Auto Bailout Cartoon of the Day

GM can't sell their highly subsidized electric cars.  I wonder why...

Auto Bailout Video of the Day

The ObamaVolt (be sure to read the captions at the bottom):

Auto Bailout Video of the Day

Somebody had to do it:

Media Bias Story of the Day

Yesterday the liberal news networks were all abuzz with the news that Mitt Romney's old firm had consulted with Obama on the auto bailout.  Today...not so much (from CNBC):

A previous story incorrectly reported that Mitt Romney's former firm, Bain & Co., was part of a team of consulting companies that advised President Barack Obama on a decision to shutter car dealerships during the auto bailout.

Bain & Co. said it has no connection to the "Bain Consulting" firm referenced in government documents.

Romney hasn't worked for Bain for over 20 years, but everything Bain has done since then will be blamed on him, even if it's the wrong Bain.  This is the Democrat playbook at work as they coordinate their stories with the liberal media.

As we all know, if an accusation is made against the Democrat the media will research it, demand verification of every fact, and then still try to kill it.  If an accusation is made against a Republican the media will run it immediately, without verification, and should it be proven false the correction will be conveniently hidden away where no one is likely to see it.

Carmakers Rethinking Their Plan to Build Cars Nobody Wants

Since every Chevy Volt costs taxpayers about $250,000, perhaps a little introspection on the part of the car companies would be a good idea:

The US auto industry remains unsold over the future of "green cars" such as electrics and hybrids, as carmakers struggle with the first steps in a market most agree shows promise over the long term.

Automakers wheeled out a variety of new hybrids and plug-in electrics at the annual Detroit auto show this week, touting their great energy savings along with new, freshened designs.

But despite that apparent commitment, behind the scenes, the manufacturers remain split between doubts and optimism over their potential.

Ten years after the Toyota Prius hybrid swept into the market, only about three percent of all cars sold in the United States are electric or gas-electric hybrids, said David Cole, director of the Center for Automotive Research.

"Initially there was probably some excessive exuberance about the green auto," he told AFP.

"But the economics are not attractive yet for the average consumer."

Ya think?

Nissan has sold only 9,700 of its all-electric Leaf in the US market, and General Motors has sold just 8,000 of its rechargeable hybrid the Volt since its launch at the end of 2010, below the targeted 10,000.

The Volt became the object of scrutiny in recent weeks after tests by US authorities saw batteries in three cars catch fire.

The "green" car industry is a classic example of what goes wrong when the government tries to pick winners and losers. The government decided that the green car business would be the winner, but in order to make that happen had to so ridiculously subsidize their manufacture that we now have a car that's roughly equivalent to a Toyota Corolla but costs the same as a Bentley Mulsanne. That's just stupid on every level.

The market doesn't want it.  The market wants SUVs and Minivans and sporty coupes.  Build those and the buyers will come.

As of Today American Taxpayers Have Lost $15 Billion Bailing Out GM

There's a website which tracks the current taxpayer losses on GM based on current stock prices.  You can find it here.

Has the Auto Bailout Affected Buying Decisions?

Yes it has, with nearly 1 in 5 Ford buyers saying they bought Fords specifically because the company didn't take the bailout (from Don Surber):

The Rasmussen Poll asked likely voters: “Have You or Anyone in Family Bought Car from Ford Because Didn’t Take Government Bailout?”

19% said yes, including 33% of the people 18-29 — and 28% of black voters — and 32% of government workers.

Those are three prime electoral blocs for President Obama and a significant percentage of them are buying Ford because of the bailout. To be fair, this began on President Bush’s watch but President Obama enthusiastically embraced the bailout and bragged about its “success,” although the money has not been completely paid back.

25% said yes when asked “Has Bailout and Government Takeover of GM Caused You or Anyone You Know to Avoid Buying GM Car?”

The demographics varied little, however.

Rasmussen also asked: “Does Fact that GM Took Bailout Money Make You More/Less Likely to Buy GM Car?”

50% said less likely — just 4% said more likely.

To the question “Ford Didn’t Take Bailout Funding. Make You More/Less Likely to Buy from Ford?” — 51% said more likely and 12% said less likely.

I can't see myself buying GM or Chrysler again, not with the unions having been handed a large share of company ownership at the expense of bondholders. That's not the American way that I believe in.

White House Pressures Ford to Pull Ad Critical of Auto Bailout

It was a great ad too and got a lot of media attention, so if the White House thinks this will make it go away, they're seriously delusional:

As part of a campaign featuring "real people" explaining their decision to buy the Blue Oval, a guy named "Chris" says he "wasn't going to buy another car that was bailed out by our government," according the text of the ad, launched in early September.

"I was going to buy from a manufacturer that's standing on their own: win, lose, or draw. That's what America is about is taking the chance to succeed and understanding when you fail that you gotta' pick yourself up and go back to work."

That's what some of America is about, evidently. Because Ford pulled the ad after individuals inside the White House questioned whether the copy was publicly denigrating the controversial bailout policy CEO Alan Mulally repeatedly supported in the dark days of late 2008, in early '09 and again when the ad flap arose. And more.

With President Barack Obama tuning his re-election campaign amid dismal economic conditions and simmering antipathy toward his stimulus spending and associated bailouts, the Ford ad carried the makings of a political liability when Team Obama can least afford yet another one. Can't have that.

The ad, pulled in response to White House questions (and, presumably, carping from rival GM), threatened to rekindle the negative (if accurate) association just when the president wants credit for their positive results (GM and Chrysler are moving forward, making money and selling vehicles) and to distance himself from any public downside of his decision.

I'm guessing that if we're able to dig deeper will find threats of union violence and strikes against Ford at the prompting of the White House. That's the Chicago way and the union thug way.  And as it turns out the bailout agreement does not allow strikes against GM or Chrysler, only Ford.

My New Favorite Car Commercial

Ford nails Government Motors and Chrysler:
Zing!

Obama's Labor Secretary Buys Car Made in Canada

Take that United Auto Workers!

To show her support for American workers, President Obama's labor secretary, Hilda Solis, has junked the standard black limo and purchased a new Chevrolet Equinox to ride around Washington in. The problem: the crossover SUV is built and assembled in Canada from parts also made in Canada.

Solis proudly arrived at a media breakfast hosted by the Christian Science Monitor today in the shiny silver vehicle, which she has dubbed the "bullet." She was asked about why she traded the standard-issue limo for the SUV. "What better example could I set if I encouraged my staff to go and purchase and seek how we could acquire a vehicle that would for me would send a signal that we're for supporting our American workers, American-made products, fuel efficient as well," she told the Monitor's Dave Cook, who provided this video of her answer...

The car is made at two Canadian plants and has been so popular that General Motors has been hiring more workers in Canada to keep up with demand.

Perhaps the unions at the Detroit Labor Day rally can bring that up during Obama's speech.

GM's Shell Game

GM is delivering lots of cars these days - not to buyers but to dealer lots where they sit in all their taxpayer-subsidized splendor:

Hidden deep in today’s disappointing GM November sales release is a number that all GM longs may want to quickly forget, or else pay serious attention to. But first, earlier today, GM reported slightly disappointing sales numbers: the newly IPOed company sold 168,739 cars in November, a 11.4% increase to November 2009, which came in below expectations of a 13% rise. That’s mostly noise. What isn’t, however, is the linear rise in GM’s auto inventory safely stashed away at dealers, i.e., unsold….

It is obvious that beginning in July, GM has started an aggressive channel stuffing program whereby it offload tens of thousands of cars (over 110,000 since July) on dealer lots, hoping these will get sold somehow, at some price, all the while dealers enjoy taxpayer subsidized floorplan leases which allows them to hold nearly infinite inventory. If and when the liquidation event takes place who cares? After all the company is now public and has managed to massage it artificial sales numbers sufficiently to fool investors that there is actual end demand for its cars.

All those of you holding those IPO shares must be really proud.

Auto Bailout Video of the Day

GM is thanking the taxpayers for bailing them out:

Political Line of the Day

From David Letterman:

Q: What was the most positive result of the "Cash for Clunkers" program?
A: It took 95% of the Obama bumper stickers off the road.

The rest of them are being peeled off by the car owners.

Cash for Clunkers...Clunked

As expected the Cash for Clunkers program did nothing more than pull demands forward, thus ensuring a collapse in demand in the months following the program:

We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended. The effect of the program on auto purchases was significantly more short-lived than previously suggested. We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.

A lot of people who were in position to profit from this did so, and good for them. However, if the purpose was to stimulate the economy over a long period, it didn't happen.

Former Obama Czar: Obama Was Out to Get the Car Companies

This administration has been in office long enough that former members are now starting to come out with tell-all books:

Former Obama administration car czar Steven Rattner is coming out with a new book that depicts him swashbuckling through the financial crisis and also shows Obama as "out to get" the car companies and the administration making political decisions about how to deal with bankrupt automakers GM and Chrysler....

Key points from the article and excerpts:

-When Obama was told of the plan to pay GM CEO Rick Wagoner a $7.1 million severance package after Obama ordered that he be sacked, Rattner writes: "Suddenly I felt that I was indeed in the presence of a community organizer..."

-Rattner describes presidential political adviser David Axelrod coming to car meetings armed with poll data to support the takeover and Chief of Staff Rahm Emanuel identify Congressmen in whose districts large Chrysler facilities were located.

-"[Obama's economic team] veered dangerously close to having the government take control of the two most troubled banks, Bank of America and Citigroup."

-"If his team had linked arms with the outgoing administration, as President Bush's advisers had proposed, billions of dollars could well have been saved."

-Rattner says Chief of Staff Rahm Emanual dictated Treasury Secretary Tim Geithner's schedule, public appearances and staff selections.

-He says Obama economic advisers Larry Summers and Austan Goolsbee and FDIC Chair Sheila Bair as enemies who slowed down decision making with infighting

-Rattner said Obama was frustrated with the auto companies from the start: "Why can't they make a Corolla?" he has Obama asking.

There was never any doubt in my mind that Obama was "out to get" the car companies, and then give what was left of them to the unions. Mission accomplished.

Auto Sales Collapse

From Bloomberg:

U.S. auto sales in August probably were the slowest for the month in 28 years as model-year closeout deals failed to entice consumers concerned the economy is worsening and they may lose their jobs.

How soon until Chrysler and GM need more taxpayer funds to stay alive?

Don Surber reminds us what Detroit was selling back in 1982 and it wasn't pretty.

Government Motors Making Political Donations to Racist Organization

A company which exists because of taxpayer's money shouldn't be making political donations to anyone, but especially not to organizations whose membership is restricted by race:

When General Motors went through bankruptcy last year, it suspended its political donations. Now that it's owned by the U.S. government, it's donating to lawmakers' pet projects again.

The carmaker gave $41,000 to groups associated with lawmakers, the vast majority of it -- $36,000 -- to the Congressional Black Caucus Foundation, the company reported on a disclosure form last week. The CBC Foundation is a charity with 11 members of the Congressional Black Caucus on its board.

"We've always given to the Congressional Black Caucus Foundation as far back as anyone can remember," said Greg Martin, GM spokesman. "Our commitment remains unabated, and we continue to be a proud supporter of their work to advance economic development in communities throughout the U.S."

So, are they planning to give to the Aryan Nation or La Raza too? Might as well hit the racist trifecta.

The Racial Politics of the Auto Dealer Closings

It's becoming clearer that race plays a huge role in the "post-racial" presidency of Barack Obama.  It even had a role in the decisions on which GM and Chrysler dealers to close:

The Obama administration, already under fire for unprecedented allegations of racial bias, faces a new bias claim from a most unlikely source: one of the administration's own inspectors general.

Decisions on which car dealerships to close as part of the auto industry bailout -- closures the Obama administration forced on General Motors and Chrysler -- were based in part on race and gender, according to a report by Troubled Asset Relief Program Special Inspector General Neal M. Barofsky.

[D]ealerships were retained because they were recently appointed, were key wholesale parts dealers, or were minority- or woman-owned dealerships. [Emphasis added.]

Thus, to meet numbers forced on them by the Obama administration, General Motors and Chrysler were forced to shutter other, potentially more viable, dealerships. The livelihood of potentially tens of thousands of families was thus eliminated simply because their dealerships were not minority- or woman-owned.

As has been widely reported, the Inspector General's study skewered the Obama Gang for strong-arming the companies into closing 2,000 dealerships, costing an estimated 100,000 people their jobs during a recession.

But the news media has ignored key elements of Barofsky's report -- elements that are far more damaging, if possible, to Obama. As we reported earlier in the week, a top Obama official, manufacturing czar and "Auto Team" leader Ron Bloom admitted that the dealerships could have been kept open, saving those jobs, "but that doing so would have been inconsistent with the President's mandate for 'shared sacrifice.'"

Keep reading the you'll learn why so many rural dealership were closed while urban dealership were kept open. Politics? You bet.

And throwing 100,000 people out of work didn't save the car companies a dime and may have actually cost them money because of the perception of a failing company. It was all for show.

Harry Reid: Bailing Out Ford's Competitors Saved Ford Too

Gee whiz, what new level of stupid has Harry Reid hit this time?

The Senate's top Democrat argued Ford Motor Co. probably would have collapsed if the government hadn't bailed out its top two competitors.

Sen. Harry Reid, D-Nev., chided Republicans for opposing Democratic efforts on a number of fronts and defended the Obama administration's auto bailout.

"Isn't it a good thing today in America that we have an automobile manufacturing sector? If it had been up to them, General Motors would be gone. If it were up to them, Ford Motor Company would probably be gone. Chrysler definitely would be gone," Reid said on the Senate floor today.

"We decided that they need help, just like New York City needed help 25 years ago."

GM and Chrysler received a $62 billion government bailout -- with the Bush administration rescuing the companies with $17.4 billion near the end of its White House tenure. The Obama administration provided about $45 billion to restructure the two companies in bankruptcy.

But Ford executives have never said the company would have collapsed if the government hadn't bailed out its cross-town rivals.

In December, Ford executive chairman Bill Ford Jr. met with President Barack Obama and praised him for rescuing GM and Chrysler.

"The way he stepped in with GM and Chrysler and preventing the collapse of the supply base was something they did swiftly and forcefully and it worked," Ford said.

If the bailout helped Ford it helped because Ford didn't need it or accept it. A lot of people bought Fords rather than buy from a government-owned company. Ford gained instant credibility at GM and Chrysler's expense.

However, to suggest that Ford would have collapsed if their competitors GM and Chrysler weren't bailed out is simply ludicrous.

Obama's Mismanagement of GM and Chrysler Cost Tens of Thousands of Jobs

Of course, we can't expect someone who's never actually run anything to do a good job:

President Obama’s auto task force pressed General Motors and Chrysler to close scores of dealerships without adequately considering the jobs that would be lost or having a firm idea of the cost savings that would be achieved, an audit of the process has concluded.

The report by Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program of the Treasury Department, said both carmakers needed to shut down some underperforming dealerships. But it questioned whether the cuts should have been made so quickly, particularly during a recession. The report, released on Sunday, estimated that tens of thousands of jobs were lost as a result.

“It is not at all clear that the greatly accelerated pace of the dealership closings during one of the most severe economic downturns in our nation’s history was either necessary for the sake of the companies’ economic survival or prudent for the sake of the nation’s economic recovery,” the report said.

I guess he was so busy closing dealerships owned by people who didn't contribute to Democrats he got lost in the process.