Harry Wilson, the nemesis of General Motors bondholders who were wiped out in the government-orchestrated GM bankruptcy, is back on the scene. On the front page of today’s Wall Street Journal, Wilson is portrayed as an “activist” investor, who seeks to maximize shareholder value. While his suggestion that GM buy back $8 billion of common shares would give a temporary boost to share price, Wilson’s motivations may not be entirely pure. His real agenda could be to expand the already-favored position of UAW shareholders, and to bolster the political fortunes of unions in general.
The trumpets sounded this morning as General Motors reported its 2014 fourth quarter earnings. GM’s bottom line earnings exceeded expectations (although revenue missed and was down from last year) and the pre-market share price of GM immediately jumped over a dollar a share. Despite the victory laps being taken by GM and its friends in the media, it would be wise for individual investors to think twice before jumping on the GM bandwagon.
GM management often exhibits a political DNA which was implanted at the company as a result of the 2009 auto bailouts when the Obama Administration manipulated a bankruptcy process to benefit UAW allies. GM’s main goal now seems to be to give the appearance of financial strength while ignoring the fact that the auto industry is highly cyclical as well as brutally competitive. The strategy has not worked to date considering that, since GM’s IPO in late … Read More ➡
I was a guest this morning on Fox & Friends to discuss Al Sharpton’s longstanding practice of not paying his taxes. Here’s the video:
The discussion was prompted by an article on National Review Online by Jillian Kay Melchior that reports that each and every for-profit Sharpton entity has been shut down by authorities in at least one jurisdiction for failing to pay taxes.
Melchior’s story confirms a pattern also seen with his nonprofit groups and his political campaigns: Sharpton does not pay his bills.
Sharpton has run what are akin to “bust out” schemes. Sharpton takes in money for a project or cause. He lives lavishly on the cash flow, and then creditors, including taxation authorities, are left holding the bag.
Sharpton’s for-profit, nonprofit and political enterprises have always been hopelessly intertwined and conflated, often in violation of the law, … Read More ➡
What was a prolonged hibernation for “Risky Business,” after its brief burst of ballyhoo early last summer, has finally ended. The well-paid consultants and staffers for megarich global warming activist Tom Steyer (pictured in center) are back after his failed financial foray ($74 million) to elect Democrats to the Senate.
After the June 2014 release of its first report, Risky Business: The Economic Risks of Climate Change in the United States, they decided to carve that sucker up by geography. Last week they announced to the world that we first must alert folks in flyover country with the new report, Heat in the Heartland: Climate Change and Economic Risk in the Midwest. It’s clear from their Web site that future regional reports are to come. Steyer’s Risky Business partners Michael Bloomberg and Henry Paulson also threw their names on the Midwest report “findings.”
It contains all … Read More ➡
Timing is everything. And in this 300+ page book titled Sharpton, A Demagogue’s Rise, longtime Sharpton watcher and critic Carl F. Horowitz could not be more timely.
The cold-blooded murder of two New York City police officers followed weeks of Sharpton’s vilification of law enforcement. The controversial minister and activist now finds himself front and center, a position he has always sought, but in a way he did not plan.
Horowitz not only explodes the myths about Sharpton by carefully documenting his past, but indicts a political culture that made possible his spectacular rise.
Horowitz is a staff director of the National Legal and Policy Center (NLPC), a group that has exposed political corruption since 1991. Through a series of NLPC-filed Complaints to the Federal Election Commission, Sharpton has been fined hundreds of thousands of dollars.
PR for the book’s released is being handled by LEVICK. Media inquiries may … Read More ➡
General Motors recently announced that it bought back preferred stock from the UAW Retiree Medical Benefits Trust and the Canadian government. The deal closed in December of 2014 and supposedly will result in a reduction to GM’s fourth quarter earnings to the tune of $800 million. GM had the option to redeem the shares at face value after December 31st of 2014. The timing of the deal brings into question the motivation behind the move and also leads us to reexamine a previous preferred share buyback that occurred in late 2013.
The 2013 deal seemed to have been designed to benefit the UAW rather than the shareholders that GM has an obligation to serve. Reuters reported on the deal in September of 2013 with the following:
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General Motors Co (GM.N) said on Monday it would buy back just under half of its preferred shares held by the United Auto Workers
Today I sent the following letter to Theodore Solso, Chairman of the GM Board:
As a shareholder, the National Legal and Policy Center (NLPC) asks General Motors (GM) to disclose all its contributions to charitable and nonprofit organizations by the company, the General Motors Foundation, or any other entity.
This request is prompted by the acceptance of various awards by CEO Mary Barra offered by charitable and nonprofit organizations at the same time some of the groups are recipients of large cash donations from GM.
The company has vigorously publicized these awards, apparently as part of a campaign to promote and rehabilitate Ms. Barra’s image in the wake of the ignition switch recall delay, for which the death toll continues to rise. Unfortunately, this campaign has backfired and resulted in negative publicity for the company.
On November 10 of last year, we asked the National Women’s History Museum (NWHM) … Read More ➡
Sound the trumpets! Here comes the next best, all-new, electric wonder-car from General Motors. The dust had not even cleared from the rollout of the new and improved 2016 Chevy Volt when GM CEO Mary Barra announced the newest Tesla-killer from GM, the Chevy Bolt. Let’s hope that the engineers working on the Bolt put more thought into the design of the vehicle than the GM executives put into naming the car.
Seriously, the Bolt? The name sounds like something out of a Disney animated movie. I wonder if the names Ratchet or Socket were in contention. Whatever the case, the name may be new, but the hype is all too familiar.
Barra has touted the new Bolt as being “a real game changer” for GM, just like the previously-hyped Chevy Volt was. Anyone who has paid attention to the Volt debacle would know that the car has been … Read More ➡
President Obama traveled to Michigan this week to declare the auto bailout a success. Interestingly, he toured a Ford plant. The company did not participate in the bailout.
GM is still trying to shake the Government Motors moniker, and that was certainly the reason for Obama’s nonvisit.
Earlier this week, General Motors Company boasted that sales for December were the strongest in seven years. A review of the facts shows that this is not exactly true. You see, GM Co. has not been in existence for seven years. While GM points to this technicality when trying to weasel out of liability claims from the past, it continues to act as if the company is a stalwart 100 year-old American institution.
GM described December’s sales as follows in its press release, “General Motors Co. (NYSE: GM) dealers in the United States delivered 274,483 vehicles last month for the company’s best December … Read More ➡
Getting attention is our request that Walmart and other big companies stop funding Al Sharpton and his organization, the National Action Network (NAN), in the wake of the police murders in New York City. On January 5, I was a guest on “Fox and Friends” on the Fox News Channel.
I was also a guest on Money With Melissa Francis on the Fox Business Network.
Additionally, I was interviewed on CBS Insider, a syndicated TV program, and I was a guest on several radio shows.
On September 4, the New York Post published a front-page story on Sharpton’s shakedowns. From the article:
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Al Sharpton has enriched himself and NAN for years by threatening companies with bad publicity if they didn’t come to terms with him. Put simply, Sharpton specializes in shakedowns,” said Ken Boehm, chairman of the National Legal & Policy Center, a Virginia-based watchdog group that has produced a