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 just heard Biden today. He said something like “I have a bumper sticker for you: Osama is dead and GM is alive.”
They may want to stop the presses on that one for a while. ;-)
“Supporting Investment” is Orwellian double-speak for “Government Takeover” of more private industry
Yes, Obama wants to bring his world view of justice to America. America must be brought down and the third world, particularly the Muslim world, must be raised on the bones of the West. Obama constantly lies and deceives, but he despises America and is trying to end it.
GM pissed me off when they discontinued the 8.1 Vortec engine under pressure from certain groups that it was too much engine for the peasants. I have a 2002 Silverado dually with it, an amazingly powerful reliable engine, originally designed as a marine engine. And yes its s fuel drunkard.
Because of Gm’s financial problems they won’t be coming out with any new aids or tech on their vehicle lineup, same old stuff as before.
I want my money back..GM is a UNION slush fund.
GM is failing because they should have aggressively reduced themselves to Cadillac, Chevrolet, GMC Trucks and Opel/Vauxhall and unified their product line just like what Ford—and GM should have implemented this plan back in 2009.
Can someone explain THAT one to me ???
Leni
Subsidizing failure and sloth is never a good idea.
The Law of Nature strikes again.
If Romney wins, he should just pull the plug. Let the unions die.
GM, like all American branded automakers, never sold that many cars to Democrats. Now they’re not selling cars to any self-respecting Republicans, either. Double whammy.
I have to call BS on this...
I work for an automotive equipment supplier..
I have not been this busy in my whole time in this industry..
and gm is leading the way, they are upgrading every single plant..
I think part of this was during the bankruptcy they went “garbage picking” in the old plants and took equipment to the plants that remained open...
all of that equipment was old to start with, and now it is worn out...
I have walked into plants and seen equipment roped off and shut down to pedestrian and vehicle traffic because it is so old and worn out it is now hazardous..
they have no choice but to spend money now, so they must have it if they are spending it...
BUT! CNN Says this is a good thing:
http://money.cnn.com/2011/07/21/autos/chrysler_bailout_costs_gains/index.htm
:/
You’d think GM, supposedly a company conceived in the crucible of capitalism, would have realized the FAIL in going socialist.
Is anyone really surprised at his?
My guess? Eventually rebadge Opel's to Euro_Chevy's and hope to get soccer fans to but them across the pond.
Knowing what I know about auto design cycles and their cost, that is a hellofa lotta money for a major new design or refreshes on "x" number of others. Not money well spent IMHO....
http://www.freerepublic.com/focus/news/2921737/posts?page=32#32
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