Only in 2011 United States, could a sitting President spin a 14 billion dollar loss as a success. Never mind that it was the result of favoritism, poor policies, and illegal maneuvers. President Obama traveled to Toledo today touting the success of the auto bailouts of GM and Chrysler as having saved 1 million jobs. The Obama administration admitted on Wednesday the government will lose roughly $14 billion in taxpayer money from the $80 billion dollar bailout of Chrysler and GM in 2009. When GM bragged about paying back a little more than half of the money owed, they left out the fact that they took it from one government pocket and put it in another. Read the details: Shell Game Explained Here
Remember when CEO Ed Woody blatantly lied in this TV ad?
The Competitive Enterprise Institute, pouring over Treasury Department documents, said the administration had a “cozy PR relationship” with GM at the time these campaign ads were running with their false claims. “One year ago, the US Treasury Department aided General Motors in its fraudulent claim that it fully repaid its government loans,” said Sam Kazman, CEI General Counsel. “Now the Treasury Department is re-enacting this smoke-and-mirrors routine on behalf of Chrysler,” said Kazman. “Whatever the bailouts may be credited with creating, honesty isn’t one of them.” Read here: Lying snakes
What about the closed dealership owners and employees? There is some evidence that conservative donors were targeted. It could be that Chrysler dealers tend to be conservative. In any case, there was no transparency about how dealerships were chosen. The employees of those dealerships lost their jobs and they are not in the jobs equation the President talked about today. The dealers were given a few weeks to close and if they didn’t sell their millions in merchandise, Chrysler went after it. The government took no responsibility for what they had done and Chrysler claimed it was Fiat’s fault. Read here: Republicans lost dealerships
A Federal Report was highly critical of this administration’s handling of the closed dealerships. “Job losses at terminated dealerships were apparently not a substantial factor in the Auto Team’s consideration of the dealership termination issue,” declared the audit of the $787 billion TARP program prepared by auditor Neil Barofsky. But, it continued, “The fact that Treasury was acting in part as an investor in GM and Chrysler does not insulate Treasury from its responsibility to the broader economy.” Read here: The administration failed to consider the loss of jobs and impact on communities when closing dealerships
And what about the investors? This is a capitalist country (or it was pre-Obama) and there is a legal relationship between the investor and investment enterprise. If the company goes under, the investor gets paid first. The President violated the law unscathed and put his union friends at the front of the line, betraying the investors. The government took control of a private company instead of maintaining its role as referee. He even put Canadians ahead of U.S. investors. Read here: The government betraying investors
Let’s not forget the “cash for clunkers” which destroyed a lot of used cars and passed more taxpayer dollars from one hand to the other in a redistributive kind of way.
Thousands of accident victims fell victim to the bailout. Their claims were erased, though many had fought for years.The $50 billion rescue of GM and the restructuring of Chrysler allowed them to “wash away legal responsibility for car-accident victims who had won damages or had pending lawsuits,” reports the Wall Street Journal. Read here: Car accident victims lose rights under the bailout.
One of the reasons Chrysler had a good month in May (GM’s was soso) was because of their fire sales. Overall, car sales are 34% lower than last year – wow, rousing success. The Japanese makers are suffering losses due to the earthquake and Tsunami as expected. Read here: Fire sales gave auto sales a better month-that’s temporary
Fiat will own 40% of Chrysler – not sure that’s a good thing. I know one thing, we were told we had to save the U.S. car companies and Fiat is Italian. In addition, back in the 80’s, Fiats in the U.S. were cute cars known for their unreliability. Fiat jokes were my favorites. Here’s one – How do you get a Fiat to go 60 miles an hour? Just push it over a cliff. Or how about – How do you get spare parts for a Fiat? Just follow another one around.
If this marvelous success story isn’t enough, the very same people whose company-killing benefits and legacy costs helped destroy GM and Chrysler are now demanding seats on their boards. That is a great idea – like putting the fox in charge of the hen house. Read here: Give the greedy ones control
If gas keeps rising, we won’t be able to afford to drive the cars anyway. The U.S. government is doing their share to help the auto industry in another way. Limos owned by the U.S. government rose by 73% during the first two years of Obama’s administration.