Tag Archives: UAW

MSM Carries Obama’s Water With UAW

 With his teleprompters present, on Tuesday, February 28, 2012, President Barack Hussein Obama attended a United Auto Workers (UAW) meeting in Washington DC. Obama’s speech, billed as a policy speech, was more like a campaign pep rally. Said Obama, “Some politicians even said we should ‘let Detroit go bankrupt!‘ You remember that?” But there is one little problem. While the November 18, 2008 New York Times op-ed was titled “Let Detroit Go Bankrupt,” Mitt Romney never said that. In fact, the Romney op-ed mentioned not a word about bankruptcy. Rather, it provided his thoughts on what the government bail-out should accomplish. Yet another example of Obama lying, playing to his audience, and the MSM covering for him.

While speaking at the UAW meeting, Obama made no mention of Delphi employees, how his bail-out deal caused thousands of non-union autoworkers to be thrown “under the bus.” Obama, when criticized that his bailout was a union payoff, said that all workers sacrificed to save the auto industry. He said, “Retirees saw a reduction in the health-care benefits they had earned. Many of you saw hours reduced, or pay and wages scaled back.” But upon further inspection, we see that the bail-out sacrifices were not distributed equally. Rather, they were redistributed politically. Consider these specific points:

  • Non-union pensioners who worked for Delphi, a GM auto-parts company, lost all of their health and life insurance benefits.
  • In the rush to nationalize the auto industry and avoid contested court termination proceedings, the White House auto team schemed with union officials to preserve UAW members’ pension funds.
  • Dealers and suppliers faced closures based on political connections and lobbying clout.
  • Bondholders were demonized personally by Obama as greedy and stingy, and while trying to protect their property and contractual rights, got cheated, got less than they invested.

Meanwhile, Timothy Geithner served simultaneously as co-chair of the Auto Task Force, board member of the Pension Benefit Guaranty Corporation (PBCG, the federal agency overseeing pension payments to bankrupt companies) and treasury secretary. Let’s see… Geithner was on Obama’s Auto Task Force that saved union jobs, the PBCG that saved UAW pensions, and Geithner’s Treasury Department and General Motors (GM) closely coordinated their public relations strategy and collaborated on making fraudulent claims about GM repaying all of its government loans. Can anyone say “conflict of interest?”

But the larger question is, “Where is the MSM?” Why were not any of these facts, especially the plight of the non-union Delphi employees, reported? Why did the MSM not call Obama on his lying, or at least mention that Romney’s op-ed said nothing about letting Detroit go bankrupt? They portrayed Obama’s bail-out as a success story, never mentioning any of the people and companies who were hurt.

But that’s just my opinion.

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.

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.

“One Nation Working Together” a Show of Progressive Special Interest Groups

Well, at least now they aren’t even pretending.  The extremist left is putting on a show in D.C. and it’s sponsored by every one of their wealthy, over-funded, corrupt special interest groups: Big-labor (SEIU, UAW, et al), TIDES (George Soros), and a collection of socialist and communist organizations.

Rally organizers are starting to compare this rally to Glenn Beck’s “Restoring Honor” event back in August.  Benjamin Jealous, President of the NAACP, said, “Were confident any satellite photos of our rally will stack up nicely to Beck’s”.  Considering that they are paying for bus tickets, food, and in some cases forcing union members to go – this is every bit a rent-a-crowd as could exist.

The idea that this rally is nothing but an attempt for Big-Labor to take back its stranglehold on American workers is not new.  Beck has mentioned it, I just embedded the video from Breitbart and oh so many others have made this point.  What no one’s talked about is the difference in where the money came from.

Were there huge Bank of America signs at Restoring Honor?  Did the rally organizer (Beck) pay for bus rides and meals to fill the mall?  No you say?  Of course not, because he didn’t need to.

This far-left, Union-a-palooza is a sham.  It’s heavily-funded by the special interest groups that have had Democrats doing their bidding for decades.  Unfortunately for them, real leaders like Governor Chris Christie (NJ), are showing the unions for what they are – thieves.  Now big-labor has to fight back the only way they know how – propaganda.

Unions have outlived their usefulness and have pissed-away the trust that their membership put in them.  They are one of the largest reasons for the loss of American manufacturing jobs.

With union labor costs about double those of non-union Japanese and other foreign auto manufacturing plants in the United States, Big Three American automakers are financially bleeding to death.  This outcome was inherent in the origin of industrial unions in the violence of revolutionary socialism.[1]

Last year, when Obama took over the largest car maker in America, it wasn’t just to “save” the jobs, he knew he needed to save the UAW.  I would argue that it was his sole goal, GM was just a necessary evil.  Consider how the company ownership was divied-up.  True investors, bond holders, were systematically dismantled and 17.5% of the company was given to the UAW.  Even worse, 65% of Chrysler was given to the union.[2]

Unions are weakening America’s ability to compete in the global market.  They are also a larger political force than any bank, wall street investment house or CEO.  Organized labor (a synonym with organize crime) controls the Democrat party and is running both the Democrats and American manufacturing into the ground.

This rally is just a last attempt at re-energizing their unthinking base.  People who believe that making ludicrous salaries for simple work need the unions to keep-up the thuggery on American companies.  The thugs need those useful idiots to keep thinking they deserve those salaries and benefits.

”]Union wagesSaturday will be a self-love fest.  Me, me, me.  What can the government give me?  What can I get out of the public treasury?  That’s the union, socialist, and communist position – ME.

When you see them all on T.V., waving their signs and performing their paid duty as for-hire attendees, just look for what they are asking for.  Is it to return to self-reliance?  To find out what more they could do to help the country?  To understand that we must make personal sacrifices if we don’t want to end up like Greece and Portugal?

No, you won’t hear any of that.  You’ll hear them being told how to get what they think they deserve.  You’ll hear about the evil free market and how our economic system has done them wrong and must be reformed.  You’ll hear a whole bunch of unknowns (and Al Sharpton) tell them that they can get what they want by simply demanding it.

They will be told that they can get what they want by having the government take it from all those people that go to Tea Parties.

It won’t be said that plainly, but if you listen, closely – you’ll hear it.

[1] “Labor Unions Admit They Are Killing American Jobs” – http://www.intellectualconservative.com/2006/06/15/labor-unions-admit-they-are-killing-american-jobs/
[2] “Which Side Are You On” – http://www.slate.com/id/2219607/

[3] “Transformational UAW Deal: Accept Professors’ Pay” – http://mjperry.blogspot.com/2007/07/uaw-pricing-themselves-out-of-market.html

Ford Held Hostage By Obama Administration

The government having a major stake in an American company was obviously in-conflict with the Constitution, but the United Auto Workers union (UAW) having a large stake in GM and Chrysler was an outright conflict-of-interest.  Obama followers said that it would not cause any problems and that Conservatives were just overreacting.  Bloomberg.com reported today, that the UAW is refusing to give Ford the exact same concessions it gave to the GM and Chrysler which will put Ford at a competitive disadvantage against its two propped-up competitors.

“Ford, the only major U.S. automaker to avoid bankruptcy this year, sought concessions similar to those secured by General Motors Co. and Chrysler Group LLC…Ford has said it needs the concessions to ensure that it doesn’t have a labor-cost disadvantage against GM and Chrysler, which unloaded debt, closed plants and eliminated dealership contracts in their court restructurings…About 75 percent of members voting nationwide rejected the deal, one of the people said. It called for a six-year ban on strikes over wages and benefits.”

Concerns over the UAW taking this approach at strengthening their financial stakes in GM and Chrysler by holding Ford to a non-competitive agreement have now been proven true.  The UAW stands to take a possibly-fatal financial blow if GM and Chrysler do not succeed.  By trading cash for stock in those companies, the UAW is now relying on the two bankrupt car companies to return to profitability.

GM is coming back to the government for another bail-out as it’s restructuring plans are not making the company successful.  How much of a hand does the Obama administration have in formulating this strategy to ruin the only non-government owned, non-union backed American automotive company?  The President would lose a large portion of his support if the UAW was destroyed by the fall of GM and Chrysler.  The administration now has a personal interest in seeing Ford at a disadvantage to its two new assets.

This is precisely why the government should not get involved in private industry.  It cannot be impartial, it will destroy the free-market system one industry at-a-time.  This is the disassembly of capitalism, “brick-by-brick” as Robert McChesney, an Obama Czar, claimed they would do.  How long until America wakes up?

I, for one, hope Ford shuts-down every factory in Michigan between now and the end of its current UAW contract (2011).  FMC should then open even more plants in right-to-work states such as Texas and see where the competitive advantages are then.