Normally you might say, tough luck investors. But this is Government Motors. The Treasury still owns 26.5% of GM, or 500 million shares. Taxpayers are still out $26.4 billion in direct aid. Shares would have to hit $53 for the government to break even.
Those shares were worth about $9.8 billion as of Monday. That would leave taxpayers with a loss of $16.6 billion.
But that's not the full tally. Obama let GM keep $45 billion in past losses to offset future profits. Those are usually wiped out or slashed, along with debts, in bankruptcy. But the administration essentially gifted $45 billion in write-offs (book value $18 billion) to GM. So when GM earned a $7.6 billion profit in 2011 (more on that below), it paid no taxes.
Include that $18 billion gift, and taxpayers' true loss climbs to nearly $35 billion.
In a world where we are supposed to worry about how Mitt Romney spends his own money and not worry about how Barack Obama is spending our money, just chalk up General Motors as another Obama public equity fail.
The Congressional Oversight Panel said in a new report that the $23 billion in aid extended late last year to Chrysler LLC and General Motors Corp. would probably not be repaid.
Under the federal auto bailout package, General Motors received $50 billion to retool and ease its transition into bankruptcy. Chrysler received $10.5 billion. In addition, the government gave $12.5 billion to auto financing firm GMAC and $3.5 billion to auto suppliers.
The market value of those companies -- and of the government's stock in them - would have to rise dramatically for the government to make back its initial investment. The report noted that, for taxpayers to break even, the restructured an streamlined General Motors would need to have a market capitalization higher than that the original, much larger company ever achieved.
Overall, taxpayers now hold 10 percent of Chrysler and 60 percent of General Motors.
"Although taxpayers may recover some portion of their investment in Chrysler and GM, it is unlikely they will recover the entire amount," the panel said.
The report also takes to task the Treasury department for never clearly defining its objectives in using TARP funds for the auto bailouts. Additionally, it notes the significant ambiguity in TARP legislation language and congressional intent as reason for there to be "no effective challenge to its decision to use TARP funds for this purpose."
This tends to be the standard M.O. with Congress with respect to Bailout Nation. One cannot hit a target, one cannot see. The complete lack of transparency makes both the effectiveness of the program and any challenges to it, highly dubious.
During the Democratic National Convention last week, Team O took great pains to avoid the American Recovery Act of 2009 (aka Porkulus) which cost the American tax-payer upwards of $800 billion and which had little noticeable effect on the private sector economy and the health-care reform act (aka ObamaCare), instead choosing to focus on the killing of Bin Laden and the auto bailout of General Motors and Chrysler.
As loyal subjects American citizens, we’d love to do our part in getting the word out (well, we have been already, if you are familiar with this blog) and in this case, it is with respect to the Chevy Volt.
General Motors Co sold a record number of Chevrolet Volt sedans in August — but that probably isn't a good thing for the automaker's bottom line.
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.
And while the loss per vehicle will shrink as more are built and sold, GM is still years away from making money on the Volt, which will soon face new competitors from Ford, Honda and others.
GM's basic problem is that "the Volt is over-engineered and over-priced," said Dennis Virag, president of the Michigan-based Automotive Consulting Group.
They are over-priced even with the $7,500 tax payer-provided subsidy.
And no wonder people are leasing instead of buying. Who wants to fork over another 10 grand in 5-7 years when that battery needs to be replaced?
GM's quandary is how to increase sales volume so that it can spread its estimated $1.2-billion investment in the Volt over more vehicles while reducing manufacturing and component costs - which will be difficult to bring down until sales increase.
But the Volt's steep $39,995 base price and its complex technology — the car uses expensive lithium-polymer batteries, sophisticated electronics and an electric motor combined with a gasoline engine — have kept many prospective buyers away from Chevy showrooms.
Some are put off by the technical challenges of ownership, mainly related to charging the battery. Plug-in hybrids such as the Volt still take hours to fully charge the batteries - a process that can been speeded up a bit with the installation of a $2,000 commercial-grade charger in the garage.
Another $2,000 you can sink into battery technology whose price won’t decline appreciably in the near or mid-term as long as China has an effective corner on the lithium-ion and rare earths market that are essential for these batteries.
Oh, and the greenies haven’t shared with us how it is we are to dispose of these batteries.
Back to the article:
"I don't see how General Motors will ever get its money back on that vehicle," countered Sandy Munro, president of Michigan-based Munro & Associates, which performs detailed tear-down analyses of vehicles and components for global manufacturers and the U.S. government.
It currently costs GM "at least" $75,000 to build the Volt, including development costs, Munro said. That's nearly twice the base price of the Volt before a $7,500 federal tax credit provided as part of President Barack Obama's green energy policy.
Other estimates range from $76,000 to $88,000, according to four industry consultants contacted by Reuters. The consultants' companies all have performed work for GM and are familiar with the Volt's development and production. They requested anonymity* because of the sensitive nature of their auto industry ties.
Basic math, even that taught in California’s public schools, will tell you that selling a product for half the amount it took to produce it will not reap your company its intended profits.
With apologies to the voters of Michigan and Ohio, don’t expect to hear anything but happy-speak out there on the campaign trail when one doesn’t have to scratch too far beneath the surface to get to the ugly truth of the auto bailouts.
* Allow us to translate: As long as the U.S. Government still owns a large share of General Motors, we don't want those thugs in this administration knowing it was us sharing the bad news.
A study by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy, has shown that between direct subsidies to GM and indirect ones to GM subcontractors and parts providers, there may be as much as $250,000 worth of subsidies in each $41,000 Chevy Volt.
Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.
Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors’ plug-in hybrid electric vehicle. His analysis included 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.
The Volt subsidies flow through multiple companies involved in production. The analysis includes adding up the amount of government subsidies via tax credits and direct funding for not only General Motors, but other companies supplying parts for the vehicle. For example, the Department of Energy awarded a $105.9 million grant to the GM Brownstown plant that assembles the batteries. The company was also awarded approximately $106 million for its Hamtramck assembly plant in state credits to retain jobs. The company that supplies the Volt’s batteries, Compact Power, was awarded up to $100 million in refundable battery credits (combination tax breaks and cash subsidies). These are among many of the subsidies and tax credits for the vehicle.
And how exactly are those Chevy Volt sales coming along? Eh, not so hot as Neal Cavuto chats with Mark Modica, an Associate Fellow of the National Legal and Policy Center.
6,000... 4,000 short of General Government Motors goal of 10 grand. And those numbers would appear to be padded by fleet sales to government agencies and others in the regime's crony circle like, General Electric.
It should be noted that we are not opposed to electric cars, per se. What we are opposed to is the subsidization of technology that is clearly not market-ready. Giving the evil rich a $7,500 break on the sticker price is ridiculous enough (are you listening #OWS?). However, and for the sake of argument, let's say that $250,000/unit subsidy figure is high... way high. Let's say its merely a third of that. So, now you have the Chevy Volt being subsidized to the tune of around $85,000 which is still over twice the sticker price! All that money dumped into it and still no one wants to buy it.
Ladies and Gentlemen, that is patently absurd and there is just no other way to look at it.
We forgot where we saw it, but there is apparently legislation pending in the house that would get rid of the purchase rebate. That's a good start but Congress needs to gut this entire crony charade from top to bottom.
This was originally posted back in May of this year but as promised, we are re-posting it as it is a tremendous representation of the outrageously callous disregard for the truth and transparency held by the regime as well as a callous disregard for the American people.
So, General Motors and its folksy CEO, Ed Whitacre, have paid off GM's TARP bailout money? What an incredible turnaround. If by "turnaround", though, you mean paying off your Visa card debt with your Mastercard.
All evidence points to the fact that GM is using a separate TARP line of credit to pay off its primary TARP debt.
During an April 20 hearing on Capital Hill, Sen. Tom Carper, (D-Del.) asked some pointed questions of Neil Barofsky, the “special watch dog” on the Wall Street Bailout, aka, TARP.
It’s good news in that they’re reducing their debt,” Barofsky said of the accelerated GM payments, “but they’re doing it by taking other available TARP money.”…
“It sounds like it’s kind of like taking money out of one pocket and putting in the other,” said Carper, who got a nod of agreement from Barofsky.
“The way that payment is going to be made is by drawing down on an equity facility of other TARP money.”
Senator Charles Grassley (R-Iowa) went off on the Obama administration and the TARP shell game in a letter sent to two-time tax cheat and tax collector-in-chief, Tim Geithner using Barofsky's testimony to level the credible claim that GM was not using GM earnings to pay off TARP debt but rather TARP funds from an escrow account at Treasury to make the debt repayments.
When these criticisms were put to GM’s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:
Question: Are you just paying the government back with government money?
Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we’d be able to pay this back.
Unbelievable. Dude actually wants some sort of recognition that GM was able to pay off tax payer-funded debt with... tax payer funds.
This is the first acknowledgement that we are aware of a shadow TARP. As if the publicly-known TARP wasn't bad enough there is a subterranean TARP that is backing the initial TARP.
This simply re-enforces our sentiment that we will never in our lives purchase a GM or Chrysler product. These people are straight-up gangsters. There is no other word to describe them and their actions to deliberately deceive and forcibly misuse U.S. tax payer dollars.
We believe this instance provides sufficient cover to get your hate on.
H/T: Hot Air
(UPDATE #1): This time, we lie! Much like GM's false claim that they have paid off its TARP debt with actual earnings, there is no actual update.
We originally posted this over the weekend, when readership is down a bit but we wanted to resurrect it during the week to highlight the sheer audacity of General Motors. The federal government is entirely complicit in what we can only tag as gangster capitalism. The government takeover and bankruptcy proceedings that screwed over the secured creditors in favor of the labor unions was executed in a thuggish manner and now the GM/federal government partnership openly displays their contempt for the American public by running an ad during the NBA playoffs patting itself on the back for a job well done.
We may re-run this post again next week. And the week after that. Whatever we have to do to ensure that we never forget what little regard this administration has for your interests and your tax dollars.
Frank Rich, Paul Krugman and the rest of the intelligentsia of this country may disagree with the politics of those who have opposed the bailouts but that they cannot at least understand where this anger may be coming from, again, speaks to a widening disconnect in this country between the taste-makers and those who are actually footing the bill for this fiasco.
(UPDATE #2): Reason TV's Nick Gillespie takes about as much time to explain the shell game that is General Motor's "paying off" its TARP debt as the GM commercial.
Again, the sheer gall that Government Motors has in running this outright lie will compel us to update this regularly or repost from time to time whether or not there is an actual update.
(UPDATE #3): The nation's paper of record is now on the beat.
AS we inch closer to a clearer understanding of the products and practices that unleashed the credit crisis of 2008, it’s becoming apparent that those seeking the whole truth are still outnumbered by those aiming to obscure it. This is the case not only on Wall Street but also in Washington.
Truth seekers the nation over, therefore, are indebted to Senator Charles E. Grassley, Republican of Iowa, who in recent days uncovered what he called a government-enabled “TARP money shuffle.” It relates to General Motors, which on April 21 paid the balance of its $6.7 billion loan under the Troubled Asset Relief Program.
G.M. trumpeted its escape from the program as evidence that it had turned the corner in its operations. “G.M. is able to repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse,” boasted Edward E. Whitacre Jr., its chief executive.
G.M. also crowed about its loan repayment in a national television ad and the United States Treasury also marked the moment with a press release: “We are encouraged that G.M. has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability,” said Timothy F. Geithner, the Treasury secretary.
Taxpayers are naturally eager for news about bailout repayments. But what neither G.M. nor the Treasury disclosed was that the company simply used other funds held by the Treasury to pay off its original loan.
The CBO estimates we will lose about $30 billion on the GM bailout. And in the article, GM officials are outrageously outraged that anybody would suspect that they are doing anything untoward with taxpayer money. Not that they are specifically denying doing anything untoward.
Greg Martin, a G.M. spokesman, said the company had made no misrepresentations about its repayment. “The bottom line is, our strong business performance has put us in the position that we don’t need these funds,” he said, referring to the cash in the escrow account. “G.M. is performing much better than anyone expected and that does represent a significant milestone for the company.”
And Ron Bloom, senior adviser to Mr. Geithner, bristled at Mr. Grassley’s criticism. “The Treasury Department has tried to be as straight as humanly possible,” he said in an interview. “We have never not been clear about exactly what we paid, exactly the terms of the investment. I’m finding it hard to find anyone obfuscating about this.”
(italics, ours)
They don't need the (TARP) funds... except that they need the funds to pay off the TARP debt.
We'll spare you the righteous indignation this time around because it's all there in black and white. A nice big F-you from General Motors leadership to the U.S. taxpayers.
(As promised, we are re-running this post from just over two years ago to remind everybody of just what an odious sham were the auto bailouts and in specific the manner in which the TARP funds (funds, by the way, that were never intended for the auto industry in the first place - remember, they were tabbed for the financial sector, only) were paid off. The thuggish history of this administration and its enablers needs to be recalled as often as possible prior to the November elections.)
(Please scroll to bottom for update)
So, General Motors and its folksy CEO, Ed Whitacre, have paid off GM's TARP bailout money? What an incredible turnaround. If by "turnaround", though, you mean paying off your Visa card debt with your Mastercard.
All evidence points to the fact that GM is using a separate TARP line of credit to pay off its primary TARP debt.
During an April 20 hearing on Capital Hill, Sen. Tom Carper, (D-Del.) asked some pointed questions of Neil Barofsky, the “special watch dog” on the Wall Street Bailout, aka, TARP.
It’s good news in that they’re reducing their debt,” Barofsky said of the accelerated GM payments, “but they’re doing it by taking other available TARP money.”…
“It sounds like it’s kind of like taking money out of one pocket and putting in the other,” said Carper, who got a nod of agreement from Barofsky.
“The way that payment is going to be made is by drawing down on an equity facility of other TARP money.”
Senator Charles Grassley (R-Iowa) went off on the Obama administration and the TARP shell game in a letter sent to two-time tax cheat and tax collector-in-chief, Tim Geithner using Barofsky's testimony to level the credible claim that GM was not using GM earnings to pay off TARP debt but rather TARP funds from an escrow account at Treasury to make the debt repayments.
When these criticisms were put to GM’s Vice Chairman Stephen Girsky in a television interview yesterday, he admitted that the criticisms were valid:
Question: Are you just paying the government back with government money?
Mr. Girsky: Well listen, that is in effect true, but a year ago nobody thought we’d be able to pay this back.
Unbelievable. Dude actually wants some sort of recognition that GM was able to pay off tax payer-funded debt with... tax payer funds.
This is the first acknowledgement that we are aware of a shadow TARP. As if the publicly-known TARP wasn't bad enough there is a subterranean TARP that is backing the initial TARP.
This simply re-enforces our sentiment that we will never in our lives purchase a GM or Chrysler product. These people are straight-up gangsters. There is no other word to describe them and their actions to deliberately deceive and forcibly misuse U.S. tax payer dollars.
We believe this instance provides sufficient cover to get your hate on.
H/T: Hot Air
(UPDATE #1): This time, we lie! Much like GM's false claim that they have paid off its TARP debt with actual earnings, there is no actual update.
We originally posted this over the weekend, when readership is down a bit but we wanted to resurrect it during the week to highlight the sheer audacity of General Motors. The federal government is entirely complicit in what we can only tag as gangster capitalism. The government takeover and bankruptcy proceedings that screwed over the secured creditors in favor of the labor unions was executed in a thuggish manner and now the GM/federal government partnership openly displays their contempt for the American public by running an ad during the NBA playoffs patting itself on the back for a job well done.
We may re-run this post again next week. And the week after that. Whatever we have to do to ensure that we never forget what little regard this administration has for your interests and your tax dollars.
Frank Rich, Paul Krugman and the rest of the intelligentsia of this country may disagree with the politics of those who have opposed the bailouts but that they cannot at least understand where this anger may be coming from, again, speaks to a widening disconnect in this country between the taste-makers and those who are actually footing the bill for this fiasco.
(UPDATE #2): Reason TV's Nick Gillespie takes about as much time to explain the shell game that is General Motor's "paying off" its TARP debt as the GM commercial.
Again, the sheer gall that Government Motors has in running this outright lie will compel us to update this regularly or repost from time to time whether or not there is an actual update.
(UPDATE #3): The nation's paper of record is now on the beat.
AS we inch closer to a clearer understanding of the products and practices that unleashed the credit crisis of 2008, it’s becoming apparent that those seeking the whole truth are still outnumbered by those aiming to obscure it. This is the case not only on Wall Street but also in Washington.
Truth seekers the nation over, therefore, are indebted to Senator Charles E. Grassley, Republican of Iowa, who in recent days uncovered what he called a government-enabled “TARP money shuffle.” It relates to General Motors, which on April 21 paid the balance of its $6.7 billion loan under the Troubled Asset Relief Program.
G.M. trumpeted its escape from the program as evidence that it had turned the corner in its operations. “G.M. is able to repay the taxpayers in full, with interest, ahead of schedule, because more customers are buying vehicles like the Chevrolet Malibu and Buick LaCrosse,” boasted Edward E. Whitacre Jr., its chief executive.
G.M. also crowed about its loan repayment in a national television ad and the United States Treasury also marked the moment with a press release: “We are encouraged that G.M. has repaid its debt well ahead of schedule and confident that the company is on a strong path to viability,” said Timothy F. Geithner, the Treasury secretary.
Taxpayers are naturally eager for news about bailout repayments. But what neither G.M. nor the Treasury disclosed was that the company simply used other funds held by the Treasury to pay off its original loan.
The CBO estimates we will lose about $30 billion on the GM bailout. And in the article, GM officials are outrageously outraged that anybody would suspect that they are doing anything untoward with taxpayer money. Not that they are specifically denying doing anything untoward.
Greg Martin, a G.M. spokesman, said the company had made no misrepresentations about its repayment. “The bottom line is, our strong business performance has put us in the position that we don’t need these funds,” he said, referring to the cash in the escrow account. “G.M. is performing much better than anyone expected and that does represent a significant milestone for the company.”
And Ron Bloom, senior adviser to Mr. Geithner, bristled at Mr. Grassley’s criticism. “The Treasury Department has tried to be as straight as humanly possible,” he said in an interview. “We have never not been clear about exactly what we paid, exactly the terms of the investment. I’m finding it hard to find anyone obfuscating about this.”
(italics, ours)
They don't need the (TARP) funds... except that they need the funds to pay off the TARP debt.
We'll spare you the righteous indignation this time around because it's all there in black and white. A nice big F-you from General Motors leadership to the U.S. taxpayers.
Remember, gang, General Motor's sagging fortunes aren't just a result of weak sales here stateside; they've got an entire European operation that is an additional millstone around its neck.
Three years into their forced marriage with GM, the American taxpayers have seen the value of their investment in GM deteriorate by approximately $24 billion, largely due to continuing European losses. Exposure in Europe has contributed to crushing the value of GM's stock due to its chaotic and failing Opel unit in Germany. While government, journalists and Wall Street sympathizers have given the Obama Administration and GM leadership an almost incomprehensible pass on this value destruction and massive loss (presumably due to the macro-economic nature of the crisis), it's time to call for the accountability that this new Board was supposedly going to deliver.
At one time, General Motors had an opportunity to sell off GM Europe so they could consolidate, trim some non-essentials, focus on core competencies, you know, the stuff that corporations do when they are in bankruptcy. Didn't quite happen that way:
Overlooked is the value-destroying, cash-sucking disaster that is GM Europe was packaged and ready for sale to new European buyers in 2009 before the new Obama GM Board of Directors slammed the brakes on the deal, throwing GM into its current value free-fall. In fact, the decision to not sell the Opel operations (which has not been profitable for more than a decade) in 2009 after GM cleared bankruptcy was the very first major decision of the new Obama Board. Had Opel been sold, GM stock would be much higher than it is today.
So, we weren't merely content to bailout an under-performing U.S. manufacturer, we were going to bail out those of Europe as well.
But the "new and improved" Obama Board of Directors, working mostly at the persistent lobbying and urging of the UAW's appointee, Steve Girsky (in photo), were naively convinced that Opel was simply a rough jewel in need of some new leadership (Opel fired its third leader in as many years a few weeks ago) and TLC from the brain-trust in Detroit. With his persuasive lobbying, the union's man Girsky convinced all but two of the Board members to vote to ditch the planned sale and hold onto this "gem" that has now contributed to the loss of about $24 billion of the American taxpayers' forced investment. Beyond the sheer magnitude of the value losses, fixing Europe has become an all-consuming distraction that is draining GM of vital and scarce resources.
Linked article describes how GM CFO Dan Amman hemmed and hawed during last quarter's earnings coference call and never came clean with respect to how much American taxpayer money was going towards the failing Opel and Peugot operations.
Your anger would be totally understandable given that a public-private entity is mum on how much of your scratch is being thrown around an entirely different continent let alone here in our own backyard.
So, with such dismal news for General Motors, what's in the offing? Another bailout?
President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.
This wouldn't surprise us. If their bailout efforts failed the first time around, by their reckoning, a second bailout is fully warranted. We hate to say it, but contrary to what you may have been told, these aren't terribly smart people. They just aren't. Smart people learn from their mistakes and there has been nothing in these last 3-1/2 years that has demonstrated that they have learned anything from their miserable failures in the U.S. economy.
Entrance question: Just how incompetent do they have to be that they cannot even make crony capitalism work?
Marc A. Thiessen in writing for the Washington Post helpfully explains that if Mitt Romney's private equity record is fair game then so should be Obama's public equity record. Through either the stimulus bill or the Department of Energy's loan program, the administration has invested billions of taxpayer dollars in private businesses. And how's that been working out?
33 million: The amount of money given to Raser Technologies to build a power plant in Utah. The company filed for bankruptcy protection in 2012 and owes $1.5 million in back taxes.
126 million: The amount of tax-payer dollars given to ECOtality for the installation of 14,000 electric car chargers. ECOtality’s own SEC filings, the company has since incurred more than $45 million in losses and has told the federal government, “We may not achieve or sustain profitability on a quarterly or annual basis in the future.”
98.5 million: The size of a loan guarantee to Nevada Geothermal Power (NGP) in 2010. The New York Times reported last October that the company is in “financial turmoil” and that “[a]fter a series of technical missteps that are draining Nevada Geothermal’s cash reserves, its own auditor concluded in a filing released last week that there was ‘significant doubt about the company’s ability to continue as a going concern.’ ”
3 billion (yes, that's billion with a "b"): the amount of tax-payer dollars given to First Solar in the form of a loan guarantee for power plants in Arizona and California. According to a Bloomberg Businessweek report last week, the company “fell to a record low in Nasdaq Stock Market trading May 4 after reporting $401 million in restructuring costs tied to firing 30 percent of its workforce.”
400 million: the amount of a loan guarantee given to Abound Solar, Inc. to build solar panel factories. Currently, the company has halted production and laid off 180 employees.
43 million: the size of the loan guarantee given to green-energy storage company Beacon Power. According to CBS News, at the time of the loan, “Standard and Poor’s had confidentially given the project a dismal outlook of ‘CCC-plus.’ ” In the fall of 2011, Beacon received a delisting notice from Nasdaq and filed for bankruptcy.
From linked article:
This is just the tip of the iceberg. A company called SunPower got a $1.2 billion loan guarantee from the Obama administration, and as of January, the company owed more than it was worth. Brightsource got a $1.6 billion loan guarantee and posted a string of net losses totaling $177 million. And, of course, let’s not forget Solyndra — the solar panel manufacturer that received $535 million in taxpayer-funded loan guarantees and went bankrupt, leaving taxpayers on the hook.
And our favorite numbers from this article:
71: the percentage of DOE grants and loans that went to “individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party.” This according to Peter Schweizer's book, "Throw Them All Out".
100: the number of criminal investigations that have been launched by the DOE's inspector general related to the department's green-energy program.
Here's some more on private equity firms from Democrat Lanny Davis:
Private equity firms often invest in distressed companies by putting in cash and cutting expenses in order to save a company that is already close to bankruptcy. Sometimes the investment works and the company and jobs are saved. And sometimes, to save the company, jobs need to be cut or wages and benefits reduced.
Does that sound familiar? It should. It’s called the General Motors bailout, widely touted by President Obama and Democrats as a success story, which it was.
Except that it wasn't. GM stock is currently trading at $22/share, down from the $33/share at its IPO. And that price will have to get up to $50/share in order to break even on the bailout. As it stands right now, we have lost billions to General Motors and we, most likely, will never get it back.
And one last thing regarding public equity and Obama's miserable track record regarding the same, next time you hear a Team O water carrier or someone from the administration itself pop-off about the people Romney laid off, remember this:
The Treasury Department encouraged automakers seeking TARP funds to rapidly close their dealerships, even though the plan contributed no specific savings to the companies and caused job losses at a time of mounting unemployment, according to a scathing new audit published Monday.
The report focuses on the plans by Chrysler LLC and General Motors Corp. to rapidly reduce their number of dealerships by about 25 percent each, and the role that Treasury played in encouraging the automakers to do so quickly instead of over the course of five years.
The audit was prepared by Neil Barofsky, a former federal prosecutor who now serves as special inspector general for the $700 billion Troubled Asset Relief Program.
Chrysler eliminated 789 dealerships in June 2009, and GM plans to wind down 1,454 dealerships by October of this year. The rationale behind those moves was that the old dealership network was too big, and that by closing some of the dealerships, the remaining ones would be more profitable and better positioned to re-invest in their businesses.
Wow. Kind of sounds like something Bain would've done.
A round up of news items, columns and blog posts that caught our attention this past week.
Once again, the Taiwanese, of all people, provide a summation of the American cultural zeitgeist:
Charles Krauthammer on the new TSA screening procedures? Not a big fan:
Don't touch my junk is the anthem of the modern man, the Tea Party patriot, the late-life libertarian, the midterm election voter. Don't touch my junk, Obamacare - get out of my doctor's examining room, I'm wearing a paper-thin gown slit down the back. Don't touch my junk, Google - Street View is cool, but get off my street. Don't touch my junk, you airport security goon - my package belongs to no one but me, and do you really think I'm a Nigerian nut job preparing for my 72-virgin orgy by blowing my johnson to kingdom come?
Oh, good, the Obama administration has another imaginary victory for taxpayers to celebrate.
As you've probably heard, there's quite a bit of hubbub surrounding the news that the administration's car company is going public.
President Barack Obama tells us that General Motors' IPO is proof that one of the toughest tales of recession "took another step to becoming a success story." Not "survival," but success. Taxpayers are going to make a profit, even!
Now, admittedly, success is a malleable concept. If by success we mean that General Motors still owes the government $43 billion — not including that piddling $15 billion it borrowed to fund its financial arm — with many analysts uncertain that it can ever flourish, we're home free.
Success will mean temporarily setting aside the fact that the Treasury actually lost billions on the IPO as it "bought" GM stock at inflated prices. To break even on the freshly printed money taxpayers are "getting back" will probably mean GM needs to double in value over the next year to make us whole.
So, Team O strong-arms secured creditors and bond holders, shoving them behind the unions at the bankruptcy buffet, they lie about how they are paying off the TARP loan, lose billions on the IPO and their "star" attraction is an expensive, yet heavily-subsidized lemon that no one wants. Yep, highly successful all around.
Iowahawk pens some new lyrics to a classic standard:
And you know who else hates the new TSA rules? TSA screeners, naturally.
"It is not comfortable to come to work knowing full well that my hands will be feeling another man’s private parts, their butt, their inner thigh. Even worse is having to try and feel inside the flab rolls of obese passengers and we seem to get a lot of obese passengers!"
Not doing much for morale.
"Molester, pervert, disgusting, an embarrassment, creep. These are all words I have heard today at work describing me, said in my presence as I patted passengers down. These comments are painful and demoralizing, one day is bad enough, but I have to come back tomorrow, the next day and the day after that to keep hearing these comments. If something doesn’t change in the next two weeks I don’t know how much longer I can withstand this taunting. I go home and I cry. I am serving my country, I should not have to go home and cry after a day of honorably serving my country."
We've said it before but without exception, TSA screeners have been the epitome of professionalism and efficiency in our travels around the country since 9-11. Homeland Security leadership would do well to rethink the current screening policies as they are accomplishing nothing but pissing off the public and providing a disincentive to any effective screening that is performed.
Is Chris Christie a "true conservative"? Shane Atwell does yeoman's work in breaking down an otherwise assertion made by Conservative New Jersey, here.
Thin slicing: Him cheezing off the right people should count for something, right?
And finally, B-Daddy on the Republicans' unity with respect to earmarks:
Now this is in fact a small, but symbolic victory. I have always felt that earmarks were "the gateway drug" to Congressional wasteful spending. This is only a rule that governs Senate Republicans, but it gives them a moral advantage over the Democrats in the Senate. Further, it shows that the Republican establishment can be made to listen. Until Monday, McConnell had been opposed to ending earmarks, but he realized that in these times, it was important to listen to the voters.
Our trip to parts of the desert southwest has been delayed while we idle in Kanab, Utah while the clutch on our truck gets fixed, so if nothing else it's a chance to reconnect and see what's going on out there.
Alternate headline: If this is success, we'd hate to see failure
The Obama campaign is fond of saying that they saved General Motors. A political victory perhaps for a dubious definition of "saved" but consider at what cost to the tax-payer and that of our free-market system here in America did this victory come.
On this blog, we've been railing against the auto bailout for years and the following 6 minute video from the Center for Freedom and Prosperity does a nice job of covering why it is that this bailout is/was not a success and why it was and has become such a horrible idea in 4 points:
1. Taxpayers got fleeced (if GM stock were sold today, we'd all be out $25 billion)
2. President Obama gave favors to his union supporters (while other creditors got shafted)
3. When government picks winners and losers, we all lose. (Expending public capital and political pressure to build products the consumer does not want, causes ripples all up and down the auto manufacturing supply chain).
4. The costs are unseen (Moral hazard! Poor performance will be rewarded!)
Yeah, this is something Obama could've laid at Bush's feet, instead he doubled down and proceeded with the bankruptcy cramdown and ensuing favors to his union buddies at the expense of secured creditors which may all fall apart in court due to a backroom deal hatched by General Motors to meet the administration demands for a quick bankruptcy which was kept hidden at the time from the bankruptcy judge.
General Motors and Chrysler should've been allowed to enter bankruptcy under normal means which would've forced them to settle with their creditors while keeping the doors open while they restructured their organization and union deals. Instead, we have this unholy mess as a reward for bad business practices while sticking the tax payer for tens of billions of dollars.
Remember all this next time you here how the administration "saved" the U.S. auto manufacturing industry and how GM and Chrysler now represent "success" stories.
By the standards of Big Media and the learned punditry, the opposition to the President’s agenda represents a dangerous swerve down the populist turnpike that is fraught with mindless anger, fear-mongering and general untoward behavior.
Let’s just briefly look back at where we were and where we currently are. By the numbers:
1. After some warm-up acts in the spring of ’08, President Bush kicks off Bailout Nation back in the fall with the $700 billion TARP legislation that was designed to buy up the bad assets that Wall St. had accrued chiefly through the housing market. Or was it to re-capitalize these firms? We can’t keep it straight. And this doesn’t include the hundreds of millions of dollars that were pumped into government-sponsored mortgage underwriters Fannie Mae and Freddie Mac that is all completely off the books.
2. President Obama kicks-in Bailout Nation 2.0 by signing the $787 billion Porkulus bill into law that stimulates jack squat. On the heels of this, the Obama administration initiates a hostile take-over of Chrysler and General Motors which involved firing the CEO of General Motors and the shafting of the secured creditors in favor of the unions.
3. A lot of other demand-side statist tomfoolery (see: Cash for Clunkers and Home Owner’s Assistance Program) takes place in addition to the House passage of the economically ruinous cap and trade bill and the continued force-feeding of a government take-over of the health care industry legislation that the majority of Americans don’t want.
4. During all this, the American public reacts: Whiskey-Tango-Foxtrot?
5. Many of those same people voluntarily organize in order to exercise their Constitutional rights of freedom of assembly and freedom of speech with the purpose of expressing their displeasure with the current state of affairs. This results in a blunting and/or stalling of what is essentially an advancement in economic fascism in this country including some highly unlikely electoral upsets (see: New Jersey, Virginia and Massachusetts) that only re-enforces the notion of the American public’s general dissatisfaction.
6. The Media/Government industrial complex labels these people racist and un-American.
7. These people ignore these charges and repeat steps 4 and 5.
If this all be “populism” then so be it. We, however, simply see it as an exercise in democracy.
You overreach and attempt to extend the influence and power of the federal government beyond the point that the American people are comfortable with, you get your ass kicked. This isn’t rocket science and this backlash sure as hell isn’t motivated out of bigotry or any un-American sentiment, quite the contrary.
That the learned class in this nation willfully ignore these facts is an embarrassment as it is these very taste-makers that should be at the forefront of critiquing this assault on liberty and freedom instead of cheerleading for it.
It appears that shoving aside first-in-line creditors in favor of auto worker unions during the great U.S. car manufacturer bankruptcy cramdown of 2009 wasn't the only shenanigans that were pulled by the Obama administration.
A backroom deal hatched by General Motors during the auto bailout to fulfill the Obama administration’s demand for a quick bankruptcy could be reversed, draining the automaker of nearly all of its cash on hand and leaving it in worse shape than it was when it collapsed in 2009.
As GM teetered on the edge of bankruptcy in June 2009, it cut a $367 million “lock-up agreement” with several major creditors in order to prevent its Canadian subsidiary from going under. The move spared the subsidiary from fulfilling the $1 billion debt it owed the creditors—major hedge funds—ensuring that GM would not have to face bankruptcy courts in two nations, which could have delayed the company’s recovery.
The trustee for (old GM) creditors shortchanged by the government-driven bankruptcy are now suing the hedge funds in a move that could undo the bailout.
“Many U.S. creditors waived their rights to object because the government wanted to push through the bailout for political reasons,” risk analyst Chris Whalen said. “If they had continued through normal channels, they could have easily been in bankruptcy for five years. So they made sure these issues were not adequately briefed before the court.”
The GM that exited bankruptcy was radically different than the one that entered. The Treasury Department arranged for the company to split into Motors Liquidation Co., known as “old GM,” and created a “new GM” with the help of $30 billion from American taxpayers. Judge Robert Gerber, who approved the sale with little hesitation, could now reverse the entire auto bailout—and overturn one of President Barack Obama’s signature achievements.
“When I approved the sale agreement and entered the sale approval order I mistakenly thought that I was merely saving GM, the supply chain, and about a million jobs. It never once occurred to me, and nobody bothered to disclose, that amongst all of the assigned contracts was this lock-up agreement, if indeed it was assigned at all,” Gerber said in July.
Industry experts say GM should be very concerned with the judge's reaction to the deal.
The judge does not have line-item veto power which means the whole government-run bankruptcy deal could fall apart if this thing goes to court.
The U.S. and Canadian governments' desire to ram this thing through as quickly as possible without harming the pensions of the unions may very well come back to haunt them leaving General Motors in worse shape then they were in 2009.
Crony capitalism is a pejorative term describing an allegedly capitalist economy in which success in business depends on close relationships between businesspeople and government officials. It may be exhibited by favoritism in the distribution of legal permits, government grants, special tax breaks, and so forth.
outwresting, or exaction is a criminal offense which occurs when a person unlawfully obtains either money, property or services from a person, entity, or institution, through coercion. Refraining from doing harm is sometimes euphemistically called protection.
Well, that didn’t take long…
Rep Barney Frank (D-Mass.) won a stay of execution on Thursday for a General Motors plant in his district that the automaker had announced it would close.
No other lawmaker has managed to halt the GM ax. As chairman of the House Financial Services Committee Frank oversees the government's bailout program, known as TARP. Frank's staff said the lawmaker spokes with GM CEO Fritz Henderson on Wednesday and convinced him to keep the Norton, Mass. plant open for at least 14 months.
"I greatly appreciate General Motors' willingness to take into consideration the wider needs of the company and especially the community," Frank said in a statement. "Keeping the facility open for this extra time gives workers a chance to look at other opportunities, while at the same time continuing to provide for their families."
Colorful language like "f... the UAW" which is, coincidentally, the title of one of the chapters in Rattner's book of which he thinks everybody is paying to much to much attention to Rahm's cursing.
He says he hoped the tale would show how bold moves taken by the Obama administration saved the auto industry overall from an imminent collapse. But instead, he says, people are focusing on juicy quotes, such as when White House Chief of Staff Rahm Emanuel dismissed concerns of the United Auto Workers union, a staunch administration ally, with a colorful "f ——— the UAW."
"It was disappointing for me to have people focus on a phrase that I put in to humorize things, and not the meat of the book," Rattner says.
Maybe the reason people are not paying any never mind to the rest of the book is because, if the USA Today account is to be believed, it's one big fat lie.
But Rattner, a lifelong Democrat, thought it would prove that there were no sacred cows in the Obama administration. Even though the UAW is a longtime Democratic party stalwart, he says Obama made it clear that union workers, CEOs, bondholders, dealers, suppliers and anyone else with a stake in the industry would have to sacrifice.
If by sacrifice, Rattner means the UAW got to cut to the head of the line in front of secured creditors and others that would be served ahead of the UAW when it came to carve-up and divvy-out the scraps after the restructuring of General Motors, then yes, everybody did indeed make a sacrifice.
Combine this with GM CEO, Ed Whitacre, flat-out lying about the source of their TARP repayments (simply another line of TARP credit), and the whole sordid GM affair is nothing more than a bunch of lying liars lying about this big lie of a bailout funded on the backs of the American taxpayers.
And now we are finding out that the General Motors Volt electric car really isn't as electric as they originally led us to believe.
Our blog buddy, Harrison, over at Capitol Commentary has the goods including a run down of the hundreds of millions of dollars that have been poured into General Motors in the form of TARP loans, grants and subsidies both here and abroad to foreign companies to help, in part, produce this fraud of a vehicle.
Recall how Team O wants to make the General Motors bailout, the one that will cost taxpayers tens of billions of dollars when all said and done, a centerpiece of their re-election campaign and how GM isn't, for obvious reasons, thinking that is not such a hot idea? Well, chalk up yet another reason why bringing attention to such a smashing success may backfire.
New emails obtained by The Daily Caller contradict claims by the Obama administration that the Treasury Department would avoid “intervening in the day-to-day management” of General Motors post-auto bailout.
These messages reveal that Treasury officials were involved in decision-making that led to more than 20,000 non-union workers losing their pensions.
Republican Reps. Dan Burton and Mike Turner say that during the GM bailout, Treasury Secretary Timothy Geithner decided to cut pensions for salaried non-union employees at Delphi, a GM spinoff, to expedite GM’s emergence from bankruptcy.
At a Wednesday hearing, the House Oversight Committee’s Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending started pushing the Treasury Department for answers on the effects of the bailout and on how much of a role the department played in picking winners and losers.
The key point of the Wednesday hearing was to show that the Obama administration advised GM on how to eliminate the Delphi workers’ pensions. The evidence suggests Geithner’s team played a significant role in that process, despite claims to the contrary.
In 2009 congressional testimony, senior Obama administration official Ron Bloom said the president told the Treasury Department to stay out of the management of these companies and downplayed any administration intervention.
“From the beginning of this process, the President gave the Auto Task Force two clear directions regarding its approach to the auto restructurings,” Bloom said then. “The first was to behave in a commercial manner by ensuring that all stakeholders were treated fairly and received neither more nor less than they would have simply because the government was involved. The second was to refrain from intervening in the day-to-day management of these companies.”
We know that first directive was a crock as the unions were shoved to the head of the line ahead of secured creditors in the bankruptcy divvy-up and now it looks like the second was not adhered to either as that noted captain of industry and business tycoon, Timothy Geithner, was wacking pensions in order to hasten an exit from bankruptcy.
The exchanges go on to clearly demonstrate that the administration had a controlling stake in GM’s management timeline.
Borst replied that GM had not “begun conversations with the UAW pending hearing back from you and the PBGC. We can begin that dialogue but our reading of the benefit guarantee is clear that it’s for the benefit of the retirees and not the PBGC. The UAW may not be available to us this week as GM is in the summer shutdown.”
Feldman responded by reminding Borst the steps required to eliminate Delphi’s pension plans.
“Keep in mind we need the PBGC’s help to terminate this plan so we will have to deal with the PBGC,” wrote Feldman. “If you think there is a way to cause its unilateral termination (outside of Delphi going down an 1113 process) let me know.”
Team O will want to take credit for saving a couple of heartland American institutions and the domestic auto industry along the way but the record will show that this was a hostile take-over with the government wielding unprecedented powers in a private sector business to curry favor with the unions and where that government-GM partnership will lose billions of dollars while pushing a heavily-subsidized technology that nobody's buying right now and which may not even be any good for the environment and then turn around and lie about how it is they paid off the loan they received from the Feds. For that you are to be thankful.
Yeah, sounds like a record to run on.
* The dreariness of this post demanded we do something to cheer it up. So we did.
Steve Rattner, the man tabbed to head up the Obama regime's automotive task force, ostensibly an oversight committee for government-owned and operated General Motors and Chrysler, has been making the rounds of late trying to convince everyone of how swell the government take-over of the two aforementioned companies is coming along.
With great interest we read the article to see if he would get around to addressing the lie peddled by GM CEO, Ed Whitacre, that claimed on nationally-televised commercials no less, that GM had paid off its TARP loan. We covered this in You Lie!, where the reality of the situation is that they used a separate TARP fund to pay off the original. Rattner does indeed address the issue in about the only fashion you can when you've been caught red-handed making completely bogus claims. Here are the two money paragraphs (with intermittent commentary):
Consequently, the U.S. Treasury is well on its way to recovering most of the $81 billion that the government invested in the auto sector to prevent its collapse. (That includes money for other auto-related entities, such as the finance companies. Chrysler itself got around $8 billion from the Obama administration and $4 billion from the Bush administration.) Not surprisingly, partisans on both sides have elasticized the facts: GM has been proclaiming in ads that it has paid back the government loans "in full." While literally correct, this statement omits the fact that most of the government's investment in GM is in stock that it still holds.
(italics, ours)
Classic deflection. Belittle the argument because you were getting it from both sides. And in "literally correct", we suppose he's owning up to being a straight up liar because we don't know what stake the government still has in GM has to do with using your Visa card to pay off you MasterCard.
More:
Meanwhile, conservatives such as Sen. Charles Grassley, the ranking Republican on the Finance Committee, maintain that GM has paid back the government with government money. That's true, but only technically. We provided GM with a cash reserve -- to protect taxpayers' investment in the case of a prolonged auto recession -- that has now proved unneeded. The fact remains that the nation's largest automaker has outperformed our expectations -- increasing the amount of money that the government is likely to recover.
(italics, ours)
Translation: The charge that we used separate TARP money to pay off the original TARP loan is true only if you believe that we set up, in case of a prolonged recession and in order to protect the taxpayer, a cash reserve consisting of... taxpayer money.
Unreal.
From our original post which was later updated:
We originally posted this over the weekend, when readership is down a bit but we wanted to resurrect it during the week to highlight the sheer audacity of General Motors. The federal government is entirely complicit in what we can only tag as gangster capitalism. The government takeover and bankruptcy proceedings that screwed over the secured creditors in favor of the labor unions was executed in a thuggish manner and now the GM/federal government partnership openly displays their contempt for the American public by running an ad during the NBA playoffs patting itself on the back for a job well done.
And Rattner only continues flipping the bird at the American public with these sort of articles.
In less than a year, General Motors Co. has roared back from bankruptcy to a quarterly profit. Now comes the hard part: Sustaining the income and repaying billions of dollars in government aid.
There are signs that GM is on track to do just that. Revenue is up 40 percent over the first quarter of last year. U.S. sales rose 17 percent for the quarter, and the automaker made an operating profit in North America, which had been a cash incinerator. Units in Asia and Latin America posted strong numbers, too.
As a result, the automaker announced Monday, its net income rose to $865 million, a dramatic reversal from the $6 billion the company lost in the same period last year.
"Today's news was wonderful, and even better than we ever expected to be this far in the post-restructuring period," said Steven Rattner, former head of the Obama administration's Auto Task Force.
And we should believe all this because..? GM had no problems last month trotting out their CEO and flat-out lying to the American public regarding the true nature of Government Motor's claim they had repaid, in full, their share of the TARP bailout loan (they simply used another line of TARP credit to do so).
We note that an earlier version of this story from yesterday morning failed to point this out so we give credit to this version for broaching it... sort of.
Some experts were skeptical. James Schrager, professor at the University of Chicago Graduate School of Business, said GM has a history of making boastful claims, only to disappoint. A recent television ad in which CEO Ed Whitacre declared that the company had repaid its government loans in full, with interest, was misleading, he said.
(italics, ours)
It was not misleading in any way. It was a flat-out lie.
To a larger point, though, when the government owns 61% of GM stock and was caught red-handed cooking the books, what exactly does turning a profit of $865 million mean? And probably more germane to this exercise, when that same government that owns GM can print money to its heart's content, of what real significance and meaning are balance sheet losses?
P.S. Stever Rattner, who wrote one of the most self-serving articles we've ever read, will be penning a book on how Team Obama rescued General Motors. To say his book will lack credibility is to understate things a tad.
If Gail Collins of the New York Times lent the legacy media's hand in bringing down the curtain on Hopenchange last week, then a pro-Obama super-PAC did its part with this ad that somehow affixes blame for the cancer and death of a laid-off steel worker's wife to Mitt Romney.
Playing this disgraceful angle is an indication that desperation is in the air as even CNN finds itself somewhat perplexed that the ad was so easy to deconstruct.
Exit question: A man who wasn't even with the company when the layoff ocurred is somehow more responsible for providing healthcare insurance for that family than the man of the house?
Congratulations, sir. You are the male flip-side to Obama's composite statist love-child, Julia; a wholly dependent entity of the state.
Tangentially related: Recall back in June, Delphi, a parts manufacturer for General Motors, finally got their hands on documents from the federal government so that they could proceed with their lawsuit against the federal government for having their pension and healthcare plans terminated.
It would appear from obtained emails, that the Treasury Department was directly responsible for these actions.
Emails obtained by The Daily Caller show that the U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company.
The move, made in 2009 while the Obama administration implemented its auto bailout plan, appears to have been made solely because those retirees were not members of labor unions.
The internal government emails contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.
Delphi, a 13-year old company that is independent of General Motors, is one of the world’s largest automotive parts manufacturers. Twenty thousand of its workers lost nearly their entire pensions when the government bailed out GM. At the same time, Delphi employees who were members of the United Auto Workers union saw their pensions topped off and made whole.
Testimony from White House officials maintained that the decision to terminate the pensions was made by the rather ironically-named Pension Benefit Guaranty Corporation (PBGC), a goverment agency that handles private-sector benefit issues whose charter states it acts independently in the representation of pension beneficiary interests.
(ed. note: how far away from the concept of limited government are you when you have a government agency called a "corporation"?)
The emails suggest that the PBGC was acting at the behest of the Treasury Department and the White House.
Exit question Pt. II: To employ the logic held in the ad above, how many sick and dead Delphi employees are the Obama administration now responsible for?
And all this time, you thought the Obama administration was reflexively opposed to pension reform.
General Motors has told 1,300 employees at its Detroit Hamtramck that they will be temporarily laid off for five weeks as the company halts production of the Chevrolet Volt and its European counterpart, the Opel Ampera.
“Even with sales up in February over January, we are still seeking to align our production with demand,” said GM spokesman Chris Lee.
Lee said employees were told Thursday that production would put on hold from March 19 to April 23.
The Chevrolet Volt, an extended-range electric car, is both a political lightning rod and a symbol of the company’s technological capability.
Chevrolet sold 1,023 Volts in the U.S. in February and has sold 1,626 so far this year.
In 2011, Chevrolet sold 7,671 Volts, but fell short of its initial goal of 10,000.
In a true free market, an auto manufacturer would read the hand-writing on the wall and most likely pull the plug on a sedan that stickers at $40,000 and which possesses sales figures that anemic.
Of course, this is anything but a free market scenario as the federal government after having bailed out General Motors with tens of billions of your dollars is still partnered with GM and on top of the $7,000 rebate (again, your tax-dollars), The Mackinac Center for Public Policy estimates that the actual cost-per-car of each Volt, once all the federal subsidies are factored in, comes to $250,000 or $3 billion, total.
If auto manufacturing and financial institutions in this country are deemed "too big to fail", you better believe that the bailouts that "rescued" those same outfits are as well.
Just think: tens and tens of billions of your tax dollars and years and years later chasing the impossible dream, GM might just get this Volt thing figured out.
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