Hey — How’s Our Investment in GM Doing, Anyway?

29 Aug

Michael Barone recently wrote an essay titled “GM Goes From Bad to Worse Despite Obama Bailout”, in which he points out the difference in thinking between Obama and conservatives regarding the success of this bailout.  It also portends what Obama will feel free to do if he is re-elected.  You can find the full essay at

http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_michael_barone/gm_goes_from_bad_to_worse_despite_obama_bailout

Mr.  Barone, senior political analyst for The Washington Examiner, is a resident fellow at the American Enterprise Institute, a Fox News Channel contributor and a co-author of The Almanac of American Politics.

Excerpts:   [Bolding is mine; content in brackets [ ] is mine]

.  .  .  .

“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. .  .  .

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 .  .  .  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 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 [the taxpayers] 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 [the taxpayers] will lose more than $25 billion if and when it sells.  .  .  .

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.

[End of excerpts]

 

 

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