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Why Some Americans Will Never Buy a GM Vehicle
National Legal & Policy Center ^ | June 14, 2012 | Mark Modica

Posted on 06/14/2012 10:17:10 AM PDT by jazusamo

I recently wrote about a boycott of General Motors' products that was contributing to the company losing market share. The Heritage Foundation now has come out with a report that analyzes the wealth redistribution which occurred during the Obama Administration orchestrated GM bankruptcy process. This redistribution saw money taken from US taxpayers and GM bondholders and given to the politically powerful UAW. The unethical behavior at Government Motors, which has been occurring both during and since the bankruptcy process, gives reason enough to those paying attention to eliminate GM vehicles from the many quality choices offered to new car shoppers.

The Heritage Foundation report confirms what I have long expressed, which is that UAW members sacrificed little compared to other, less politically-favored groups. Even the allegedly corrupt and seldom honest ex-car czar, Steve Rattner, is quoted as stating, "We asked all the stakeholders to make very significant sacrifices. We should have asked the UAW to do a bit more. We did not ask any UAW member to take a cut in their pay." That statement differs from his stance during the GM bankruptcy process when he stated that UAW members deserved to get paid because they made the cars and GM bondholders didn't because they made a bad investment choice. Rattner's previous warped philosophy had no basis in contract law. And for the record, sacrifices weren't "asked for," they were forced.

As little as I respect Rattner, I have to give him credit for being the only member of the Obama Administration or GM who admits that the UAW sacrificed little in the bankruptcy process. While the workers of the UAW deserve to be paid a fair wage, it is totally dishonest to portray the group as having made noble sacrifices to save GM. In fact, the pension plans and benefits that were protected now leave GM with under-funded pension obligations of $25 billion. The higher cost of labor at the company causes GM to operate at lower profit margins than competitors, a fact that Obama-appointed CEO, Dan Akerson, refuses to acknowledge when trying to explain GM's poor stock performance .

The injustice of the GM bailout that cost the taxpayers billions of dollars is enough in itself to boycott GM. What solidifies the negative sentiment is the constant dishonesty and ethical shortcomings at Government Motors as Obama campaigns on the "success" of the bailout. There is now a reliable indicator of how you can tell if GM executives or those in the Obama Administration are lying when they talk about the great success of the company and its political flagship vehicle, the Chevy Volt. That is, their lips move.

The list of questionable ethical behavior at Government Motors is long. The Department of Energy continues to throw good money after bad on its failed green energy initiatives by giving millions of dollars in advisory fees to law firms that cooperated in the GM bankruptcy process. Another $2.7 million of taxpayer money is being handed out to GM to "develop an integrated super-vacuum die casting process using a new magnesium alloy to achieve a 50% energy savings compared to the multi-piece, multi-step, stamping and joining process currently used to manufacture car doors." Why should taxpayers pay for that?

Cronies within GM get their piece of the pie as well. The wife of GM CFO, Dan Ammann, saw her firm awarded a $600,000 contract for an online ad campaign. Even though the SEC was not properly notified of the potential conflict, don't expect a government agency under a president that is campaigning on GM's perceived success to make many waves for the company.

NHTSA has also been criticized for its response to Chevy Volt fires. Regardless of whether or not the fires are evidence of safety issues for the Volt, the agency seemed to forget its obligations to motorists' safety as they were reluctant to publicize news of the fires. They even issued a statement saying the Volt was perfectly safe; before the investigation was complete!

The list goes on. GM's parts supplier, Delphi, had UAW pensions protected while non-union workers lost theirs . Federal funds went to localities so that they could help prop up dismal Chevy Volt sales as false claims of huge demand for the vehicle were made by GM. GM was given huge tax credits enabling them to go years without paying their fair share of taxes . Billions of taxpayer dollars were given to GM's former finance arm, Ally Financial (formerly GMAC) to ensure future funding for GM retail loans and dealership inventories. Promises to back warranty issues for cars sold by "old" GM were broken. Misrepresentations were made that taxpayers were repaid in full. Is it any wonder that those who are aware of these types of misconduct refuse to buy a GM product?

It is a ridiculous defense of GM to say the process had to play out in this manner or the automotive industry would have collapsed. There is no justification for dishonesty, cronyism and political paybacks. If GM wants to appeal to all Americans instead of just to those who condone or are unaware of the bad behavior, they have a long way to go. A removal of the government from GM operations would be a first step as Treasury should not be gambling taxpayer funds by continuing a market-timing strategy for exiting its ownership stake. There are many conflicts arising from a president campaigning on a platform that touts the bailout of GM as the only accomplishment of the Administration, other than the assassination of Bin Laden.

After the government divests its taxpayer-funded stake, management that has been appointed by Obama should be removed. The political undertones of the company have been witnessed as Republicans were blamed for hurting Chevy Volt sales and disproportionate money is spent to market the vehicle, which loses money for shareholders while supporting the failing green agenda of Obama. Akerson should exit with all board members that were appointed by the Administration.

The final closure on the GM bailout debacle will come when there is an admission that certain groups were unfairly treated in the process. An apology is owed to taxpayers, GM bondholders, Delphi non-union retirees and any other group that lost its rights as a result of the unprecedented government intrusion into the auto industry. I wouldn't hold my breath waiting, but until that time I have one thing to say. Car companies other than GM are making some nice vehicles!

Mark Modica is an NLPC Associate Fellow.


TOPICS: Business/Economy; Government; Politics
KEYWORDS: bailout; gm; governmentmotors; uaw
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To: jazusamo

ping


41 posted on 06/14/2012 1:23:52 PM PDT by ThirstyMan
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To: pogo101

I love our 1996 Suburban but chose to recently buy a Lincoln Navigator. Will never buy another GM car. Love the Navigator.


42 posted on 06/14/2012 1:28:52 PM PDT by agondonter
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To: jazusamo; a fool in paradise
An Opel I'd hit.


43 posted on 06/14/2012 1:35:18 PM PDT by Revolting cat! (Let us prey!)
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To: jazusamo

I’m strictly Acura/Toyota. Reliable as can be. My Sequoia has 160,000 and is still in perfect shape. My Acura TSX is the best car I’ve ever owned.


44 posted on 06/14/2012 1:42:21 PM PDT by albie
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To: jazusamo

Yup, no GM or Chrysler for me...

When the government sends me a check for the damage, I’ll reconsider.

I have a Honda and a Ford, and like them both.


45 posted on 06/14/2012 1:44:26 PM PDT by cookcounty ("We're all born idiots, and we only get over that condition as we get less young." -J Goldberg)
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To: tcrlaf

Ford has the Expedition el, an expanded version, thats nearly identical dimension/ wheelbase as suburban, instead of excursion.


46 posted on 06/14/2012 2:53:40 PM PDT by jkeith3213
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To: Uri’el-2012

This happened to my 80 year old Dad, who lost 90% on the value of his GM bonds, which he was going to use for his retirement. He lost about $200,000. GM? Dead to me...


47 posted on 06/14/2012 3:05:32 PM PDT by vicdoc
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To: Noumenon

I’m definately hanmging on to my ‘08 silverado, just love it!


48 posted on 06/14/2012 3:12:30 PM PDT by Iron head mike (The government will soon make criminals of us all.)
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To: Noumenon

I’m definately hanging on to my ‘08 silverado, just love it!


49 posted on 06/14/2012 3:12:49 PM PDT by Iron head mike (The government will soon make criminals of us all.)
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To: muir_redwoods

I quit buying GM in the 80s. I like toyota.


50 posted on 06/14/2012 3:52:57 PM PDT by plain talk
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To: vicdoc

Your Dad was getting very bad investment advice. It was pretty obvious GM was going to auger in at least a year before they went bk.


51 posted on 06/14/2012 3:58:43 PM PDT by nascarnation
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To: jazusamo

I won’t buy one.


52 posted on 06/14/2012 4:08:36 PM PDT by stevio (God, guns, guts.)
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To: tcrlaf
Not sure what I will replace it with in a couple of years. Ford quit making the Excursion. But I know it won’t be a Gubment Motors product.

Ford pulled a really sly fast-one with getting rid of the Excursion. They were taking a lot of flak over it, and given that it went against their stated direction of becoming more eco-friendly, they announced - in a VERY big way - that it was going to be discontinued. Lefties cheered! Focuses were sold!

THEN they came out with an expanded/extended version of the Expedition that's basically an Excursion with different sheet-metal tweaking and a different nameplate.
53 posted on 06/14/2012 4:18:18 PM PDT by tanknetter
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To: jazusamo

I simply WILL NOT buy a car made from UAW people (or any unionized people).

I want the people that put together my car to love their company and their job, rather than HATE their company and this country.

That simple.


54 posted on 06/14/2012 4:24:59 PM PDT by BobL
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To: geege

Had a 2011 Camaro as a rental for a week. I agree it is a beautiful machine with a ferocious amount of power but I couldn’t get over feeling as though I was sitting in a bathtub the whole time I was driving it.


55 posted on 06/14/2012 5:26:37 PM PDT by SkiKnee
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To: SkiKnee

LOL.....Never thought of it as having a bathtub feel to it but I’ll judge that for myself whenever I can afford to buy one(:


56 posted on 06/14/2012 5:44:21 PM PDT by geege
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