Posted on 08/23/2012 5:23:17 AM PDT by Kaslin
Readers with long memories may recall that Charles E. Wilson, president of General Motors and nominee for secretary of defense, got into trouble when he told a Senate committee, "What is good for the country is good for General Motors, and what's good for General Motors is good for the country."
That was in 1953, and Wilson was trying to make the point that General Motors was such a big company -- it sold about half the cars in the U.S. back then -- that its interests were inevitably aligned with those of the country as a whole.
Things are different now. General Motors' market share in the U.S. is below 20 percent. It has gone through bankruptcy and exists now thanks to a federal bailout. But Barack Obama seems to think that it's as closely aligned with the national interest as Wilson did.
"When the American auto industry was on the brink of collapse," Obama told a campaign event audience in Colorado earlier this month, "I said, let's bet on America's workers. And we got management and workers to come together, making cars better than ever, and now GM is No. 1 again and the American auto industry has come roaring back."
His conclusion: "So now I want to say that what we did with the auto industry, we can do in manufacturing across America. Let's make sure advanced, high-tech manufacturing jobs take root here, not in China. Let's have them here in Colorado. And that means supporting investment here."
Was he calling for a federal bailout of other American manufacturing companies? And what does he mean by "supporting investment"? White House reporters have not asked these obvious questions, for the good reason that the president, who has been attending fundraisers on an average of one every 60 hours, has not held a press conference in something like two months.
Obama talks about the auto bailout frequently, since it's one of the few things in his record that gets positive responses in the polls. But he's probably wise to avoid probing questions, since the GM bailout is not at all the success he claims.
GM has been selling cars in the U.S. at deep discount and, while it's making money in China -- and is outsourcing operations there and elsewhere -- it's bleeding losses in Europe. It's spending billions to ditch its Opel brand there in favor of Chevrolet, including $559 million to put the Chevy logo on Manchester United soccer team uniforms -- and just fired the marketing exec who cut that deal.
It botched the launch of its new Chevrolet Malibu by starting with the green-friendly Eco version, which pleased its government shareholders, but which got lousy reviews. And it's selling only about 10,000 electric-powered Chevy Volts a year, a puny contribution toward Obama's goal of 1 million electric vehicles on the road by 2015.
"GM is going from bad to worse," reads the headline on Automotive News Editor in Chief Keith Crain's analysis. That's certainly true of its stock price.
The government still owns 500 million shares of GM, 26 percent of the total. It needs to sell them for $53 a share to recover its $49.5 billion bailout. But the stock price is around $20 a share, and the Treasury now estimates that the government will lose more than $25 billion if and when it sells.
That's in addition to the revenue lost when the Obama administration permitted GM to continue to deduct previous losses from current profits, even though such deductions are ordinarily wiped out in bankruptcy proceedings.
It's hard to avoid the conclusion that GM is bleeding money because of decisions made by a management eager to please its political masters -- and by the terms of the bankruptcy arranged by Obama car czars Ron Bloom and Steven Rattner.
Rattner himself admitted late last year, in a speech to the Detroit Economic Club: "We should have asked the UAW (the United Auto Workers union) to do a bit more. We did not ask any UAW member to take a cut in their pay." Non-union employees of GM spinoff Delphi lost their pensions. UAW members didn't.
The UAW got their political payoff. And GM, according to Forbes writer Louis Woodhill, is headed to bankruptcy again.
Is this really what Obama wants to do for all manufacturing across America? Let's hope not.
I have been the GM of a new car dealership since 1990. Fortunately, before the BK of GM, I bailed out to a Ford dealership. The auto business is ‘roaring back’ so well that in 2007 and 2008, I put my son through college with my life savings. My income is now up to approximately 60% of what it was in 1998, with no retirement, only a small 401K that has the potential to lose money every month. In my area, probably 20% of the dealerships are closed, and the ones that made it sell about 40% as many as in the 90’s. This is really roaring back! My plans are to work till I’m 75-80, then choose between starvation and suicide. Of course instead of being a capitalist, I could have become a govt worker out of college, and I’d be retired now with a lifetime pension, insurance, etc.
I thought they did that - except for Buick. And Buick sells well in China.
GM wanted Obomination, they got him. GM, along with "made in the cess-pool Detroit" Chrysler are now known as OBAMA Motors Inc.
I have seen left wingers taglines saying that
“Despite Obama Bail-Out”?How about”Because Of Obama Bail-Out”??Everything this IDIOT touches or meddles with turns into SH*T!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
“W” and Barbara had the Obamas over for the traditional reception at The White House(shortly before The Immaculation.Afterwards,”W”was heard to remark”He’s Clueless”.Tell us something we didn’t already know!!!!!!!!!
Has GM started producing Zyklon-B yet? Or is GE supposed to do that?
This brings up many questions and possibilities. Will the government step in a second time to prevent bankruptcy? Because, the last time all stock went to 0, this time the unions and government are holding most of the shares. Will the government step in and artificially raise the stock price? At least to the point where they could sell it with out losing too much. And will the government step in to help GM, by giving GM as many government fleet contract as possible? New military vehicles, FBI, etc cars and trucks. Getting into bed with GM is going to hurt tax payers no matter what the outcome, but maybe we can make some money in GM stock so it won't hurt so much.
What percent of GM is owned by countries other that the United States — China for one?
GM cancels their NFL advertising contract because the liberals like Obama that own it think football is “violent”.
GM then goes and spend $700 million of US TAXPAYER money on British soccer advertising instead.
My husband did.
My old man worked for Allison in 1940-41 and never thought much of GM. They were tyrannical and didn't care about safety issues. He told me years ago he'd never buy a GM car -- he considered one once (a 1966 Corvair) but ended up going with a Plymouth -- he had a family to haul.
He was as good as his word, he died with a Plymouth and a VW in the driveway.
He always said that GM's problem was, they weren't a car company -- they were just a bunch of bankers who owned a car business, and didn't care about the product.
I had a total of three GM company cars in the 1980's after he died, and boy howdy, was he ever right. They sucked big, big time.
How dare you pretend to make an important call like that! That's what Death Panels are for.
Makes me even more happy that Everton beat them the other day.
Who knows where the money really is. My husband's brother-in-law (in Michigan) who is a designer for GM was told he has no retirement. I think I have that straight. I don't know if they laid him off or if he retired and was told this.
Don't know who's at the helm in GM but shareholders need to get someone else. And why they got rid of Saturn is beyond me. I have a 2007 Aura and it has been one dependable car. Good quality too. They would have been better off getting rid of duplicates - pickups - Sliverado or Sierra? Or SUVs - Equinox or Acadia? Like that.
OH, I guess you are right, the all important government brain trust should make all decisions!
No it didn't! It went through something, but it certainly wasn't bankruptcy. The Obama regime out and out BROKE bankruptcy law to pay off the UAW and to punish non-union companies and workers, as well as auto dealers that weren't paying the proper tribute to the regime.
My guess is the next time, they'll break the laws again, since they were able to get away with it the first time, and screw the taxpayer for far more than a piddly 25 billion dollars.
Mark
Do you know how Ford is doing financially? It has to better. I just don’t know.
Saturns were built in a right to work state.
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