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Archive for the ‘GM’ Category

General Motors Chairman and CEO Dan Akerson, right, gives a closer look of the Buick Verano to congressmen Sander Levin, D-Royal Oak, left; Steny Hoyer, D-Md.; and Gary Peters, D-Bloomfield Township, at January’s North American International Auto Show in Detroit. (John F. Martin / GM)

Really.  GM’s CEO wants a $1/gallon gasoline tax

General Motors comes into the public schools in order to sell Chevy Volts to children.  No, I’m not kidding you.   This very thing occurred in the Troy School District in Troy, Michigan.

Today, imagine my surprise when my 3rd grader came home with his usual pile of school work for me to look at, when just beneath the A on his most recent spelling test, I found this:

Wait.  What?  They gave him a pamphlet complete with leasing information and MSRP?!  A pamphlet that appears to have been read from cover to cover with child-applied highlighting?!

“Son, exactly what is this?”

“Oh, that was our presentation on the Chevy Volt.  Look, how awesome it is, we have to get one…..”

“What the…..??  I said, cutting him off.  ”You mean they passed these pamphlets out to you and they told you to take them home to your parents? Who was it that passed these out to you.”

“No, mom.  Jimmy’s {not his real name} mom brought them in.  All the third grade teachers passed them out and we had a big discussion about how great the cars are and they even had one at the school!  A brand new one!  One of the teachers got to drive it and everything! It’s going to save the planet and we have to get one and….”  My son said in one big excited stream of dialogue.

“WHAT?  You mean they wasted a substantial amount of time in class convincing you to sell a vehicle to your parents from a company that is wholly owned by the government?  They want you to tell your parents to buy one, when in fact, any child with working parents has probably contributed enough taxpayer money to GM to have earned a free one at this point?  This being the same General Motors that lobbied Congress to force the entire country to bail them out and save them from bankruptcy?!”

“Huh?  I don’t get it mom.”

“Well, son, let me explain.”

So, the first thing I did was direct him to my most recent article on General Motors, posted on June  2nd.  Obama Administration Knew GM Lied About Paying Back Taxpayers .  It’s a short article, so I had him read it. 

So, he clearly saw they lied.  “Why did they lie?” He asked me. 

I told him that it was because they haven’t paid back anything to the American taxpayers.  As of today, GM is indebted to the taxpayer to the tune of roughly $27 billion.  Last year they made a big deal out of proclaiming that they had paid back the taxpayer by giving the US government stock and “returning” some of the borrowed money.  It’s the last bit that his the biggest lie.

What they did was take money from their TARP bailout funds and apply it to the primary bailout fund.  “Yes, son, they paid off their Visa card with their MasterCard, but both cards are owned by the US taxpayer.”

Here, I’ll just let this nice man explain it in terms even a third-grader can understand:

Apparently, General Motors, a de facto part of our government, now views our public schools as their private,  captive audience and they plan to exploit it.  If third-graders got a half-hour presentation enticing them to get their parents to purchase a Chevy Volt, imagine what they are doing in the upper grades where the kids can actually DRIVE!

What was my son’s reaction to all this?  Well, he asked for a piece of construction paper. Specifically, he wanted it in pink.  (Strange for a small boy who hates pink.)   So, I gave it to him and he busily drew, colored and wrote, after which he handed me what turned out to be a pink card.  It was for his grandmother.  “Dear Grandma, congratulations!  I’m so glad you work for a car company that does not lie and does not force people to give them money or trick little kids to sell cars for them.”  Inside was a picture of a Ford Edge.  Grandma has worked for Ford for more than 20 years. 

I think he gets it.  I probably shouldn’t tell him about how GM dealerships have been caught pocketing the tax credit meant for consumers when they purchase a Volt.  Best not to make his little head explode.

The Obama administration, already under fire for unprecedented allegations of racial bias, faces a new bias claim from a most unlikely source: one of the administration’s own inspectors general.

Decisions on which car dealerships to close as part of the auto industry bailout — closures the Obama administration forced on General Motors and Chrysler — were based in part on race and gender, according to a report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky.

[D]ealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships. [Emphasis added.]

Thus, to meet numbers forced on them by the Obama administration, General Motors and Chrysler were forced to shutter other, potentially more viable, dealerships. The livelihood of potentially tens of thousands of families was thus eliminated simply because their dealerships were not minority- or woman-owned.

As has been widely reported, the Inspector General’s study skewered the Obama Gang for strong-arming the companies into closing 2,000 dealerships, costing an estimated 100,000 people their jobs during a recession.

But the news media has ignored key elements of Barofsky’s report — elements that are far more damaging, if possible, to Obama. As we reported earlier in the week, a top Obama official, manufacturing czar and “Auto Team” leader Ron Bloom admitted that the dealerships could have been kept open, saving those jobs, “but that doing so would have been inconsistent with the President’s mandate for ‘shared sacrifice.’”

Barofsky says the administration insisted on the closings even though a GM official told him

that GM would usually save ‘not one damn cent’ by closing any particular dealership. … Furthermore, a GM official stated that removing a dealership from the network does not save money for GM — it might even cost GM money — and that savings cannot be attributed or assigned to any one dealership.

And a reading of the IG’s study makes plain that some dealership closings forced by the administration were based largely on politics.

The report is highly critical of how dealerships were selected for closure, or termination. Barofsky notes that

experts said that while metro areas were oversaturated with GM and Chrysler dealerships and reductions were needed in these areas, this was not the case in rural areas where GM and Chrysler had an advantage over their import competitors. [...]

Although sales volume in small towns may be lower, the cost of operating dealerships in small towns is lower as well.  In addition, closing dealerships in small towns could ruin the “historic relationship” that GM has had with residents in small towns and force buyers to drive to metro areas, where there are more competitors. In the worst case, the loss of market share in small and medium-sized markets could “jeopardize the return to profitability” for GM and Chrysler, the (the Center for Automotive Research) representative said.  Representatives from the National Automobile Dealers Association also concurred that dealership terminations would cause GM and Chrysler to lose market share in rural areas. [Emphasis added.]

Nevertheless, as Barofsky notes, “ultimately close to half of all of the GM dealerships identified for termination were in rural areas.”

That is where raw, hard, sewage-filled Chicago politics came into play.

Records indicate that in 2008, Obama lost the vote totals in the nation’s 1,300 rural counties by nearly 80%.

The Obama administration’s insistence on radical numbers of closures ended up shuttering dealerships in those rural areas disproportionately, while dealerships and jobs in metro areas — Obama’s geographical base — were left open.

Additionally, it has been widely theorized that dealers targeted for closure as a result of Obama’s interference were predominantly those who donated campaign contributions to Republicans. Although evidence to date is largely anecdotal, given what we’ve already reported about the Obama administration’s handling of the auto bailout, such speculation does have considerable grounds for support.

While that last point is leaves room for debate, the details contained in the Barofsky report are not. As Barofsky points out, the Obama administration was given an advance copy, and “Treasury [the Obama Treasury Department] might not agree with how the audit’s conclusions portray the Auto Team’s decision making or with the lessons that SIGTARP has drawn from those facts, but it should be made clear that Treasury has not challenged the essential underlying facts upon which those conclusions are based.”

Included among those undisputed facts:

-”[D]ealerships were retained because they were … minority- or woman-owned dealerships”;

-Thousands of jobs were lost, unnecessarily, due specifically to Obama’s “mandate for shared sacrifice”;

-A disproportionate number of Obama-forced closings were of rural dealerships, in areas unfriendly to Obama, even though such closures could “jeopardize the return to profitability” for GM and Chrysler.

The media, of course, remain mute about these serious allegations in the Barofsky report. They have limited their coverage to the job loss numbers and tried to place the blame on Treasury Secretary Turbo-Tax Tim Geithner.

Before long, we’ll be reading that it was somehow Bush’s fault.

Left Lane News reporting on the UAW and Ron Gettlefinger:

UAW Chief: Workers Can’t Afford Own Products

By Andrew Ganz

 

United Auto Workers union chief Ron Gettelfinger indicated yesterday that the $14 per hour base wage earned by an entry-level worker building Chrysler, Ford and General Motors products isn’t enough to buy a new car.

The argument comes nearly 90 years after Henry Ford began paying workers $5 per day in hopes that the workers would be able to afford one of their own products, a Ford Model T.

Gettelfinger said that it’s a “fair question” whether or not auto workers can afford the products they’re assembling. An economist for Comerica, Dana Johnson, confirmed Gettelfinger’s comments by saying that a single income UAW worker making $14 per hour probably can’t afford a new car.

But a dual income family? “Then they could clearly afford a new car,” Johnson told the Detroit News.

The UAW negotiated the $14 hourly rate in 2007 and, despite his concern that workers can’t live up to the standard promised by Henry Ford, Gettelfinger nonetheless defended the concessions. More tenured workers earn more than double the $14 hourly rate.

We did what we had to do to get to tomorrow,” Gettelfinger said.

Awwww…..I feel so sorry for them.  Well, guess what?  The REST of us can’t afford your products either and it isn’t OUR fault they’re so expensive.  Ironically, it is the UAW’s fault.  The $14.00/hour for an ENTRY-level position on the line is the SAME wage that my husband, a carpenter with 25-years of experience makes when working for one of the big national builders.  It is just slightly lower than the $17.00/hour he can make with some smaller companies or on his own right now.   Also, it is MORE than my husband is currently making employed in the IT department for Hewlett-Packard. 

That being said, it is the UAW themselves that have played no small part in the precipitous increase in the cost of automobiles that has far surpassed any increase in wages.  However, none of us non-union workers in the private sector can just hog-tie entire industries and force them to cave into our demands, nor can we go cry to Congress and mandate a bailout of our respective industries.

So, to Mr. Gettelfinger I say, it’s just too ironic that the UAW has priced themselves right out of being able to purchase the cars they manufacture.  Welcome to our world.  Those of us out here trying to earn a living without government subsidies and favors and without holding our employers hostage to our demands can’t afford your cars either.  Wonder what happens when the price of cars gets to be so out of whack with incomes that no one can afford them?  The UAW will probably demand more money.  That’s what.

Rep. Darrell Issa (R-CA) to GM on bailout shell game: “dangerously close to committing fraud,” “you might have colluded with the U.S. Treasury to deceive the American public”

As I reported several times already, the Obama administration, through its appointed CEO Ed Whitacre delivered a blitzkrieg of public advertising with supposed good news in claiming that GM had paid off its government TARP loan 5 years early and with interest. The intellectually non-curious MS regurgitated the talking points with nary a question. I had one one though – how could a company that hadn’t posted a profit since 2004 pay back anyone a single red dime? In fact, I was the first blogger, to my knowledge, to pose that GM paid back its government loan with other government loan money. Here are the hard facts as I have reported before:

1. There were essentially 2 bailout accounts, one an $8 billion loan and the other a $49.5 billion escrow account (like a line of credit), both from TARP funds
2. GM used the escrow TARP funds to pay the TARP loan
3. GM did this to get another $10 billion loan from the Department of Energy (see update on this post)

The FTC might get involved. Rep. Darell Issa of California is one of very few legislators that are essentially calling the shell game what it is – fraud, the other f-word. From The Detroit News: GM ‘close to commiting fraud’ in ad, lawmaker charges

…Rep. Darrell Issa, R-Calif., the ranking member of the House Oversight and Government Reform Committee, said in a letter obtained by The Detroit News today to GM chairman and CEO Edward Whitacre Jr. that the company “has come dangerously close to committing fraud and that you might have colluded with the U.S. Treasury to deceive the American public.”

GM’s ads featured Whitacre touting that fact that GM “repaid our government loan in full, with interest, five years ahead of the original schedule.”

Of course, GM declined to comment on Issa’s letter, but spokesman Greg Martin said that “our work is not finished, but repaying our loans with interest is a clear sign that our plan is working, and a critical step toward returning GM to profitability and public ownership.” GM hasn’t made a red cent in profit since 2004. Issa went so far as to argue that GM could face lawsuits if people purchased a GM vehicle based on the commercial. He also called the commercial “counterproductive and shameful.” The White House, of course, touted GM’s repayment as a sign of progress, ignoring the clear fact that they paid off one credit card with another credit card.

Related is this from Instapundit today:

TOM BLUMER: Fun with Numbers: GM ‘Payback’ of Taxpayer Loans. “Taking money from one bailout kitty to pay back another bailout fund.”

When I talked with Mark Tapscott yesterday, he called those GM bailout-payback commercials the most dishonest claims he’s seen in 30 years of covering politics and the auto industry. “It is a lie.”

UPDATE: A related video via Gateway Pundit:

h/t TheBlogProf