Category Archives: Government Motors

Or how we nationalized our economy

Guzzling? No. Gobbling.

Posted on by

Congress poked its head up out of the gopher hole with a $4,500 incentive to trade in your gas guzzlers for new, fuel-efficient rides. The House passed the bill yesterday on a 298-119 vote.

President Barack Obama has supported the plan as a way to help struggling automakers and improve the fuel efficiency of the cars and trucks on the road.

Huh. That incentive might have helped struggling automakers even more six or 12 months ago.

Now that the Administration has run two of three American car makers out of business, it is too bad the only place left to trade is either Government Motors or Overseas, Inc.

Imagine that.

Remember you and you and you voted for these turkeys. A few of us voted against ’em but that makes me no less doomed.

Wrong Target

Posted on by

Three Indiana pension funds got it wrong. The state pension and construction funds sued Chrysler to keep the automaker from completing its acquisition by Fiat.

Regular readers have figured out by now that I am one of the smartest men I know. I am, however, neither the smartest man in the world nor even the only smart man in the world. That means I can’t possibly be the only person to have realized that the automakers are the wrong target for litigation.

The Administration favors the Chrysler-Fiat deal and wants to remove this road block. Nonetheless, the Supreme Court granted a stay that temporarily blocks the Chrysler sale. The court will decide soon whether to schedule a full hearing. Fiat says they will “never” walk away from the deal.

There is still time for bondholders and shareholders to come together. We need a lawyer. Maybe a platoon of them.

Think about it. Every lawyer arguing for tort reform is a Democrat. What better group to file a shareholders suit?

But there’s no money left at Chrysler or GM, you say. The CEO and many execs have changed. Who is there to sue?

How about we sue the people who caused the problem?

I’ll give you a minute.

Yeppers, I mean the President and the U.S. Congress.

A government has only one tool to take private property from its owners: eminent domain. The Takings Clause of the Fifth Amendment states … nor shall private property be taken … without just compensation.

If all goes according to plan, the U.S. and Canadian governments, a United Auto Workers health care fund, and Fiat will end up owning Cerebus Capital Management’s 80.1% of Chrysler Holding LLC and Daimler AG’s 19.9%. The Fiat presence dilutes the taking, but a governmental taking it is.

The picture is clearer in the General Motors tower where the administration stole 100% of the company from the shareholders. What did they do with it? They parceled it out to cronies. Canada got 12%. The Union bosses got 17%. And Obama got most of the rest, didn’t he?

I will join any class action lawsuit against the United States government for taking our private property without compensation.

Fire Sale

Posted on by

NEW YORK — CNNMoney reports that General Motors Corp. will sell its Saturn unit to Penske Automotive Group, owned by racing and business legend Roger Penske. The deal gives Penske the rights to the brand, but GM will continue production of the Saturn Aura, Vue and Outlook.

If anyone can make it work, Mr. Penske can.

I hope he still has his unfair advantage.

Too bad Pontiac isn’t part of the deal. The excitement of the Pontiac line comes from Australia’s Holden right now: the G8, the GTO, and the El Camino-style Holden Ute which the motoring press called the G8TR (“Gator”) but Pontiac expected to sell as the G8 ST. Since Mr. Penske will “import” his Saturns from the GM plants, he could do the same with the best of the Pontiac line and sell them all under the “no haggle” Saturn roof.

Wow.

Shares of Penske (PAG) rose 3% in morning trading.

Meanwhile, GM announced on Tuesday it would sell its Hummer line to China’s Sichuan Tengzhong Heavy Industrial Machinery Company Ltd. thus moving the U.S. Army’s primary ground vehicle production into the hands of a foreign nation.

General Motors, The Final Rant

Posted on by

Auto czar and Commander-in-Thief Barack Obama has raced General Motors through a complex series of last-minute deals to speed the automaker way into the fast-track, presidentially engineered, bankruptcy they filed this morning. The company will emerge in 60 to 90 days as the nationalized U.S. Government Motors.

Oh, yeah?

What else would you call a car business that is

  • Beaten down by political maneuvering
  • Stolen from its owners
  • Handed not just in majority but almost in entirety to “your” government.

History has textbooks full of taking industries or assets into public ownership under a national government or a state. Wikipedia reports that “The motives for nationalization are political as well as economic. It is a central theme of certain brands of ‘state socialist’ policy that the means of production, distribution and exchange, should be owned by the state on behalf of the people.”

Charged with operating “in the public interest,” nationalized industries are under strong political pressure to make social goals instead of decent products (or profits).

Here are some examples of historic nationalizations:

  • The Castro government “expropriated” all private companies after the Cuban Revolution of 1959.
  • The Yeltsin government seized Gazprom assets in 1998, claiming the company “owed back taxes.”
  • In the past two years alone, Hugo Chavez stripped control of the Orinoco oil belt, nationalized the cement industry, steel mill Sidor, and much more.
  • The Obama government will nationalize General Motors today by seizing its assets. They will claim the company might default on its loans.

“We won’t keep it any longer than necessary,” President Obama said.

Have you noticed? Every thief has an excuse.

Thomas Jefferson wrote, The democracy will cease to exist when you take away from those who are willing to work and give to those who would not.

Was King George III really any worse? That poor monarch just wanted the profits on our tea.

Posted early to match the 8 a.m. filing deadline.

Guest Post: Bob says I ask you, Senator Specter–DID YOU KNOW?

Posted on by

Arlen Specter (D-PA) is the correspondent’s senior United States Senator from Pennsylvania.

Dear Senator Specter:

I will make this as short as possible.

As of Monday, May 24, just 6 days ago, the federal government was supposed to get 50% of General Motors new stock, the UAW 39%, the bondholders 10% and the original stockholders the remaining 1%. (I bought GM stock based on that.)

This was sure never to fly as the bondholders would expect the courts to give them more so it was a “deal” designed to ensure bankruptcy.

On Friday, the deal suddenly changed. Now the UAW gets 17.5%, the Feds get 72.5%, and the bondholders still get only 10%, albeit with warrants to buy 15% more stock. Common stock becomes pure trash.

Why did the UAW ownership drop? Did the UAW agree because they thought that the additional money would go to the bondholders, potentially averting a bankruptcy that destroys the value of their own common stock?

I ask you, Senator Specter: DO YOU KNOW?

If you do not know. do you know anyone who does know? There hasn’t been a word breathed in the press, so I assume the media must not know (or doesn’t care since a bankruptcy would sell more copy. Even the Wall Street Journal thinks the government “sweetened the offer” to the bondholders (at the same time the government upped its own holding by almost a third, a little fact that keeps slipping through the cracks.)

If you do not know, why is this bankruptcy allowed to proceed without a timeout for hearings, so the executive branch can explain under oath what the hell they are doing to the American people?

A bankruptcy will insure that the GM stock in millions of 401Ks (actually already “201Ks” or even “101Ks” ) around the country can NEVER recover their value. Without a bankruptcy, they could eventually recover.

This government takeover leaves millions of people’s retirement prospects destroyed, including many who are already retired and unable to start over. That includes the UAW members who accepted a smaller share of the new company plus non-union GM employees, dealer employees, in addition to mutual funds that are held by people all over the country. A large number of Pennsylvania retirees and stockholders are your own constituents and voters.

I ask you, Senator Specter: What is the benefit to destroying the common stock? Why destroy business ownership if the deals in place let the GM stock in those 401Ks recover?

Is it the business of this government and the political party you joined to insure that people can never retire?

I ask you, Senator Specter: What will the impact of the bankruptcy be on the healthcare programs for GM employees and retirees? We are not just talking UAW line workers, but all GM employees, union, non-union, and professional. Is it the business of this government and the political party you joined to make sure people have poor healthcare?

Or is it the intention of this government and the political party you joined to build demand for nationalized healthcare!

I ask you, Senator Specter: Wouldn’t such an approach be fraudulent?

Ralph Nader, whom I historically have despised for the fraud he perpetrated with Unsafe at Any Speed, published an editorial in Wall Street Journal on Friday. I laud him for raising the issues and for pointing out that IT IS NOT TOO LATE TO AVOID THE BANKRUPTCY OF GENERAL MOTORS.

It will take more than that lone voice in the wilderness.

We need a major voice in the Senate to call for a time out and for hearings to that the American Public can understand what is being done in their name. YOU MUST DO THIS TODAY.

Thank you.

(signed)
Bob Post, registered voter

Footnote:
Arlen Specter (previously D-, then R-, and now D-PA) is the correspondent’s senior United States Senator from Pennsylvania. Senator Specter had been a member of the Democratic Party before switching to the Republicans to win a campaign for district attorney. Elected to the Senate in 1980, Specter rejoined the Democratic Party this year when he discovered he would lose his upcoming Republican primary.