four years mired in Chapter 11 protection before successfully exiting last month.

It received $1.1 billion to spend on its acquisition of Delphi’s global steering business, which G.M. has said it planned to sell.

Let me get this straight. We lend GM money. GM uses some of that money to buy a Delphi unit. And now GM plans to flip the unit?

Why doesn’t Delphi sell the unit itself? Why are my tax dollars going to pay investment bankers and consultants and others who wind up making out like bandits whenever there’s a divestiture or merger in the offing?

I don’t want to lose faith in the Obama Adminsitration. I really don’t. But do these guys have any idea what they’re doing? I’m not seeing conflicts of interest or corruption or any other smart, if despicable, shenanigans. I’m seeing cluelessness, and I think that scares me a lot more.