Will Detroit Follow in GM’s Footsteps and Stiff Creditors?

GM building photoA recent Reuters article regarding the likelihood of a bankruptcy filing by the city of Detroit may come as a surprise to those who have heard nothing but positive spin on Motor City’s resurgence since General Motors and Chrysler emerged from their Obama-manipulated bankruptcies. Who can forget Clint Eastwood’s 2012 Super Bowl ad which gave a heartfelt tribute (paid for by Italian-owned Chrysler) trumpeting Detroit’s comeback? It seems like the outlook is now not so rosy for Detroit as its emergency manager Kevyn Orr puts the odds of a bankruptcy for the city at 50/50.

A proposal has been set forth by Orr to creditors offering them just pennies on the dollar reminiscent of GM’s low-ball offer to its bondholders which was made just prior to their bankruptcy filing. The GM offer was not made in good faith and never had a chance of succeeding. The parallel reality is that … Read More ➡

IG: Little Evidence Former Rep. Wilson Did Work for National Laboratories

Heather Wilson photoAn investigation by Department of Energy Inspector General Gregory Friedman has revealed that a consulting firm owned by former Republican Rep. Heather Wilson, who left Congress in 2009, was paid for work for which there was little evidence it had been done, all under what is described as a vague contract.

The inspector was called upon by the National Nuclear Security Administration to examine whether Heather Wilson and Company, LLC provided consulting services to four contractor-managed laboratories: Los Alamos National Laboratory, Sandia National Laboratories, Oak Ridge National Laboratory, and the Nevada National Security Site,

Among the reasons for the audit were questions about what, if any, work she did in exchange for $10,000 monthly payments, and whether a contracting officer for NNSA was pressured when Los Alamos sought to work with HWC. Friedman could not find any evidence of the latter concern.

But in the course of his investigation, Friedman … Read More ➡

GM Ups Chevy Volt Incentives as Demand Wanes

General Motors has announced a $4,000 rebate (or $3,000 and a four year, zero interest loan from government-owned Ally Financial) on the slow-selling Chevy Volt. The company had a choice regarding how to deal with an excess supply of Volts that is growing faster than demand. GM could have, once again, temporarily halted production until inventory (currently at about a 6 month supply) came down to reasonable levels. It instead chooses to lose more millions of dollars by spending on incentives designed to manufacture demand that otherwise is practically nonexistent.

The much-hyped Chevy Volt was originally presented by GM as a green wonder-car that would be a savior for the company with sales expected in the 10,000 per month range by now. Almost three years after first hitting showrooms, the Volt now sees sales stabilizing at a dismal rate of approximately 1,500 per month. That’s roughly one Volt every two … Read More ➡

Treasury and UAW Hand in Hand on GM Offering

It looks like the Obama Administration and the UAW are again working hand in hand as the two entities are coordinating on an offering of a total of 50 million General Motors shares. Treasury is planning on selling 30 million shares as the UAW’s VEBA (Voluntary Employee Beneficiary Association) Trust will sell 20 million shares. The VEBA Trust was formed to cover retiree’s medical benefits for the UAW and received about a 17.5% ownership stake in GM as part of the 2009 bankruptcy process.

The VEBA Trust was formed as part of GM’s negotiations with the UAW back in 2007, well before the GM bankruptcy. The UAW agreed to take responsibility for health care costs for retirees in exchange for GM funding the VEBA account to the tune of about $30 billion. The only problem was that GM didn’t have the cash flow to fund the account. The VEBA deal … Read More ➡

Apple CEO Tim Cook Contradicts Himself with Lisa Jackson Hire

Tim Cook photoAfter last week’s announcement that Apple would hire former EPA Administrator Lisa Jackson to handle environmental issues, a series of videos released  last week by Duke University were amusingly timed.

The six clips featured interviews with CEO Tim Cook, who succeeded the late, popular Steve Jobs, and were released by his alma mater’s Fuqua School of Business, where he earned his MBA. Cook had returned for a class reunion in April and while there Duke recorded discussions about topics such as inspiration, career planning, intuition, and other aspects of business management.

But comments he made in excerpts about ethical leadership and collaboration, in light of Jackson’s new employment, were guffaw-worthy. As NLPC outlined on Monday, Jackson fled EPA after undergoing harsh scrutiny about the agency’s – and her personal – practices of evading transparency. Under that cloak she conducted a highly political and destructive implementation of President Read More ➡

Why Does Apple Want Lisa Jackson and Her Ethical Cloud?

Lisa Jackson phptpApple’s hiring of former EPA Administrator Lisa Jackson last week gives her a soft landing place, after she fled her cabinet role spurred by a flurry of evasions and deceits over alias email accounts she and her underlings used to hide correspondence from the public. Her would-be successor, Gina McCarthy, seeks to be confirmed under the same cloud.

It’s unclear why Apple would want or need Jackson, as its (faux) environmentalist credibility is already well established, and the Mac maker already boasts the top figurehead of eco-figureheads on its board of directors, Al Gore.

That’s not to say the evasive, deceptive Jackson isn’t a fit for Apple, a company with a reputation for falsely claiming “green”-friendly policies when the truth shows otherwise. Also like Jackson, the Cupertino, Calif. clan isn’t shy about piling on sky-high costs for the massive amounts of electricity it needs for services like iCloud … Read More ➡

EPA Regulations Responsible for Eco-Boost Engine Problems

NLPC Associate Fellow Mark Modica was interviewed on the Willis Report on May 28, 2013. Here’s a transcript:

Gerri Willis: Federal government finally, finally revving up an investigation into the Ford F150 pickup trucks with Eco-Boost engines. Now if you watch this show you would have known this was coming because earlier this month we reported consumer complaints about Eco-Boost engines. They shake or lose power during acceleration. That is a complaint. But little has been done about it from Ford or the federal government, for that matter. With more on this Mark Modica associate fellow at the National Legal and Policy Center. Mark, welcome to the show. You know, we’ve talking about this for a long time. Why is the federal government been so slow to act?

Mark Modica: Hi, Gerri. Well, I don’t know. There have been about a hundred complaints. As you said, the vehicles … Read More ➡

Dreamliner Flies, But Doubts Persist About Boeing’s Batteries

Now that Boeing has placed most of its 787s back into service, including those in United Airlines’ fleet, executives with both corporations are putting a happy face on the expensive hardship that was caused by the four-month grounding of the planes due to fire hazard risks.

United reinstated the so-called Dreamliners on May 20, when United CEO Jeff Smisek and Boeing CEO Jim McNerney hopped a flight from Houston to Chicago to show the troubles with the plane’s lithium ion batteries were behind them.

“I’ll tell you, Jim,” said Smisek, as recounted by the Associated Press, “it was a fairly expensive piece of sculpture to have on the ground, so we’re really delighted to have it up and flying.”

That’s not to say the Dreamliners are fixed. As NLPC reported last month, Boeing’s engineers don’t know what caused the fires in the first place, thus they can’t be … Read More ➡

Obama’s Electric Vehicle Loans Program is a Failure

Fisker logoMark it down: the report this month about the shutdown of Vehicle Production Group – beneficiary of a $50-million stimulus loan from the Department of Energy – means the Advanced Technology Vehicles Manufacturing initiative within the Loan Program Office has been a thorough failure.

All five ATVM recipients, awarded a total of $8.4 billion of taxpayer-backed financing under the Recovery Act, have earned derision to some degree. Most fit into the already much-ridiculed electric vehicles program. VPG was funded to produce wheelchair-accessible passenger vehicles that ran on compressed natural gas.

The recipients range from the start-ups (Fisker Automotive, Tesla and VPG) to the established (Ford Motor Company and Nissan). The highest-profile flop, by far, has been Fisker, with its single $102,000-plus electric model built for wealthy California elites that couldn’t muster a stronger review from Consumer Reports than “the fourth-worst luxury sedan” on the market, … Read More ➡

Were Republicans Targeted in GM and Chrysler Dealership Closures?

Chevrolet dealership photoThe IRS scandal that revealed targeting of conservative groups by the Treasury Department has reopened speculation that the Obama-orchestrated auto bailouts unfairly targeted Republican-leaning dealerships for closure. Republican Congressmen Mike Kelly (PA) and Jim Renacci (OH) have penned a letter to Treasury Secretary Jack Lew requesting documentation so that an investigation can determine what criteria was used to shutter dealers that appear to have had one thing in common: their political affiliations.

The outrageous behavior of the IRS in targeting non-profit organizations with conservative roots, like the Tea Party, for extra scrutiny came at around the same time that General Motors and Chrysler were being guided through bankruptcy processes by the Treasury Department. Obama’s Auto Task Force required that GM and Chrysler close about 2,000 dealerships as part of the restructuring. This job-killing decision came at the same time that the Administration boasted about all the jobs that would be … Read More ➡

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