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

“We Don’t Want Government to Run Companies”

Posted December 9th, 2008 at 9.05am in Entrepreneurship.

This Sunday on Meet the Press, President-elect Barack Obama told Tom Brokaw, “We we don’t want government to run companies. Generally, government historically hasn’t done that very well.” Obama is right on both counts: government has a miserable record as a corporate manager and therefore we should not want them to be in the business of doing so. Unfortunately that is exactly what liberals in Congress are about to do if their proposed auto bailout plan passes. Under the latest plan to come out of Speaker Nancy Pelosi’s (D-CA) office Congress “would mandate, or at least heavily influence, what kind of cars companies make, what mileage and environmental standards they must meet and what large investments they are permitted to make.” Yale management professor Jeffrey Garten told the New York Times: …

Full Article at the Foundry

Write your elected officials (links on right side of this page) and tell them we don’t want this bailout!

December 9, 2008 Posted by | Bailout, Economy | , , , , , | Leave a comment

I Hope I’m Wrong.

I’ve been dreading this night for weeks now…the night Americans chose Obama. I hope I’m wrong about what I expect Obama’s “change” will mean for our country…for my kids’ sake, and their kids’, and theirs.

I understand how this happened and lay 100% of the blame on George W. Bush and the leadership of the Republican Party. Unlike most of those who voted for Obama though, I believe GW and the GOP created this potential nightmare by abandoning their principles in an effort to win the approval of their political foes. In other words, they weren’t conservative enough.

I agreed with many of Bush’s policies in the beginning and voted for him in both 2000 and 2004. I had been a registered Republican since age 18 and remain a staunch conservative to this day. His tax cuts had the intended effect–tax revenues have increased and the economy grew even after the historic attack on 9/11/2001. Where he failed was refusing to stand firm in demanding spending cuts and to curtail the growth of government.

I supported the Iraq war–not because I thought there were WMD’s (I didn’t know or care if these existed,) but because we needed to show the world that consequences would follow any attack on our country. Most don’t remember now, but Bush could have ordered the invasion of China immediately after 9/11 and the country would have been behind him. We were damned angry and sought revenge. Saddam Hussein was the international bad guy at the time and that made him the natural target for said revenge.

I always believed the WMD’s were simply an excuse used in the hope of getting international support for the war. His goal wasn’t to mislead the American people, he didn’t need to. At the time, Americans would have supported the assault for no other reason than we had been attacked and a response was called for, a response that would make others hesitant to participate in any such attack in the future. His mistake was dragging it out in the futile effort to convince France, China, and Russia to support us. As these efforts dragged on, public support for the attack waned. By the time we finally invaded, the country was divided on whether or not it was necessary. He had lost support before the first American boot set foot on Iraqi soil.

The lightning fast capture of Iraq recaptured some of the lost support, but not all. The apparent victory made the war popular again. All he had to do was sew up the victory and the mission would be accomplished. He screwed up though, again attempting to bring reluctant members of the UN around to support the US occupation. Instead of letting our troops finish the fight, we pulled up and dug in before we’d made sure the job was finished. Instead of flushing the enemy out of hiding, we allowed him time to recuperate and reorganize. When the insurgency began, we tied the hands of our soldiers and Marines rather than let them take the fight to the enemy and destroy him once and for all. After all, we couldn’t take the chance of offending Muslims by damaging a mosque and we couldn’t risk upsetting those who already despised us with collateral damage.

Marines and soldiers came home in chains to face charges for attempting to actually win the war. We were sacrificing our men and women to appease the rest of the world. I watched in disbelief when Marines surrounding Fallujah were forced to wait until the enemy fired before firing on them. The rules of engagement made it impossible to win! Watching news footage of patrols being hit by IED’s, I told my wife exactly what could be done to minimize our casualties but these actions weren’t permitted because of the ROE’s. The result–instead of the world being afraid of pissing us off, we’re once again considered a paper tiger!

Bush came to office claiming to be a “compassionate conservative.” This moniker is evidence he felt the need to move toward the democrats. In fact, he too claimed to seek unity in the country. What he failed to understand was the only unity the liberals sought was total acquiescence to their philosophy. They fought tooth and nail while they labeled him a radical right winger. Instead of taking the fight to them, he and the GOP tried to appease them while they continued to attack through the press and by opposing Republican initiatives. As Bush moved toward the center to counter, liberals in Congress and the press continued to attack him as being too far to the right. His retreat toward the left allowed the front line to shift so that now what’s considered the center is actually well inside the home field of the left!

Tonight’s results are the effects of Bush’s appeasement policies. Had he fought harder and stood firm in his first term, the “radical right” tag would never have stuck to him in the second. Had he allowed our soldiers and Marines to wage a war they could win, the war would still have been popular. If the Republican Party is to recover from this crushing defeat, it must get back to its roots and stop trying to win over the radical left and the biased liberal media.

I’m going to use this blog to document Obama’s “changes” to our country. His remarks and those of his supporters lead me to believe we’re on board a runaway train headed straight for Marxism. I envision irresponsibility being rewarded and responsible persons forced to pay for those rewards. Our way of life hangs in the balance and I fear the scale will be irreversibly tilted in the wrong direction.

I could be wrong though, and I hope that I am. The next four years will tell the tale.

November 4, 2008 Posted by | Election 2008, Obama | , , , | 1 Comment