America, You Asked For It!

Political News and Commentary from the Right

Here’s your car company America

Well, it’s finally official.  We predicted it from the day Bush first loaned GM $13 billion, and now it’s reality.  General Motors has collapsed under the weight of gross mismanagement and an uncompromising UAW.  GM’s incompetent management team managed to lose $38.7 billion in 2007, a period that saw record revenues for the company.  No matter how you slice it, that’s mismanagement!  We’re hearing the latest UAW concessions don’t cut the ~$70 per hour cost of GM’s labor, but freeze it.  In reality, the union hasn’t given up anything.

Now the American taxpayers are the not-so-proud-owners of this bankrupt, inefficient, ineffective corporation.  President Obama is convinced this is a good investment, even though Americans have consistently been opposed to the bailout of the auto industry.  He’s convinced he’s going  to turn GM around by hiring consultants who’ve never worked a day in the auto manufacturing business, including a 31-year-old law student with no background in business or economics who’s become the primary decision maker in the process.

Recall that Obama, immediately following Bush’s decision to abandon any semblance of free market capitalism in the US, was previously convinced a GM bankruptcy “would have devastating consequences for our economy and our workers.”  Now that he has ascended to the White House throne, and inked a deal to make him the de facto CEO of the former industrial icon, he’s “confident that they can emerge [from bankruptcy] and take advantage of that new market and actually be very profitable and thrive.”

In other words, the former community organizer who, as New York Mayor Rudy Giuliani puts it, “has never led anything, nothing, nada,”1 is narcissistic enough to believe he can take the reins of this monstrosity that was once the very symbol of American capitalism and make it profitable again. With our tax dollars, of course.

If this company were such a great investment, why didn’t left-leaning billionaires like George Soros, Warren Buffet, Michael Bloomberg, and Obama’s Auto Czar Steven Rattner place their bets on this gamble?  The answer is simple.

Regardless how often Obama refers to the bailout as an investment, it’s really one great big experiment–an experiment in Socialism.  The fear tactics employed by the President and his cronies–basically screaming that life as we know it would cease to exist if the banks, Chrysler, and GM were allowed to fail–were used to foment a paranoia in the American citizenry that would allow him to force feed us a Socialist economic system that we would never have otherwise approved or endorsed.

In a recent Fox News poll, only 46% of Americans will even consider purchasing a GM product when they go to buy their next vehicle.  Compare that to the 54% who will consider buying from Ford Motor Co., the only American auto manufacturer who refused government money, and we see the citizens of this country are quite put off by this whole idea of taxpayer financing of failed corporations.  These numbers are even more impressive when you consider that GM has long been the dominant domestic manufacturer in terms of US market share.  Ford has gained an edge by simply insisting on standing on its own.

And how is Obama’s Socialist experiment going so far?  What innovative management decisions has the President made that will save our way of life and perhaps the world?

The closure of more than 1,100 dealerships nationwide will surely alienate customers.  Never a smart move if you’re seeking to grow market share.  Not only will loyal customers be forced to go elsewhere when purchasing a vehicle, but vehicle prices are also certain to increase with diminished competition among dealers.  This trick wasn’t designed to streamline GM.  It was intended to help them survive while maintaining much of the structure that made them unprofitable in the first place. 

The biggest beneficiaries of this strategy are UAW workers.  By increasing the price of GM products, Obama believes he can make the company profitable without demanding any real concessions from his supporters in the UAW.  We the American people are not only being forced to fork over our hard-earned tax dollars to keep this behemoth afloat, but will also be forced to pay more for its products if we purchase them.  The UAW’s over-generous compensation and benefit packages, a major source of GM’s inability to compete with foreign competitors, will be borne by consumers as a result of this move.

The new Government Motors has also announced the closure of several manufacturing and assembly plants.  So, far this sounds like it might actually be a good decision.  But what if the plants to be closed aren’t chosen for profitability, but for political payback?  That certainly appears to be the case in the closing of the Spring Hill, TN assembly plant. 

Obama has called for GM and Chrysler to move away from their large, gas-guzzling models so you would expect plants manufacturing these vehicles to be shuttered.  But the Spring Hill plant was actually built to manufacture GM’s smaller vehicles to better compete with its foreign competitors.  The plant shut down for retool to produce the Chevrolet Traverse, which claims to have the “best fuel economy of any 8-passenger crossover.”  According to Mike Herron, chairman of UAW Local 1853’s bargaining committee, “There’s a billion dollars worth of equipment put in this place over the last 18 months.”

A billion dollar investment in the last year and a half for a vehicle that boasts the best fuel economy of its class and the doors are closing.  Not because GM is discontinuing the Traverse…production of the model will be shifted to Lansing, MI.  And therein lies the rub.  Erich Merkle, an auto analyst based in Grand Rapids, MI recognized the danger to the Spring Hill plant in early April.

At current sales levels, all four vehicles could be built at either plant, but politics could give the Michigan plant the edge, Merkle said. “Spring Hill could be on the bubble because it’s in a red state, and Michigan is a blue state,” Merkle said. “The governor of Michigan is a Democrat, too, and she needs all the plants she can get.”2

I would love to see a per-unit cost comparison between the Michigan and Tennessee plants, but somehow I doubt the “most transparent administration in history,” which now manages GM, will be offering the American public such information. I would have to bet, though, that the plant in conservative Tennessee is cheaper to operate than the one in liberal Michigan.  If it’s obvious to a Michigan-based analyst though, it should be obvious to everyone that Obama’s management decisions at the helm of GM will be based more on politics than on practical business concerns.

Don’t expect it to get better from here.  The President has stated he wants to make GM a “leaner, meaner” company, more efficient and more competitive.  This from a President who quadrupled the national deficit in his first 100 days in office.  He’s pointed out that he doesn’t want to run GM, but now his administration holds 60% of the voting shares of the company.  He’s told us he wants to bring the country together, but his management decisions appear to be based largely on blue state vs. red state lines.

Government Motors, the new GM, the Obama Socialist Experiment…bought and paid for with your money.  Enjoy.


1From former New York Mayor Giuliani ‘s address to the Republican National Convention Sept. 3, 2008.

2Union worries about GM plant in Spring Hill–Oakridger.com

June 2, 2009 Posted by | Socialism | , , , , , , , , | 1 Comment

Little Green Cars

by Larry Kudlow on Townhall.com

Get ready folks: America is about to own a car company. As of Monday, we the taxpayers will own more than 70 percent of GM. Whether the company will be formally renamed Government Motors remains to be seen. But that’s what it will be.

Instead of putting the failed car enterprise into bankruptcy six months ago — where Carl Icahn or Wilbur Ross could have bought it — the Bush administration chose Bailout Nation. Under Team Obama, that bailout has morphed into full-scale government ownership. Twenty-billion dollars of TARP money is already invested in GM, with another $50 billion on the way. And that number could easily double unless GM car sales miraculously climb back to 14 million this year. That’s highly unlikely, with car sales presently hovering around 9 million a year.

In other words, taxpayers are not going to get their money back. Yes, we the people will be left holding the bag for the mistakes of GM’s management and labor leaders over the last four decades.

More

May 30, 2009 Posted by | Bailout | , , , , , | Leave a comment

Nero fiddled while Rome burned…

…and President Barack Obama follows suit.

Recall that he flatly stated private industry couldn’t accept government cash and hold soirees in Vegas, but he never prohibited himself from taking such pleasures. Though he managed to quadruple the deficit in less than 100 days, leaving the taxpayer on the hook for $1.8 trillion more than the government will collect in taxes this year, the President’s most pressing pursuit yesterday was passing time at Caesar’s Palace in Vegas to prompt liberal idealogues to part with $2,000,000 to prop up Senate Majority Leader Harry Reid’s (D-NV) place in the Democratic party. This little party will cost the taxpayer a paltry $265,000.

Now all Presidents pass time protecting their parties by pandering for funds, but at the moment more pressing problems are plaguing the US.

You’ve likely read here that N. Korea tested a long range missile last month and here the same rogue nation tested a nuclear device and here the test was followed by more missile launches, all aggressive acts that defy Obama’s vain attempts to coddle the Communist state into compliance with international demands. Today, the inhospitable neighbor to our two most valuable allies in the region cranked the crisis up a notch (while Obama traverses the US to shore up the coffers of his political allies stateside) by making clear it is abandoning the 1953 armistice agreement that ended the Korean Conflict and threatened a return to a state of war.

South Korea reported an increase in patrols by North Korean fighter jets on the border between the two states and there were reports of naval exercises close to the sites of previous skirmishes with the South Korean Navy.

While I’m sure those responding to the solicitation of funds by Obama still swear by the President’s foreign policy, I hope the majority of Americans will finally awaken and realize how grossly naive such an approach really is.

The North Korean situation is by far the most pressing issue taking place while Obama parades himself around the country as primary panhandler for his party faithful, but other problems persist that could probably benefit from the President’s attention.

It was predicted here days ago, but the President who publicly professed that he doesn’t want to run the auto companies is about to be promoted to CEO of General Motors now that bondholders rejected the company’s offer of pennies on the dollar for the debt owed by the defunct former pillar of American industry. The bankruptcy deal penned by the Obama administration will propel the US government to the position of majority stakeholder in the company, owning approximately 70% of GM shares.

The President, who claims he’s not a Socialist, has plunged us headlong down the path to Socialism and can now proudly proclaim that we have arrived. In a short four months and one week, he has completely abandoned our free-market capitalism to pursue an economic model that seizes private assets and places them under control of government bureaucrats.

One might expect the President to cut short his pursuit to empty the pockets of party patrons, but he presses on.  Tonight, he’s in Beverly Hills rubbing elbows with more high-browed Democratic admirers who refuse to face the fact that his policies have placed our country on a perilous path.

Sleep tight America, your President is partying in Beverly Hills.

May 27, 2009 Posted by | Obama | , , , , , , | 1 Comment

UAW wins, everyone else loses

GM and Chrysler, in a concerted effort with the Obama administration, are destroying Americans’ lives by colluding with the government to seize and redistribute private property–not to protect consumers, not to ensure fair competition, but to reduce competition as a means to protect the UAW and artificially prop up their already overpriced products.

GM’s own North American sales chief  recently stated “Too many dealers, in actuality, is not the problem.  We’ve got too little industry and too little sales we have to contend with.”  Yet, GM informed more than 1,100 dealers their rights to sell the company’s products will be stripped from them next year and Chrysler axed almost 800 dealers effective next month.

George C. Joseph, President and owner of Sunshine Dodge-Isuzu in Melbourne, FL, gave a 1st person account of suffering being imposed on Main Street America by the failed, soon-to-be-government-owned Detroit automakers.  He explains how he and his family have devoted their lives to his profitable dealership since they first purchased it in 1974.  When Chrysler recently demanded he renovate the dealership, Mr. Joseph financed the multi-million upgrade with the understanding that he would continue to represent the now nationalized company.  He owes $3 million on his new car inventory and holds $300,000 worth of Dodge parts in inventory.  Joseph’s family and the families of his 50+ employees have staked their futures on a relationship with Chrysler.

To the new management at Chrysler–the Obama administration–none of this matters.  The new government/UAW-owned Chrysler makes no offer to purchase Joseph’s inventory, his business, or even make good on the renovation loan.  In short, he’s being thrown to the wolves.  His business is effectively being seized by a US government-UAW cooperative and handed to a dealer down the street who will now be able to charge his customers more.  Joseph and his employees will lose their livelihoods, many forced into bankruptcy so the new nationalized Chrysler can charge more for it’s unpopular products.

Pure and simple, this is payback to the UAW for its support of Obama in the presidential election last year.

Since GM and Chrysler first came begging the government for help last year, Americans have overwhelmingly insisted the UAW make serious concessions.  Instead, the President has given the union a disproportionate stake in the companies for the money it was owed versus bondholders whose debt was guaranteed.  Last month, the administration-brokered deal reached by the UAW and Chrysler grants the union a 55% stake in the company.  Using the bailout money received by the banks as leverage, the executive branch forced bondholders to take about 30 cents on the dollar for their debt with no equity stake in the company.

The UAW can’t even run a golf course, but Obama handed it the keys to the boardroom of Chrysler–to the detriment of Wall Street and Main Street.

Is this the change America voted for?  A government that subsidizes failed companies and institutions by seizing or destroying their successful competition. 

It’s the change we got.


Hat tip–American Thinker

May 24, 2009 Posted by | Socialism | , , , , , , | Leave a comment

US Motors just around the corner

President Obama claims he doesn’t want to be in the auto business, but very soon he’ll be the de facto CEO of General US Motors.  GM made the offer late last month, but now Reuters is reporting the government is preparing to accept.

The government’s plans include giving stakes in the new company to GM’s union and bondholders, although the ownership structure of the company is still being negotiated, said the source who is familiar with the company’s plans.

In other words, the Obama administration plans to purchase the bankrupt, defunct manufacturing Goliath before it really knows what it will do with it. The Reuters source wouldn’t specify a purchase price, which leads one to believe the American people will be infuriated if “the most transparent administration in history” discloses what it’s willing to pay to purchase the ruins of this former pillar of American industry.

You may recall President Bush approved a $13.4 billion emergency loan for GM last December. Sorry, but you loan money only when you expect it to be repaid. At the time, many of us recognized that GM had already fallen too far, that the American taxpayer was forfeiting funds we would never recover. Now, it’s apparent we were correct.

In addition, the government would extend a credit line to the new company and forgive the bulk of the $15.4 billion in emergency loans that the U.S. has already provided to GM, the source said.

Imagine that! 

Merriam-Webster’s Online Dictionary gives the following definition for Socialism.

Socialism–any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods

Anyone still denying where we’re headed with Obama’s economic policies?

May 20, 2009 Posted by | Bailout | , , , , , , | 2 Comments

$4 billion down the drain…

…as Chrysler files bankruptcy.

You might recall that in December, we were told bankruptcy of any one of the Big 3 auto companies would take down the entire economy. So then-President Bush shoved the bailouts of GM down the throats of Americans in spite of the fact Congress refused to do so legislatively. The US Treasury made a $4 billion loan to Chrysler along with $13 billion to GM.

Many of us predicted the loans couldn’t cure the auto companies’ ills, and we were slandered and maligned by left-leaning pundits and politicians of both parties. We recognized these loans would simply subsidize failed business models and encourage a continuation of the same failed strategies that put them in this position to begin with.

We said at the time, bankruptcy was the way to go. A court-ordered restructuring would have allowed Chrysler to negotiate concessions with its creditors and unions under the court’s protection and direction. Now, we’re $4 billion poorer and Chrysler’s right where we knew it was headed from the start.

It wasn’t ESP that allowed us to see these months into the future. No crystal ball, no special powers.

The administration, the unions, and management at Chrysler and GM like to blame the current economic crisis for the auto industry’s woes, but it goes so much deeper than that. If the credit crunch was truly the spark that started the fire that burned down the American auto industry, why are foreign companies with manufacturing facilities in the US not closing down too?

The problem with the American giants was smoldering long before the current economic crisis flared up. GM posted record sales in 2007, but also record losses that same year. Figures are harder to come by for Chrysler because it’s not a publicly traded company, but its former owner Daimler has released some figures that show its problems began long before the current downturn. The company lost $3 billion in 2007 and $1.6 billion in 2006. In May of last year, GM was burning cash at a rate of $1 billion a month. All of this before the economy crashed!

Now that our $4 billion have been squandered, the Obama administration is promising another $8 billion in aid in exchange for an 8% stake in the company. The UAW will take a 55% stake in exchange for money owed to its pension plan. So 63% of Chrysler shares will be owned by a partnership of the inefficient UAW and the inefficient US government. Is that likely to result in a streamlined, efficient, and profitable business model. I doubt it.

With the Obama administration preparing to take control of GM, we may need a new bureaucracy (the Department of US Auto Manufacturing?) in DC. Hell, UAW employees may well be integrated into the federal employees’ pension system before it’s all said and done.

This whole ordeal reminds me of a gambler whose lost everything and borrows to “double down” thinking surely he’s due to win. All too often though, the house takes what he’s borrowed as well.

May 2, 2009 Posted by | Socialism | , , , , , , | Leave a comment

Here it comes–USMC

No, not United States Marine Corps. United States Motors Corporation.

That’s right. GM, the former icon of American capitalism, could well be the first icon of American Socialism!

GM is offering over 50% of its stock–a controlling interest–to Uncle Sam to cover the ill-advised multi-billion dollar bailout initiated by Bush and exacerbated by Obama. After all the promises that government loans would save the company, the US government just bought itself a car company!

Let’s see, the same government that’s bankrupting Social Security, hemorrages cash through the USPS, forced FRE and FNM to back bad loans, and forecasts trillion dollar deficits as far as the eye can see is somehow going to bring this manufacturing giant back to profitability? Right!

Oh, but Uncle Sam will have plenty of help running this behemoth even deeper into the ground

The automaker also proposed that the United Auto Workers take GM stock for at least half the $20 billion the company owes to a union-run trust…Combined, the union and government would own 89 percent of the century-old automaker

Though we saw it coming, this is truly a sad, sad day in the USA USSA–United Socialist States of America.

April 28, 2009 Posted by | Socialism | , , , , , , | 2 Comments

Capitalism wins…barely

#tcot

This Rasmussen poll illustrates just how far we’ve shifted toward giving up the ideals that allowed the US to become the world’s strongest and most powerful nation in a little less than 200 years.

Only 53% of Americans prefer a capitalist economic system to socialism, while 20% desire the change to the latter.  Perhaps even more disturbing is the 27% who aren’t sure.  How can you not be sure?  Do these 20% not understand the difference between the two?  Has our educational system failed so miserably that nearly a third of all Americans don’t have a clue what differences exist in our country and that of Cuba?

Thank God a majority, albeit a small one, still believes that hard work, productivity, and responsibility should be rewarded in our society.  The 20% who actually prefer socialism doesn’t surprise me, or worry me, but the fact that 27% are sitting on the fence leads me to believe the massive, prolonged assaults by the media, education, and entertainment industries are making real inroads that threaten to completely erode the values and principles upon which this great country was built.

On its face, socialism sounds like a grand idea…but so did Sir Thomas More’s Utopia.  “From each according to his ability, to each according to his need.”  Share and share alike, everyone has plenty and all enjoy a comfortable standard of living.  The problem–this idealistic dream is as achievable as the aforementioned dreamworld in More’s book.

The most glaring examples of its failures are the former Soviet Union and its satellites.  Many point to the socialist governments in western Europe as examples of success, but fail to point out their success has largely been due to the security provided by the US.  While they transitioned, we blocked the path of Soviet expansion into their territories.  We saved their butts twice in the last century and have maintained a military presence there ever since to prevent having to do it again.

The real weakness of Socialism, which also happens to be the greatest strength of Capitalism, is human nature.  If a man is twice as productive as his neighbor, but receives the same compensation, rarely (if ever) does the latter become more productive.  The former eventually realizes that he can be less productive and enjoy the same fruits.  So productivity is stifled, rather than encouraged.  On the other hand, when a more productive worker is rewarded, this not only maintains or improves that productivity, but in most cases encourages the less productive to strive to improve so that he can enjoy a higher standard of living.

The Soviet Union sought to overcome this weakness by forcing citizens into labor camps where they were starved, tormented, and murdered to boost productivity.  If you don’t believe this, you haven’t read Solzhenitsyn.  Only the naive believe the same can’t happen here.

Benjamin Franklin once said, “Those who would sacrifice liberty in the name of safety deserve neither liberty nor safety.”  Giving government control of private property (banks and corporations) and/or our health care system is precisely sacrificing liberty in the name of safety!  Those who want the government to take over our financial institutions should look at the stock prices of FNM and FRE since the government stepped in on their behalf.  Our government–Democrats and Republicans–encouraged, even coerced these private corporations to make bad loans, loans they knew would go bad, then seized them and blamed the free-market system when they capsized, after they refused to listen to warnings of their questionable lending practices.

The simple fact is that government can’t run companies efficiently, it can’t even run its own programs efficiently.  If you don’t believe that, you haven’t seen the National Debt Clock, which shows we’re each (every single American citizen) on the hook for over $36,000+ of government debt.

There was a time in this country when Americans took pride in making it on their own.  Now it appears only 53% of Americans fall into that category.  The others want to be taken care of, or at least be taken care of if they fail to make it as well as everyone else.  If this trend worsens, we may well slip into the abyss from which there is no return. 

The spirit that made America great is dying, supplanted by that which made Europe fall from greatness. It’s time to revive America.

April 12, 2009 Posted by | Socialism | , , , , | 2 Comments

How ’bout those bailouts?


Digg!
#TCOT #diggconsbailout1

Boy, it sure is a good thing we’re throwing tax dollars at all these poorly run private companies.  Otherwise things might really be bad!

Seriously.  How can anyone look at data that’s been released and say this march toward Socialism is helping anything?

Wall Street tumbles

Stocks slump as weak retail sales and worries about the banking sector unnerve investors.

NEW YORK (CNNMoney.com) — Stocks tumbled Wednesday morning as a surprisingly weak retail sales report and further concern about the financial sector weighed on sentiment.

The Dow Jones industrial average (INDU) lost 300 points, or 3.6%, around an hour into the session, extending its five-session losing streak. The Standard & Poor’s 500 (SPX) index lost 3.3%. The Nasdaq composite (COMP) lost 3%.

…(Read full article)


Digg!

January 14, 2009 Posted by | Economy | , , , | 1 Comment

GM sending bailout money to Korea


Digg!
#TCOT #diggcons

You would have thought General Motors CEO Rick Wagoner would have learned a little about the value of PR last November.  Flying to DC to beg for taxpayer money aboard a private jet almost cost him and the other little piggies their bailout cash.  Evidently he didn’t learn a thing.

In an announcement at Detroit’s North American International Auto Show today, Little Piggy Wagoner announced that GM would bypass an American supplier to spend our money in Korea.  The battery cells for GM’s long overdue Chevy Volt, will be purchased from LG Chem in Korea.  LG Chem and Massachussetts based A123 Systems/Continental were competing for the contract.  I wonder what Rep. Barney Frank (D-MA) thinks of the bailout now that GM is bypassing a Massachussets company and sending his constituents’ jobs overseas. 

Now, I’m a free market/free trade fan and if these were normal times I wouldn’t raise a fuss about this.  However, these aren’t normal times and last month’s auto company bailout cast off any semblance of GM operating under free market/free trade principles.

Recall, we were told the bailout of GM and Chrysler was essential to save American jobs and prevent an imminent collapse of our economy if these two went under.  In this video, Wagoner claims the bailout will “preserve many jobs, and support the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on our company and our industry.”  The following is a Bush quote from an article in the Dallas Morning News after the bailout was announced.  (emphasis added)

“By giving the auto companies a chance to restructure, we will shield the American people from a harsh economic blow at a vulnerable time,” the president said. “And we will give American workers an opportunity to show the world once again that they can meet challenges with ingenuity and determination, and emerge stronger than before.”

This would be understandable if the A123 batteries just couldn’t cut it, but that’s not the case.  GM’s vice-chairman, Bob Lutz says the A123 product was “very good.” 

That’s not the worst part.

Lutz went on to blame the US government for GM’s choice of a foreign supplier, saying Detroit isn’t the problem, Washington is.  His rationale?  The US government hasn’t spent enough money on research to develop battery technology.  He goes on saying this “is part of the penalty we pay in the U.S. for not having a well-funded R&D budget.”

Talk about biting the hand that feeds you!  Can you believe the arrogance of these jerks running GM?

They come begging from us, telling everyone that will listen the US economy is dependent on them and we must fill their coffers to save our jobs, save our economy.  Then, they have the gall to send that money overseas and tell us its our fault!

GM management still doesn’t get it.  They’re dependent on us, the US taxpayers/consumers.  This latest PR boondoggle is going to use up whatever good will the American taxpayer has for this US icon.  I’ve bought nothing but GM vehicles for the past 15 years, and now I’ll probably never buy another.

Congress shouldn’t give the idiots running GM another dime.  The only hope for this American icon’s survival is bankruptcy.  The GM Board of Directors should be ousted for leaving incompetent Little Piggy Wagoner in charge and paying him millions of dollars to lose billions of the company’s money.  Wagoner and the rest of GM’s management should be replaced with a team that understands that without customers, there’s no chance of success.


Digg!

January 13, 2009 Posted by | Economy | , , , , , , , , , , , | 5 Comments