Tag Archives: General Motors

Government Motors & Close Enough for Government Work

GM revolving workshopTimes have been tough at Government Motors. For a while there it looked like both Osama and GM were going to be dead after encountering the Obama regime. Just recently GM announced the recall of 8,200,000 vehicles over problems with faulty ignition switches. When added to earlier North American recalls, the total for 2014 is an astounding 29,000,000 cars and trucks.

This is almost three times the 9,710,000 vehicles GM managed to sell in 2013.

At this rate soon the only place to find GM cars will be in transportation museums. Total expenses so far for this year’s recall are $2.5 billion. So far the recalls have burned up almost two–thirds of the last year’s $3.8 billion profit. One or two more recalls and GM CEO Mary Barra will be waiting outside the Oval Office for another bail out.

But enough about GM, customers are being hit hard, too. It’s been decades since owning a Detroit car meant joint custody with the dealership’s service department. Buyers are accustomed to having their cars waiting in the driveway and not parked in the diagnostic center like a preemie, with various techs hovering about the machinery while anxious parents await a verdict.

That’s why I was encouraged to learn that GM intends to radically reshape the ownership experience so it will reflect modern Detroit manufacturing reality. Establishing realistic expectations on the part of the customer — expectations that GM knows it can meet or exceed — is an important part of reestablishing credibility with customers.

Details won’t be announced until next month, but a source inside the company has leaked this news release to me and I’ve pasted it below, with a few redactions for the sake of privacy.

 

 

EMBARGOED UNTIL AUGUST 1, 2014

Contact: XXXXXXX XXXXXXXXX

General Motors Media Relations Office

XXX–XXX–XXXX or email [email protected]

 

General Motors Announces New Foster Car™ Model for Automobile Ownership

(Detroit, MI) General Motors Chief Executive Officer Mary Barra announced today that GM is breaking away from the restrictive ‘ownership’ model of automobile sales and will instead establish a more ‘open’ customer/manufacturer relationship based on the foster care model.

“The recalls of the past few months have been hard on both General Motors and our loyal customer base,” Ms. Barra explained. “The tearful goodbyes as customers deliver their beloved GM products to the service bay, or watch as one of our GM Neighborhood Recall flatbed trucks loads the auto, are emotionally wrenching for both our loyal owners and GM service personnel.

“To say nothing of the occasional hurried calls to 9–1–1 as emotions got the best of some of our more impassioned customers. What’s more, the expenses associated with a nationwide network of grief counselors was becoming burdensome and has a sharp impact on the bottom line.

“That’s why I’m proud to announce today that General Motors is breaking the mold and instituting a new ‘Foster Car’ ™ program that will still provide mostly reliable GM transportation without the emotional commitment of actual ownership.”

In practice the only difference families will notice between foster care of a child and foster care of a car will be that instead of the government paying you to take the child into your home, the family will pay GM a monthly fee to have the car in their garage.

Foster care families are always aware that fostering a child is a temporary situation that can spiral out of control on very short notice, much like the ownership experience with a General Motors product. And the relationship is always subject to rapidly changing government rules and obscure regulations, unevenly enforced by bored bureaucrats.

Foster Car ™will be almost the same. Foster families will only pay GM during those months when they have full possession of the automobile. During a recall there will be no charge and when the car or truck is upgraded to generally prevailing government standards, it will be returned with a full tank of gas. *

Foster Car ™ will differ from a lease in that there is no specified duration for the arrangement. Variables regarding whether or not any one vehicle model will be recalled, how many times it will be recalled and when a Foster Car ™family will want a new vehicle are simply impossible to predict. This flexible model will also prevent families from forming an unnaturally strong bond with the vehicle.

R. E. Call, Vice President of Engineering, believes the Foster Car ™to be a forward–thinking response to GM manufacturing realities, “In the past we’ve avoided large recalls. We felt the tradeoff between inconveniencing millions of owners just to prevent something bad happening to an unlucky few, simply wasn’t worth it.”

That policy has been changed under CEO Barra.

For the customers who still own GM vehicles outright and are waiting for their number in the latest recall drive to come up, Call suggests taking precautions to make sure their ignition switch does not spontaneously shut down. He recommends drivers remove any extra weight from the key ring holding the ignition key. This includes charms, lucky coins, rings, flashlights, small knives, beer–bottle openers and key tags with barcodes.

GM recognizes that removing these items will leave the vast majority of Americans unable to take advantage of frequent buyer programs or identify themselves at grocery stores, drug stores, public libraries and bagel emporiums, but ‘Safety First!’™ is now a byword at General Motors.

*Customers participating in the program are cautioned to remove all personal items from a recalled vehicle. Due to the increasing size of GM recalls, the company does not commit to returning the same vehicle that was sent back.

Public Opinion: Ford up – GM, Chysler down after Obama bailout

Survey results released on Sunday from Rasmussen Reports shows that the bailout of GM and Chrysler has left the bailed-out with a poor public image while Ford, the only major American car maker not to take public money, is enjoying rising popularity.

When 1,000 people were asked if they viewed each of the car makers as very favorable, somewhat favorable, somewhat unfavorable or very unfavorable, Ford came out strong.

44% of respondents said they looked favorably upon Ford, while only 12% and 13% said the same of Chrysler and GM respectively. When looking at all positive responses, 78% of responses were positive for Ford, 54% for GM and 43% for Chrysler.

The unfavorables are equally as enlightening. Ford saw only 13% unfavorable ratings, GM 45% and Chrysler 43%.

The assumption would be that the bailouts hurt the car companies that took them, but why work from assumption? The survey then asked respondents how the bailouts affect their impressions of the big three.

The President and V.P. have been out campaigning hard on the auto bailout. On Sunday the President used his weekly address to remind Americans that it was a major achievement. 55% of respondents said that the bailouts were a bad idea. 57% said it made them more likely to buy a Ford and 52% said it made them less likely to buy a car from GM. 17% said they knew someone that bought a Ford simply because the automaker did not take tax payer money to weather the recession.

Perhaps the auto bailout is not something the President should be touting so loudly.

Ford Tops Car Rankings While Obama’s GM Takes Hit

SANTA MONICA, Calif., April 18, 2012 /PRNewswire/ — TrueCar.com, the authority in new car pricing, trends and forecasting released its Performance Scorecards for automotive manufacturers and brands. The Performance Scorecards grade each manufacturer and brand on eight different measurements including pricing, sales, incentives, customer loyalty, market share and days in inventory.

Overall, the top manufacturers on the Scorecards in March were Hyundai, BMW, and Ford. Near the bottom of the list were Mazda, Jaguar, and Smart. The brands that received the highest grades were Hyundai, Scion, Kia, and BMW. The brands with the lowest grades were Mazda, Jaguar, and Smart.

The manufacturers with the largest gains, from February 2012 to March 2012 were:

  • Mitsubishi moved from a C to a B
  • Ford moved from a A- to an A+
  • Jaguar Land Rover moved from a B to a B+
  • Subaru moved from a B- to a B
  • Toyota moved from a B- to a B+
  • Daimler moved from a C+ to a B

The manufacturers with the steepest declines, from February 2012 to March 2012 were:

  • GM moved from an A to a C+
  • Honda moved from a B+ to a C
  • BMW moved from an A to a B-
  • Suzuki moved from a B- to a C-

Below are the highest and lowest manufacturer and brand rankings by TrueCar.com:

Highest Grades by Manufacturer Lowest Grades by Manufacturer
Rank Manufacturer Grade Rank Manufacturer Grade
1 Ford A+ 1 Mazda D+
2 Hyundai A 2 Suzuki C-
3 Jaguar Land Rover A 3(tie) Honda/Volvo C
Highest Grades by Brand Lowest Grades by Brand
Rank Brand Grade Rank
1 (tie) Hyundai A+ 1 Smart D-
1 (tie) Ford A+ 2 (tie) Infiniti D
2 (tie) Land Rover A 2 (tie) Mazda D
2 (tie) Scion A 3 (tie) Suzuki D+
2 (tie) Dodge  A 3 (tie) GMC D+
 3 (tie) Acura D+

Media Pushing False GM Success Story to Reelect Obama

   ***In living memory of conservative truth-teller Andrew Breitbart who passed away last week at 43 years of age. Andrew dedicated his life to exposing the Liberal media complex, and their constant refusal to tell the truth, the whole truth and nothing but the truth. This one’s for you Andrew. Godspeed.***

President Obama has made the GM “success story” a huge part of his reelection campaign of 2012. This false narrative about General Motor’s “record profits” has been constantly inserted into the numerous campaign speeches and fundraisers Obama has been on recently, always under the guise of them being policy speeches. Another fact that needs to be reported, is that these “policy speeches” are nothing more than [taxpayer-funded] reelect Obama pep rallies and campaign tours. Doesn’t America have a legislative body known as the U.S. Congress that is supposed to stop the illegal usage of tax dollars for reelection campaign operations? Congress idly sits by and remains silent, while Americans are bombarded daily with reelect Barack Obama speeches largely paid for by the taxpayer, and parroted on national television by his pals in the media. Stop the nonsense Mr.President, and pay for your own reelection campaign tour.

As far as the recent media bombardment of television replays of Obama campaign speeches trumpeting him as the great savior behind General Motor’s [supposed] record profits of 2011, let’s not forget that it was G.W.Bush and the Democratically-controlled Congress of 2008 who started the big government graft package to the UAW, also known as the auto bailouts. Barack Obama simply took advantage of this already-in-place big government fraud to further enrich his bed-pals over at the UAW in exchange for their campaign support. The false claims about the GM success story of 2011 contains many fallacies, all of which are being pumped out daily by the Liberal media complex to enhance Barack Obama’s reelection image: (emphasis added)

First off we see the Detroit News claiming that GM retook the stage as world’s largest auto maker in 2011. It didn’t take long for this fairy tale to be debunked, as we see from Motor Trend Mag. and the CEO of Volkswagen:

Now Volkswagen is disputing the claims and suggesting that it bested GM last year. According to Automotive News, Volkswagen’s 8.16-million figure doesn’t include sales from commercial truck divisions MAN and Scania. Once those figures are added, it will significantly bolster VW’s annual sales tally.

On top of that, GM’s sales figure was padded with about one million sales by Chinese automakers SAIC Motor Corp. and Wuling Motors Co. — companies with which GM has joint ventures, but in which the American company does not have a controlling stake. If those sales were excluded and VW’s truck figures added, Volkswagen would probably steal the global sales crown from GM.

President Obama should have enough political advisers and speechwriters researching that already-discredited claim, one which he shouldn’t have made in the first place, let alone keep on the repeating that kind of tripe to bolster his image. Yet it makes Obama look good, so expect him to keep on parroting that myth here in 2012. Obviously, the truth does not matter to Obama and his political operatives in the media, especially when there is a reelection campaign to run.

Next we see that “Millions of jobs were created or saved”  due to the taxpayer graft and abuse more widely known as the auto bailouts, which we constantly hear Obama claim  in numerous campaign speeches. What about GM laying off 70% of its employees at a Detroit plant recently, all of whom had just came off an extended layoff posing as a “Christmas break?” Warren Beatty explains The Never Ending Chevy Volt Saga:

“General Motors (GM), or Government Motors, announced on Friday, March 2, 2012, that it will suspend Chevrolet Volt production for five weeks to “align production with demand.” GM told 1,300 employees at its Detroit Hamtramck production facility that they will be temporarily laid off from March 19 to April 23, as the company halts production of the Chevrolet Volt and its European counterpart, the Opel Ampera. The plant had resumed production on February 6, 2012, after a prolonged Christmas holiday shutdown.”

Not only has the UAW [that now controls GM] been voraciously feeding at the taxpayer-funded TARP-trough, GM has also sucked down millions of tax dollars through the D.O.E. green energy programs. The Chevy Volt scam should be filed under double-dipping taxpayer abuse 101, while also being cross-filed under massive-taxpayer-funded green-energy-failures, right next to the green-cars-for-the-rich-Obama-supporters file. Taxpayers were subsidizing the Chevy Volt fireball-waiting-to-happen junker at the rate of $7500.00 per unit sold in 2011. In Obama’s latest Chevy Volt scam, he has asked the taxpayers to pay for an even bigger subsidy for the Chevy Volt: A whopping $10,000.00 dollars a pop! ( in his latest proposed budget for 2013) The Obama media complex was on TV last weekend blaming the Chevy Volt failure on… wait for it… bad publicity. Yet yesterday, a GM spokesman and Obama-puppet announced that one of the reasons the Volt plant workers were laid off is to “retool” the plant, which includes improvements to rebuild the battery cooling system in the Volt to prevent people from being burned alive while in it, or having their homes burned down while charging it. Which lie are the people supposed to believe there?

GM made $9 billion in 2011; how much did they pay in their fair share taxes? ZERO. See this Harvard law School Forum paper, on how Obama’s favorite tax evasion felon, and current treasury secretary, Tim Geithner gave GM and the UAW a $45 billion dollar tax break, which results in them being exempt from paying their fair share of taxes for about a decade or longer. Take away GM’s taxpayer-funded subsidies and illegal tax exemptions, and lo and behold the great reelect Obama GM success story is proven to be more in line with Marxist propaganda designed to fool the masses, as opposed to any form of truth-telling and government transparency. When is the last time anyone [ if ever] saw the mainstream media report on GM’s illegal tax exemption of $45 billion?  The Liberal Media Complex refuses to tell the truth as far as the GM refusing to pay their fair share in taxes-driven success story goes, and this mandate comes right down from the White House to the media to protect Obama and enhance his reelection chances.

Finally, as American’s watch President Obamacontinue to boast about GM’s “record profits”, ( while paying zero taxes) we see this from Ed Morrissey: Great news: Le Bailoutte de Peugeot avec Le US Taxpayer Francs, in which we see that GM buying stock in another failing car company, Peugeot of France, and one which was reduced to junk bond status the day after the “purchase.”

So how did that work out?  About as well as you’d imagine.  As soon as GM had some cash, it decided to invest it — in another car company whose bonds had achieved le junk status:

Attention U.S. taxpayers:  You now own a piece of a French car company that is drowning in red ink.

That’s right.  In a move little noticed outside of the business pages, General Motors last week bought more than $400 million in shares of PSA Peugeot Citroen – a 7 percent stake in the company. …

Peugeot can undoubtedly use the cash.  Last year, Peugeot’s auto making division lost $123 million.  And on March 1 – just a day after the deal with GM was announced – Moody’s downgraded Peugeot’s credit rating to junk status with a negative outlook, citing “severe deterioration” of its finances.

In other words, General Motors essentially just dumped more than $400 million of taxpayer assets on junk bonds.

What really proves the point that the mainstream media is promoting the reelection of Barack Obama through parroting the phony GM success story, is the fact that exactly zero major news networks have reported on GM’s recent purchase of 7% of Peugeot, and the subsequent downgrade to junk bond status the day after GM pumped $400 million bucks into the company.  ABC did report one troubling aspect of Government Motors purchasing another in-the-red car company, which is quite telling on it’s own:

ABC’s Jonathan Karl notes that while GM bought a big stake in Peugeot, the Peugeot family had an opportunity to buy a stake in GM.  They passed on that “opportunity,” which just proves that the Peugeot family is smarter than GM.

And Barack Obama is betting that America will be gullible enough to believe his media operatives fairy tale narrative on the great GM Success Story of 2012, and reward him with four more years in office, and to prove how well the Liberal media complex has sold this GM success-charade to the masses. As  the uber-courageous truth-teller and unabashed conservative, Andrew Breitbart would ask America: “Who are you going to believe when you go to the polls in 2012 to pick the next President of the United States, the Liberal media complex… or the truth contained herein concerning the big GM success lie of 2012?

 

 

 

 

 

 

 

 

 

 

 

 

Is General Motors Truly Back on Top of Auto World?

General Motors Corporation recently laid claim to being the world’s largest automaker, as headlined in The Detroit News  last month.  “General Motors Co. says it sold more than 9 million cars and trucks worldwide last year — a 7.6 percent increase that allowed the company to reclaim the title of world’s largest automaker.” After GM posted it’s profits and sales figures boasting of reclaiming to be the world’s largest automaker, German manufacturer Volkswagon released a statement saying that when trucks are added into the equation, that Volkswagon, not GM took over the title as largest automaker in the world.  Also of note is the fact that the massive earthquake and subsequent tsunami that struck Japan last march disrupted Toyota’s manufacturing and distribution systems, and after Toyota was back up to speed, flooding in Thailand forced key parts suppliers to suspend shipments, opening the door for other manufacturers to overtake Toyota’s title of world’s top automaker that it had held since overtaking GM in 2008.

Motor Trend published Volkswagon’s claims as follows: (emphasis added)

Now Volkswagen is disputing the claims and suggesting that it bested GM last  year. According to Automotive News, Volkswagen’s 8.16-million figure  doesn’t include sales from commercial  truck divisions MAN and Scania. Once those figures are added, it will  significantly bolster VW’s annual sales tally.

On top of that, GM’s sales figure was padded with about one million sales by  Chinese automakers SAIC Motor Corp. and Wuling Motors Co. — companies with which  GM has joint ventures, but in which the American company does not have a  controlling stake. If those sales were excluded and VW’s truck figures added,  Volkswagen would probably steal the global sales crown from GM.

2011 Automotive Company U.S. sales  fast facts:

GM- U.S. sales rose by 13% over 2010 numbers,  while Volkswagon’s U.S. sales rose by 23.3%.  Chrysler sales rose by 26%, and Ford’s sales rose by 11% over 2010. Imports BMW and Merceces Benz were also up 13%,  according to KHSLTV.

GM’s Chevy volt sales took a nosedive from  previously reported anemic sales due to the reports of the car exploding in a fireball during testing. GM sold 7700 Volts in 2011 and only 603 volts were sold in Jan. 2012. This was well short of stated goals of 10,000 in 2011 and has forced GM to walk back there stated goal of selling 45,000 Volts in 2012.

Due to under-performing GM stock prices, the U.S. taxpayer is currently estimated to be on the hook for almost $24 billion dollars in losses.

GM Avoids Paying Taxes on Profits thanks to Obama and Geitner adding illegal exemptions into TARP deal. Pay-to-Play 101.

GM to date has not mentioned the total of $45 billion dollars in tax write-offs given to them in the Obama/Geitner TARP deal. The Harvard Law School Forum  published the following little-know facts  about GM’s deal:

New GM has the factories, offices, designs and some of the workers that Old GM had. It also acquired some $18 billion worth of its NOLs (the losses themselves were $45 billion). It could not use them to reduce its corporate income tax liability immediately – it earned no income against which to apply them. But in 2010 New GM did finally turn a profit. Presumably, it will now start using its NOL’s (net operating losses) to avoid its corporate tax. (emphasis added)

The problem lies within certain “notices” written by the Treasury where GM/U.S. Treasury will not have to abide by  tax laws that other companies who sell stock do.

To solve this problem, the Treasury issued a series of “Notices.” The Sec. 382 rules, it declared, simply did not apply to itself. When it sold its shares in New GM, its buyers might increase their ownership stake by 50 percentage points, but they would not trigger the Sec. 382 limits. The tax code offered no exception for government-owned shares, and the Treasury did not purport to find one. Instead, it just declared that the law did not apply. Treasury issued several similar “Notices” for AIG and Citigroup. Through the TARP transactions, both of these firms experienced ownership changes over 50%. By law, they lost their NOLs. By “Notice,” the Treasury announced that it would let them keep the losses. (that allows GM and the Obama-supporting UAW, to avoid paying approx. $45 billion dollars in taxes.)

In an article titled  Can the Treasury Exempt its Own Companies from Tax? The $45 Billion GM NOL Carryforward, the author of the above-linked report worked with Eric B.Rasmussan to expose just how the U.S. Treasury and the Obama administration illegally gave the GM Unions tax exempt status as the GM bailout moved forward: (emphasis added for clarity)

 We do not address the wisdom of the bailouts. Neither do we ask whether giving a multi-billion-dollar tax break to an automobile or financial company makes sense. Instead, we focus on the propriety of the Treasury’s manufacturing a tax break. We find two aspects of the transaction especially troubling:

  • a. The GM Notice transfers a large amount of money to one of the largest contributors to the administration’s party, the UAW. The UAW was merely an unsecured creditor to GM – yet through the reorganization it emerged with a much larger equity stake than its interest warranted. Through this Notice, the government now transferred vast sums of money to it.

 

  • b. The GM Notice hides the real cost of the TARP bailout. Involving as it does very complex provisions of the corporate tax code, the Notice escapes virtually all public scrutiny. Yet at root it cuts the firm’s future taxable income by $45 billion. The true total cost of the TARP transactions does not involve only the direct outlay; it also includes the $45 billion in future income that the Treasury freed from tax.

Finally the report further states that in order to avoid public outcry about the huge transfer of cash to the Obama-supporting UAW, they did it through a legally unauthorized exemption.

Had the administration given such a large amount of cash to the UAW, the public would have complained massively. The administration gave it through a legally unauthorized Sec. 382 exemption, and no one noticed.

We conclude the article by exploring procedural reforms Congress might adopt to prevent a recurrence of what happened with GM. We urge it to give legislators standing to contest in court any tax benefits that the Treasury provides.

Understanding these truths about how the Obama administration and the Treasury have transferred billions of taxpayer dollars to the crony-capitalists at GM and the UAW also debunks the rosy picture the media is painting about GM’s current boasting of a planned $10 billion dollars in profits in 2012. The stock held by the U.S. Treasury, bought and paid for with tax dollars is currently worth about half of what it needs to be to break even and recuperate the bailout cash. When Obama and the Liberal Democrats preach about evil corporations and successful business owners not paying their fair share of taxes today, they somehow refuse to mention GM and their $45 billion-dollar tax  exemption gift that was given to them as a down-payment for the United Auto Workers reelect Obama 2012 campaign.

Footnotes: Do Americans want four more years of  these types of taxpayer abuse and Liberal crony-capitalism? Barack Obama claims to have saved a million autoworker jobs while refusing to discuss how much it cost the taxpayer in real-time total dollars. While Obama-supporting Union workers at GM rake in record salaries and benefits, along with huge bonuses, the rest of America is stuck dealing with skyrocketing energy prices and an overall massive increase in the cost of everyday necessities, while the average wage increase for 2011 was a measly 1.9%, according to this BLS report.  Unemployment is still  stubbornly high , and now the Obama-led Democrats want to hand out another extension of  an already record high time limit of federal U/E benefits at taxpayer expense. America is being systemically collapsed under the weight of trillions of dollars in debt, and now we will soon see Obama and company raise the debt limit another trillion-plus dollars. The big news last week was that GM is the “largest” automaker in the world, (which is debunked here) and the “new GM success” is being used to promote Obama’s reelection. Had Ford Motor Company got a $45 billion-dollar tax exemption, ( like GM)  their profits would in fact, surpass GM’s 2011 earnings by tens of billions od dollars.  It is about time the American people demand an end to big corporations such as GM being allowed to steal billions of taxpayer dollars in order to give them to reelect Obama cronies and assorted union bed-pals. That starts with defeating Barack Obama in 2012.

Father Government: Federalizing Childcare

Even though she was evicted from her position as Speaker of the House, Rep. Nancy Pelosi (D-Calif) is still trying to tell us how to run our own houses. Her latest frightful commitment to the American people is that if the Democrats are re-elected in 2012 “we will do to childcare what we did to healthcare.” As if that’s a good thing.

The list of all that could go wrong in a country that provides free childcare is lengthy, but modeling such a program after Obamacare would be even more disastrous. Imagine a world where all parents are mandated to go back to work after having children, where it would be criminal to stay at home and raise your child yourself. Sounds a little like a piece of dystopian literature, doesn’t it?

This is not a new idea for Democrats. In fact, it’s one that began a very long time ago with free government education. K-12 morphed into government-funded pre-K programs, and now has evolved into the government wanting unfettered access to the minds of our children from birth. The Democrats, especially, want to indoctrinate our children to believe that Government is the true parent of all people in this country.

The concept of free “public” (read: government-funded) education for all originates in the famed Marxist document, the Manifesto of the Communist Party. This should raise the first flag. The Manifesto further decries one of its basic tenets as, “Abolition of the family!” Isn’t that precisely what the Democrats are working towards with the latest anti-family idea? On merit, yes, it is a better idea to have an educated population than an uneducated one. As an educator by trade, I cannot dispute that intellectual fact. I challenge the notion, however, that the government should be in charge of it. Competition drives excellence, and government control of anything quells competition.

Practically, free childcare for all does seem to fill a need that exists for all parents. This is where it is likely to gain public support. It’s not easy to make the decision to spend $1,000 a month from a $2,000 paycheck (after federal taxes, of course) for someone to keep our children all day while we work. For many, the financial equation just doesn’t make sense. As a result, many choose to forgo their career for a while and stay home with their children, and they make financial sacrifices until their children are school-aged. Others choose to stay home and raise their young children because they actually want to.

I know it may surprise some on the left, but there are people who have children because they actually planned a two-parent family and want to nourish that family by doing the hard work themselves. They want to work hard to provide for their spouse and children. They want to choose the best pediatricians to treat their babies when they’re sick. They want to save money and build a nest-egg that can be passed on to their children and grandchildren. They want to build a family business, despite the fact that it will require 80-hour work weeks. They want their children involved in the business, so they can teach them sound fiscal principles.

They want the government to get out of their way, so they can do these things that will make their lives meaningful. These family-centric Americans are perfectly willing to accept the personal responsibility for their decisions, even the failure that sometimes comes with autonomy.

Unfortunately, the same cannot be said for the percent of the population that wants Father Government to be their provider. Can’t feed your children? Never fear, Father Government will come to the rescue. Lost your job and tired of looking for a new one? Don’t bother, because you can still have a car, a TV, a cell phone, even a home thanks to Father Government.

Personal responsibility seems to be the antithesis of how government operates. Even big corporations (i.e., General Motors and Solyndra) can now rely on the government to keep them from failing. Failure is ok, people. It builds character. Teach your children this. Teach them that once they reach voting age the only person they should expect to rely on when it comes to feeding, clothing and providing shelter for them is THEM. We need to stop asking what else our country can do for us, and begin recognizing all that we are perfectly capable of doing for ourselves.

SAAB: Symptom Of A Bailout Culture

SAAB Automobile AB announced today that, for the sixth month in a row, they can’t meet payroll.

The backstory for this American audience: Saab first announced difficulties paying its employees in April. The employees (better-known in socialist speak as “workers”) ceased working, and have been collecting government unemployment benefits equal to their full salaries ever since.

Saab’s financial difficulties began in the late 1988, when the company reported a loss for the year. The company failed to turn a profit in 1989. In 1990, 51% of Saab’s car division was sold to General Motors..

GM’s mismanagement of Saab paralleled GM’s mismanagement of itself: Saab made a substantial profit only one year of the 1990s- in 1995, with excellent European sales of a newly-redesigned Saab 900 launched the previous year. Despite mediocre sales, GM decided to acquire the remaining Saab shares in 2000.

From 2000 to current, Saab has only made a profit in one year: 2001.

Saab’s underperformance worsened in recent years, trending with the rest of the world’s economic downturn.

In 2009, Saab appealed to Swedish courts to be separated from General Motors ownership. Among the issues cited: GM had, for years, been reporting Saab-brand sales as GM-brand sales. This effort failed, but Saab was eventually sold to Spyker Automotive in 2010. Among the condition of the sale were loan guarantees from the Swedish government to Saab. The Swedish government stated that Saab was too important to Sweden’s economy to fail.

The Swedish government itself is partly to blame for Saab’s financial troubles: under Swedish law, once an employer hires an employee, the employer must continually employ that person until the employee resigns, commits misconduct, or the company declares bankruptcy. Layoffs for ‘just cause’ due to insolvency require government approval and mandatory negotiation with the employees’ union representation. In other words, layoffs are illegal in Sweden unless approved by the employees’ union and the government.

Another government issue for Saab: The burden of payroll taxes imposed on employers. Saab reportedly owes employees $5.5 million in salary for the month of November, and owes the Swedish government approximately $10-15 million- two to three times its payroll– in payroll taxes and ‘social fees’ to the Swedish government for the same period.

So let’s review: Saab has been a money-loss for more than two decades, but because it’s “too big to fail”, it’s been propped up with government loan guarantees and subsidies. Government regulations and government taxes and fees- used to fund the Swedish government’s social programs- have been crushing the profitability of this company. And collusion between the Swedish government and labor unions have prevented Saab from taking reasonable steps to manage expenses.

Sound familiar, anyone?

GM – A Car Company Gives Sub-Prime Lending a Try

Ah, the Community Re-investment Act.  It was a progressive dream turned nightmare as it was the root cause of the housing bubble that we are all now living through.  Sure, financial houses reacted to ridiculous government lending requirements by creating silly financial instruments, but they weren’t really given a choice.

Now, GM is following suit.  In July, GM acquired Americredit.  After having dumped their controlling interest in GMAC, this is GMs only in-house financing capability.  The problem is.. it’s a sub-prime car loan company.  For those not paying attention the last two years, sub-prime means high-interest loans to people that don’t have the credit – and perhaps – the personal sense of responsibility to buy a car.

Why would GM choose a sub-prime lender as their only in-house financing arm?  Well, because the Obama administration or UAW probably gave them no choice.  I am certainly speculating here, but there is precedence.  CRA (Community Re-Investment Act) was enacted in 1977 – yeah Carter… sigh.  The supposed purpose behind the ill-conceived legislation was to make sure that minorities weren’t being discriminated against.  Instead, it forced bank to find creative ways to make loans to those that could not afford them.  That’s what we call today, the sub-prime home loan market.

GM is now in the car loan rip-off business.  Anyone who has ever screwed their credit into the ground knows these places.  You end up paying too much for a crappy car and have an interest rate you can barely deal with.  Well, GM certainly has the crappy cars… guess that they’ll be adding in the crappy loans too.

CRA and this GM fiasco are actually tactics meant to support a bigger strategy which has two parts in order to suck in a bigger set of useful idiots.  The first part is about inflation.  To keep inflation going, we have to have an increasing level of credit (fractional reserve revue in some other article .. maybe).  When people borrow, it creates money – a lot of money.  This makes money worth less (not yet worthless.. but they are working on it), which makes things more expensive (inflation).  To create more debt, the government needs to make more people eligible for debt.  So they force banks to lend to people who are way too much of a risk.

GM buying Americredit is a back door automobile re-investment act.  It appears as though a government watchdog has caught on.

Neil Barofsky, the special inspector general for the Treasury Department’s corporate bailout program, said in a letter to Sen Charles Grassley obtained by Reuters on Wednesday that auditors for the Troubled Asset Relief Program also want to know what role Treasury officials played in “reviewing, approving or otherwise participating in the AmeriCredit decision.”

The audit was triggered by a request from Grassley for Barofsky to look into that deal, which carried a 25 percent premium over the AmeriCredit share price at the time. Grassley also requested an examination of GM’s planned public share offering due later this year.

Wait, not only did they buy a sub-prime lender .. they overpaid?  No way, not the government… ugh.

The government being involved in real-estate has caused one of the largest recessions in American history.  Their involvement in the car industry may just conclude what the Unions started – the demise of American manufacturing.

Ford Succeeds Where Government Motors Fails

In a set of reports today, it became apparent that GM and Chrysler were not keeping up with Ford… at all.

Both Chrysler and GM borrowed billions from tax payers thanks to the current administration. We were even told that a great return on our investment would be forthcoming. Not so. Instead, the companies that have received taxpayer dollars are seeing a 41%+decrease in car sales while Ford, who asked for and received nothing, only saw a minuscule 5% reduction.

The government has broken social security, medicare, medicaid, screwed up the public school system, and not taken care of our broken infrastructure.  At what point did we believe that they could run a car company (let alone two)?

Imagine where we’ll be once the government owns health care…. just imagine.