The Conservative Cave
Current Events => Politics => Topic started by: BlueStateSaint on September 10, 2012, 07:48:22 AM
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This just showed up on National Review. Drudge highlighted the link.
The Democrats’ GM Fiction
September 10, 2012 4:00 A.M.
By The Editors
The Democrats have decided to run in 2012 as the bailout party. It is an odd choice — the 2008–09 bailouts were deeply unpopular among the general public, and even their backers were notably conflicted about the precedent being set and the ensuing moral hazard. But Democrats have nonetheless made one of the most abusive episodes in the entire bailout era their economic cornerstone: the government takeover of General Motors.
The GM bailout was always an odd duck: The Troubled Asset Relief Program (TARP) was created in order to preserve liquidity in the financial markets by heading off the collapse of key financial institutions that had made catastrophically bad bets on real-estate securities — nothing at all to do with cars, really. GM’s financial arm, today known as Ally Financial, was in trouble, but GM’s fundamental problem was that its products were not profitable enough to support its work-force expenses. A single dominant factor — the United Auto Workers union’s extortionate contracts with GM — prevented the carmaker from either reducing its work-force costs or making its products more efficiently. And its hidebound management didn’t help.
Admirers of the GM bailout should bear in mind that it was the Bush administration that first decided to intervene at the firm, offering a bridge loan on the condition that it draw up a deeply revised business plan. President Obama’s unique contribution was effectively to nationalize the company, seeing to it that the federal government violated normal bankruptcy processes and legal precedent to protect the defective element at the heart of GM’s troubles: the financial interests of the UAW. It did this by strong-arming GM’s bondholders into taking haircuts in order to sweeten the pot for the UAW. The Obama administration also creatively construed tax law to relieve GM of tens of billions of dollars in obligations — at the same time that Barack Obama & Co. were caterwauling about the supposed lack of patriotism of firms that used legal means rather than political favoritism to reduce their tax bills.
Mitt Romney’s proposal for a structured bankruptcy would have necessitated considerable federal involvement, too, but with a key difference: The UAW contracts would have been renegotiated, and GM’s executive suites would have been cleaned out, placing the company on a path toward innovation and self-sufficiency rather than permanent life support. Which is to say, Obama did for GM what he is doing by un-reforming welfare: creating a dependent constituency.
The Democrats cling to the ridiculous claim that the bailout of GM and its now-Italian competitor, Chrysler, saved 1.5 million U.S. jobs. This preposterous figure is based on the assumption that if GM and Chrysler had gone into normal bankruptcy proceedings, the entire enterprise of automobile manufacturing in the United States would have collapsed — not only at GM and Chrysler but at Ford and foreign transplants such as Toyota and Honda. Not only that, the Democrats’ argument goes, but practically every parts maker, supplier, warehousing agency, and services firm dedicated to the car industry would have collapsed, too. In fact, it is unlikely that even GM or Chrysler would have stopped production during bankruptcy: The assembly lines would have continued rolling, interest and debt payments would have been cut, and — here’s the problem — union contracts would have been renegotiated. Far from having saved 1.5 million jobs, it is not clear that the GM bailout saved any — only that it preserved the UAW’s unsustainable arrangement.
The bolded and italicized above is what's going to cause another bailout; probably in a few years. What's President Romney going to say?
The rest is at: http://www.nationalreview.com/articles/316379/democrats-gm-fiction-editors
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And of course, let's pimp a car that loses our company $49 THOUSAND per unit!!!!
http://www.reuters.com/article/2012/09/10/us-generalmotors-autos-volt-idUSBRE88904J20120910
Nearly two years after the introduction of the path-breaking plug-in hybrid, GM is still losing as much as $49,000 on each Volt it builds, according to estimates provided to Reuters by industry analysts and manufacturing experts.
Cheap Volt lease offers meant to drive more customers to Chevy showrooms this summer may have pushed that loss even higher. There are some Americans paying just $5,050 to drive around for two years in a vehicle that cost as much as $89,000 to produce.
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And of course, let's pimp a car that loses our company $49 THOUSAND per unit!!!!
http://www.reuters.com/article/2012/09/10/us-generalmotors-autos-volt-idUSBRE88904J20120910
Hell, all they need to do is sell massive numbers of the car, make it up in volume, that'll work.............. :whatever:
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Hell, all they need to do is sell massive numbers of the car, make it up in volume, that'll work.............. :whatever:
Not if they sell the cars for less than it costs to make them. Like the Volt.
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Not if they sell the cars for less than it costs to make them. Like the Volt.
I actually heard a VP (company I worked for) say he'd rather do the VOLUME at a loss than make money with low sales numbers/profit. It's all about the perception. Crazy, I know. :thatsright:
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A Chevrolet dealership that is part of an auto dealer group in Toms River, New Jersey, has sold only one Volt in the last year, said its president Adam Kraushaar. The dealership sells 90 to 100 Chevrolets a month
Not even worth keeping them in stock.
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California to the rescue;
Many Chevy dealers in the Golden State are absolutely panting to get Volts into their showrooms because a recent change in California law means that the driver of any EV can use the high-occupancy vehicle (HOV) highway lanes even if they’re alone in the car.
http://www.forbes.com/sites/dalebuss/2012/06/27/volt-recharges-chevy-sales-in-california-will-cruze-stall/
Must be some bad traffic problems in California to get people to buy Volts.
BTW: while searching for this article, I saw many, many USED Volts for sale. :-)
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California to the rescue;
Must be some bad traffic problems in California to get people to buy Volts.
BTW: while searching for this article, I saw many, many USED Volts for sale. :-)
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People buy the volts for the deduction, then turn around and sell them if they can find a sucker.
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California to the rescue;
Must be some bad traffic problems in California to get people to buy Volts.
BTW: while searching for this article, I saw many, many USED Volts for sale. :-)
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That rule has been in effect almost 20 years.
And it hasn't done jack squat to either sell more EV's or relieve congestion.
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Volt sales spiked this month, DOD is buying 1500 of them. That should get them up to 1506 or so for Sept.
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Volt sales spiked this month, DOD is buying 1500 of them. That should get them up to 1506 or so for Sept.
Will they be able to keep track of them, or lose them like Floriduh did ?
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California to the rescue;
Must be some bad traffic problems in California to get people to buy Volts.
BTW: while searching for this article, I saw many, many USED Volts for sale. :-)
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California has charging stations everywhere! People love free electricity for those volts! :lmao: