General Motors 2: The Strengthening of the Strength is Strong & Stuff

Regular Red State readers know how much fun I’ve had covering the auto industry in recent years. From Obama’s push for newer, tougher CAFE standards on a struggling industry to GM’s crony CEO Dan Akerson. From the Chevy Volt’s fits and starts to GM blowing tax dollars onbonuses, marketing schemes, and ideologically-driven “green” projects.  I even had the honor of  being attacked by Attack Waaaaaaaaaatch probably because I wrote about GM’s special tax gift, as well as the fact that I’ve been caught parodying GM ads and clips.  To put it mildly, it’s an issue I’ve followed closely.

It would all be funnier if none of it was true.

But maybe I’m wrong. Maybe “Government Motors” is over. Maybe, once Treasury sells off its remaining shares, GM will magically become a pioneer of free market industry, worthy of its storied legacy. Maybe, just maybe, GM will begin to appeal to anti-bailout conservatives & libertarians again one day. Take, for example, GM’s new Chevy Silverado commercial, “Strong”:

Doesn’t it make you feel warm? “He,” whoever he is, shows up to work on time! And he’s monogamous! He has a barn, and he works on a farm and stuff! You can totally trust him – he’s steady!  Like a Chevy truck, obviously. Nashville artist Will Hoge, a hip, edgy, self-styled musical pundit, recorded the music for the ad.

‘Murica, y’all.

GM knows conservatives are a huge target market. That’s why they sponsored a “Free Enterprise tour” with the U.S. Chamber of Commerce this summer (which was rightly mocked by the National Legal and Policy Center), and that’s why they made this ad. I’m curious what readers think: are you more or less likely to buy a GM truck because of the GM bailout?

Via: Red State

Continue Reading....

What’s Another $45 Million at the Energy Department?

The Department of Energy (DOE) announced it is spending $45 million of taxpayer money for 38 different projects for advanced transportation technologies. But private companies should be making these investments on their own to provide the best products available for consumers.

The 38 projects funded by DOE are going to universities, laboratories, and private companiesfor development of more efficient batteries for electric vehicles, advanced fuels and lubricants, efficient heating ventilations and air conditioning systems, and the next generation of lightweight materials to make cars lighter while not compromising safety.

The list of projects come across as innovative, cutting-edge, and perhaps transformative of the transportation industry. But automakers and other manufacturers are not paying for this research themselves; they’re relying on taxpayer money.

If companies believe it is in their best interest to invest in research and development, they should make those investments with their own money. The companies that identify opportunities will capture the economic benefits, and those that don’t will remain stagnant or suffer. When companies have to make those choices with their own money, risk and reward are properly aligned.

In some instances, the DOE spending is blatant corporate welfare. DOE awarded $1.5 million to Caterpillar, $1.75 million to General Electric, $3 million to 3M Company, and $350,000 to Ford Motor Company. If these companies believe it is valuable to work with the DOE laboratories and universities, they should do so, but there is no need for taxpayers to subsidize them.

Via: The Foundry

Continue Reading...

Opinion: All Mitt Needed To Do Was Sound Reasonable, He Succeeded

A Perfectly Plausible President

Mitt Romney needed to pass the usual tests for Republican presidential candidates in his debate Monday night with President Obama.

There was the Ford test (alternatively known as the Palin/Cain/Perry test): Would Mr. Romney say something so obviously misinformed, so manifestly silly, so revealingly ignorant as to disqualify him from serious consideration as a prospective commander-in-chief? He said nothing of the sort.

There was the Goldwater test (unfairly named, but reputations are stubborn things): Did Mr. Romney make pronouncements so belligerent as to make ordinary people fear for their children's safety—or at least provide David Axelrod a chance to make it seem as if he did? He did not, though that won't stop Mr. Axelrod from trying.

And there was the Bush test (not unfairly named but mistakenly understood to mean ideology when it ought to be about consistency): Would Mr. Romney find a deft way to define his foreign policy as something other than a retread of the 43rd president—but also as something defensible, distinctive, and (not least) identifiably Republican?

On this score, Mr. Romney succeeded, too, if only in a manner coyly calculated to raise the hackles of every conservative who has harbored doubts all along about the Massachusetts governor.

Enlarge Image

Mitt Romney

"We can't kill our way out of this mess," he declared early in the debate, a point that, had it been made by Mr. Obama, would have been treated as evidence of Democratic pusillanimity. He offered a vision for Mideast social and economic progress so wholly unobjectionable it would have made any Peace Corps volunteer proud. On Syria, Egypt, Afghanistan, Iran, drone strikes and China he offered policy prescriptions that—as Mr. Obama didn't fail to notice—were all-but identical in substance to the administration's.

He even got in a personal dig on President Bush toward the end, in connection to the auto bailout.

Via: WSJ

Continue Reading...

Gasparino: GM’s Devil’s Bargain

GM’s devil’s bargain - Still stuck with Uncle Sam

The Obama campaign raves about how it “saved the auto industry” — that is, the government’s bailout mainly of General Motors — and so preserved millions of jobs.

But if it was such a success, why is the bailout losing so much money — and why do current GM managers want nothing to do with Washington as they try to save the company?

The answer: They know that with the lefties in the Obama administration breathing down their necks, their chances of ever restoring GM to its past glory are anywhere from slim to none.

Of course, it’s hard to feel sorry for GM’s management, which news reports and my own sources say has been prodding the administration to sell off its remaining 26.5 percent stake in the company. GM’s bosses invited Uncle Sam in — tough luck for them that he doesn’t want to leave.

For way too long, the Big Three — GM, Ford and Chrysler — kept on cutting generous wage and benefit deals with their unionized workforce as if it was still the 1950s and ’60s, when foreign competition didn’t exist. By 2009, that heyday was long, long past — and the Great Recession brought their highly flawed business model crashing down.

The $17 billion in loans from the Bush administration in its waning days wasn’t enough. GM and Chrysler came hat in hand to the President Obama for a little more hope and change.

An easy solution would have been to let the companies reorganize under Chapter 11 of the bankruptcy code. They’d have had a good chance to survive; plenty of other companies have restructured under bankruptcy protection and emerged later as viable businesses. American Airlines is doing it right now, and without major disruptions in service, or mass layoffs.

As it turned out, Chrysler and then GM did declare banktuptcy — but the resolution wasn’t the normal court-overseen reorganization. Under Obama, the feds dumped in tens of billions more into the companies and took controlling stakes in an industry that was once a bedrock of free-market capitalism.

In the administration-overseen restructuring, bondholders got hit hard in what many legal experts say was a violation of bankruptcy laws, and dealerships around the nation got slammed

.

But the president’s buddies in the United Auto Workers largely feasted. Sure, the absurd “jobs bank” — Detroit’s version of a “no show job,” where the auto companies basically handed fired workers free money — got shut down. And new hires lost out on the old guaranteed pensions for the market-driven 401-k plan that most of the rest of us rely on for retirement.

Via: New York Post

Continue Reading...