I've noted before how the GM and Chrysler bankruptcies were carefully organized by the Obama administration to give maximum benefits to its union allies and strip them from those who were not in political favor at the time. It was a blatantly corrupt and dishonest process, and I vowed in 2009:
I shall never again buy any new Chrysler or General Motors vehicle or other product, unless and until the issues raised by their bankruptcies have been resolved in accordance with the current (i.e. today's) law of the land, and any and all benefits unjustly accruing or unfairly transferred to political stakeholders have been nullified and withdrawn forever.
I've read nothing since then to make me change my opinion - rather, it's been reinforced. Yesterday brought more news to make me even more determined in my position.
The U.S. government lost $11.2 billion on its bailout of General Motors Co (GM.N), more than the $10.3 billion the Treasury Department estimated when it sold its remaining GM shares in December, according to a government report released on Wednesday.
The $11.2 billion loss includes a write-off in March of the government's remaining $826 million investment in "old" GM, the quarterly report by a Treasury watchdog said.
The U.S. government spent about $50 billion to bail out GM.
. . .
"The goal of Treasury's investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful," Treasury Department spokesman Adam Hodge said.
There's more at the link.
So that's $11,200,000,000 of US taxpayers' money down the drain - lost, gone, wiped out. I wonder how many taxpayers consider GM's survival to have been worth that waste? I certainly don't!
Even after the bailout and alleged 'concessions' by the unions, vehicles made by the Big Three still have much higher labor costs than their competitors. In 2008:
The Associated Press reported that, for example, the average United Auto Workers member makes $29.78 per hour at GM, while Toyota pays its workers (most of whom are non-union) about $30 per hour. However, when total benefits (including pensions and health care for workers, retirees and their spouses) is factored in, GM's total hourly labor costs is about $69, while Toyota's is about $48.
Again, more at the link. The bailout hasn't done much to change that, although new hires are earning much less per hour than their more senior counterparts (who have been protected by the union from cuts in compensation). Meanwhile union fat-cats continue to enjoy extravagant salaries and benefits - far more so than the members whose dues pay for them.
I still see no reason to ever trust GM or Chrysler with my money again. I hope they both fail. It would be no more than poetic justice, given the corruption and political shenanigans that have kept them alive.
Peter
7 comments:
They should have both declared bankruptcy, and reorganised/streamlined as required. By bailing them out (with other peoples' money), they have no reason at all to do things differently.
As has been stated plenty of times before.... they *could not* declare a conventional bankruptcy. This was as the height of the financial crisis, and the lines of credit required to operate in bankruptcy were not being provided by the banks, who had their own problems at the time. The only other option at the time was liquidation, which would have resulted in a cascade of failures of secondary suppliers, etc. Although the solution reached was not to everyone's liking (understandably), saying that you hope these companies go out of business and thus seeing hundreds of thousands of persons lose their jobs is a mighty horrible thing to wish for, unless you really are a cold-hearted dick, in which case, carry on with your dickishness.
I will never have enough money to buy a new car thanks to Obama care, nothing like a part time job to dampen the car buying experience. I long ago decided not to ever buy a Chrysler car, not a good company.
My wife is a VW nut herself, so when time came for me to replace my chevy a few years back, we went with a TDI Jetta, as no one else was selling diesels at our price range. 60k miles in two years later I'm still happy every time I get in it, and even with the higher diesel price, happy when I get 49 mpg. GM/Chrysler had nothing that matched, and even if they did-wouldn't buy from government motors on principle.
@Anonymous at 1:55 AM: You ignore the fact that the bailout deliberately and callously screwed thousands of investors and retirees out of their money, IGNORING US BANKRUPTCY LAWS. It was prima facie ILLEGAL under settled practice. The Obama administration rode roughshod over the law to ram it through, and forced it through the courts using pressure the like of which had never before been encountered in a major bankruptcy case. I've written about the illegalities many times before: see, for example:
http://bayourenaissanceman.blogspot.com/2012/06/truth-about-auto-industry-bailout.html
The courts are still in the process of dealing with the resulting lawsuits.
You may think it 'dickish' to wish that the fruits of such illegality
should not be rewarded with success. I call it simple justice, albeit delayed far too long.
$11.2 Billion loss versus $4 billion for Bank of America.
Who says the government can't do anything as well as the private sector.
Gerry
There is a better reason not to buy GM or Mopar; they are money pits.
I worked for thirty+ years in the retail automobile sector. For many years, I had the responsibility of making the used vehicle inventory "front line ready". Our average recon costs on Mopar was $1,800+, GM $1,300+, and Ford $800+. Honda and Toyota were about the same as Ford. I wholesales 99% of the European trade ins.
Today's best new vehicle value? Hyundai/Kia, Ford, Subaru.
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