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GM: Government Motors, and what it's really about
I've been waiting for a week or so now for someone to get on this topic, regardless of political ideolgy, and I'm surprised nobody has yet. So, I'll begin. And stick with this till the end because it gets at something I believe is happening in the bigger picture.
"The government has no interest in controlling General Motors". That is what The One proclaimed. But he fired the CEO, and appointed one he approved of and that the president of the United Auto Workers likes wayyy more than the last guy. As said by one columnist:
| quote: | President Obama rightly says "sacrifices" must be made if GM is to emerge as a viable company. But there's one sacrifice he won't make: his re-election chances, by leaving the fate of the UAW truly up to a bankruptcy judge.
The GM bailout has become a political operation run out of the White House. It will stay that way. Talk of UAW layoffs already disguises the fact that UAW workers are actually offered generous buyouts and early retirement -- they aren't just sent away with a last paycheck. What about Chrysler? A few weeks ago, Fiat was saying it would consider a merger if a loan from Washington was guaranteed (essentially giving a foreign company $6 billion in U.S. taxpayer funds). Now Washington is saying a loan will be forthcoming as long as Fiat does a deal. That's not an ultimatum -- that's a nod and a wink. |
http://online.wsj.com/article/SB123...ss_opinion_main
So, $14 billion in taxpayer money was wasted before the faux bankruptcy decisions here. He goes on to say the real solution to make GM viable is ridding itself of the UAW's captivity, which I agree with. An act from 1935 that created that growing monster is not relevant today... just ask non-unionized BMW, Toyota, and others who actually make a profit from their plants in the southern states.
At any rate, now the administration is lining up a new board of directors for GM. 21 members on the new "auto task force" have zero automobile experience. They are forcing out the SUV's and larger trucks. GM makes 20 cars that show a profit... 11 of them are SUV's/Trucks, while the Volt and Toyota's Prius operate at a loss. What is this REALLY about? After you read George Will's column below, I'll tell you:
GOVERNMENT vs. THE AXELS OF EVIL
| quote: | The Constitution enumerates three requirements for those who would be president (they must be natural-born citizens, at least 35 and a resident within the country for 14 years) and now the government's thrashing about in the economy imposes a fourth: Presidents must be able to speak pluperfect nonsense with a straight face, lest the country understand what the government is doing. Obfuscation serves political salvation when what the government is doing includes promising that if Chrysler will sell itself to Fiat, U.S. taxpayers will lend that Italian firm $6 billion.
Barack Obama displayed reality-denying virtuosity last week when, announcing the cashiering of General Motors' CEO, and naming his replacement, and as the government was prompting selection of a new majority of GM's board of directors, and as the government announced the next deadline for GM to submit a more satisfactory viability plan than it submitted at the last faux deadline, and as the government kept the billions flowing to tide GM over until, well, whenever, the president said: "The United States government has no interest in running GM."
Actually, his administration prefers to do that rather than allow bankruptcy to infuriate the United Auto Workers union, which was preemptively grateful to Obama's administration with lavish contributions to candidate Obama. The president supposedly showed "toughness" in sacking a conspicuous member of a particularly unpopular little cohort, CEOs of big corporations. He will need more grit if, as his administration hints, this time it is serious, that its patience is wearing thin, that someday GM could face "controlled" or "prepackaged" or "surgical" bankruptcy. One suspects that those adjectives intimate that it will be faux bankruptcy, gentle in dealing with the UAW.
Last November, five months and $17.4 billion in auto bailouts ago, this column noted: "Some opponents of bankruptcy say: GM must not be allowed to fail before it perfects batteries for its electric-powered Volt, which supposedly is a key to the company's resurrection. This vehicle was concocted to serve GM's prolonged attempt to ingratiate itself with the few hundred environmentally obsessed automotive engineers in Congress. They have already voted tax credits of up to $7,500 for purchasers of such cars -- bribes that reveal doubts about consumer enthusiasm for them at a price that would reflect cost."
In December, GM, by then a mendicant groveling before its congressional masters, ran a full-page newspaper ad apologizing for having "disappointed" everyone, vowing to stop selling so many "pickups and SUVs" (which were 11 of GM's 20 most profitable products in 2008), and promising "revolutionary new products like the Chevrolet Volt." Another ad, which appeared before December and is still running, features a car attached to an electric cord, and says the Volt amounts to "reinventing the automobile."
Last week, in an unenthralled summary of GM's "viability" plan, Obama's administration said: "GM earns a large share of its profits from high-margin trucks and SUVs, which are vulnerable to a continuing shift in consumer preference to smaller vehicles. Additionally, while the Chevy Volt holds promise, it will likely be too expensive to be commercially successful in the short term."
The stunning shift in consumer preferences that should make the White House's freshly minted auto experts feel vulnerable has been reported under headlines such as "Like a Rock: Hybrid Car Sales Plummet" (Wall Street Journal, Dec. 9) and "Hybrid Car Sales Go From 60 to 0 at Breakneck Speed" (Los Angeles Times, March 17). Absent $4 gasoline, customers, those nuisances with their insufferable preferences, do not want the vehicles the politicians want them to want, even with manufacturers now offering large rebates and other incentives.
The two best-selling vehicles in America this year are large pickup trucks (Ford F-Series and Chevy Silverado). In February, Toyota sold 13,600 Tundra and Tacoma pickups and 7,232 Priuses. It sells the Prius at a loss, which it can afford to do because it makes pots of money selling pickups. Has the Car Designer in Chief, a.k.a. the president, considered the possibility that what he calls "the cars of tomorrow" will forever be that?
His administration cannot be faulted for failing to do well what cannot be done well -- industrial policy, wherein the political class, with negligible experience in commerce, flounders. The administration can, however, be faulted for trying. The government's wallow in the automobile industry, under this and the previous administration, merits a hockey coach's evaluation of his team: "Every day you guys look worse and worse. And today you played like tomorrow." |
So... 11 of GM's 20 profitable vehicles are SUVs/trucks. The administration is desperate for us to shun them. The only way, really, to force Americans to drive the shitboxes they don't want to drive is for the gasoline prices to rise. We learned last summer that $4.00 was the tipping point to where consumers actually started cutting way back and/or buying smaller cars and hybrids. Obama himself said that he didn't mind that gas prices went that high, he just didn't like that it happened so quickly.
What's my point? I think there is little coincidence in this story that came out the other day in Investors Business Daily: "Lost In An Energy Wilderness", which says the following:
| quote: | Last Wednesday, the House of Representatives passed the Omnibus Public Land Management Act of 2009 (S.22). S.22 is a smorgasbord of 160 bills totaling more than 1,300 pages. A stimulus bill it is not, for it locks up an additional 2 million acres to the 107 million acres of federally owned wilderness areas. That total is more than the area of Montana and Wyoming combined, says Investor's Business Daily (IBD).
Speaking of Wyoming:
-Some 1.1 million of these newly restricted acres are in that state.
-This bill takes about 8.8 trillion cubic feet of natural gas and 300 million barrels of oil out of production in that state, according to the Bureau of Land Management (BLM).
-The energy resources walled off by this bill would nearly match the annual production levels of our two natural gas production states -- Texas and Alaska.
As Sen. Tom Coburn (R-Okla.) points out: "We are not suffering from a lack of wilderness areas in the United States. According to the Census Bureau, we have 106 million acres of developed land and 107 million acres of (officially declared) wilderness land."
Earlier this year, Interior Secretary Ken Salazar canceled 77 Utah oil and gas leases that had gone through seven years of studies, negotiations and land-use planning. They were rejected because temporary drilling operations might be "visible" from several national parks more than a mile away:
-Some of these parcels are in or near the Green River Formation, an oil-rich region in Colorado, Utah and Wyoming that's been called the "Persia of the West."
-This formation has the largest known oil shale deposits in the world, holding from 1.5 trillion to 1.8 trillion barrels of crude.
-The Energy Department's Argonne National Laboratory indicates 800 billion of these barrels are recoverable with current technology.
Paul Spitler of the Wilderness Society told CNSNews this is just dandy. "There are some landscapes that are simply more important for their scenic, natural, recreational and ecological values than they are for oil and gas development," he said.
You can see the sun setting on America's energy and economic future over these landscape. |
http://www.ncpa.org/sub/dpd/index.php?Article_ID=17803
We also know the democrats are opposed to new offshore drilling. Won't that plus the realization of all this energy rich land being stealthly locked up make us MORE dependant on foreign oil? The price of oil/gas will go way up again soon, and.... wait for it.... BAM! The market for these smaller cars the administration wants to force us to drive, that American's obviously don't want to drive, will now exist.
| quote: | Now that Obama's going to be running the car companies, energy policy just got a lot clearer.
These things work hand in hand, taking over automobiles, denigrating trucks and SUVs, demanding new clean energy, setting natural energy resources off-limits raises the price of energy, the price of energy forces the American people to make cheaper alternatives, that means smaller cars, yada yada yada.
So we're going to have higher gasoline prices, and it isn't going to be long, lock in your bet on that. And what will it mean? Big Oil is going to get the blame. More anger and hatred directed at the oil companies because nobody's going to know about this omnibus land grab bill that came out of the House and Senate last week. Because the media is derelict in telling people what's going on in their own government. |
Last edited by The17sss on Apr-06-2009 at 02:55
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