From General Motor's lavish presence at the New York International Auto Show taking place this week and next, you would think that the company is wildly profitable and that it has already paid back the $50 billion it got from taxpayers. Either that, or GM's much-ballyhooed cost cutting has failed, and that its bad old habits are very much alive.
NLPC Associate Fellow Mark Modica and I spent Wednesday walking the floor of the show at the massive Jacob Javits Convention Center on New York City's west side. It is impossible to know how much GM is spending on displaying its vehicles, technologies and related events, but it is more than any other car company. And it is certainly too much.
Amid reports that the Treasury will soon attempt to sell the government's stake in General Motors at a huge loss, CEO Dan Akerson this morning offered thin gruel for those hopeful about the future of the company. Akerson keynoted a breakfast sponsored by the National Association of Automobile Dealers in New York City, the site of the New York International Auto Show.
Asked about the flagging share price, which is now below its IPO price, Akerson cited oil prices, supply chain problems in Japan, and the fact that GM "incented (sic) more heavily" in the first quarter. He offered no scenario that would propel the share price higher.
This week I am attending the New York International Auto Show and already there is plenty of news. The Wall Street Journal is today reporting that the government will "sell a significant share of its remaining stake in General Motors Co. this summer despite the disappointing performance of the auto maker's stock."
GM's share price yesterday dipped below $30. It was already under its IPO price was $33. For taxpayers to break even, shares would have to rise to $53, now increasingly unlikely. In fact, the stock is probably headed down. The Treasury understands this and wants to get out before the situation becomes even worse. The sales would probably take place sooner if not for the fact that the shares are locked up until May 22.
Karl Rodney, the organizer of the Caribbean junkets that were the downfall of Rep. Charles Rangel (D-NY), has pled guilty to lying to Congress. During the Justice Department investigation, NLPC received a Grand Jury subpoena to provide photographs, audio recordings, and other materials from a November 2008 conference in St. Maarten.
I attended the event and documented the corporate sponsorship that violated House Rules, by companies like Citigroup, AT&T and Pfizer. It was this evidence on which the House Ethics Committee admonished Rangel in February 2010, prompting his resignation from the Ways and Means chairmanship.
I am tempted to say that President Obama rushing up to New York City to embrace Al Sharpton during the opening days of his campaign is evidence of a weakness in his re-election prospects. But it is much worse than that.
Barack Obama is failing to demonstrate leadership on racial issues, and leadership in general, by paying such homage to Sharpton. I thought the whole point of electing a black president was to allow the nation to rise above everything that Sharpton represents.
The Associated Press today reinforces questions raised by NLPC about a Federal Communications Commission (FCC) decision to allow a company called LightSquared to deploy a national wireless network. NLPC has alleged that political influence played a role in FCC decisions favorable to LightSquared.
It doesn't matter when and what Sokol told Warren Buffet. Sokol was working for Berkshire Hathaway at the time he was interacting with Lubrizol and trading its shares. Sokol's defense that he did not have ultimate control on approving the acquisition deal is about as lame as it gets. And we are supposed to believe that his resignation is unconnected to these events?
The Securities and Exchange Commission (SEC) has notified Wal-Mart that it will not allow the company to exclude from consideration our shareholder proposal that asks for a report on the business risks of climate change. Our supporting statement criticizes the company's support for unpopular measures like Cap & Trade, and for forcing its controversial political positions on its suppliers.