Watchdog Criticizes Harry Wilson GM Buyback Plan as Favor to UAW

NLPC Associate Fellow Mark Modica was a guest on Closing Bell today on CNBC. He was joined by Kevin O'Leary of Shark Tank.

Here is a transcript:

Sara Eisen:  At first it seemed like it was just another activist investors at work but our next guest says something else is in play here. We're talking about Harry Wilson, the restructuring expert who served on President Obama's auto industry task force during the financial crisis and was instrumental in bringing GM out of bankruptcy. Now Wilson is a GM activist investor and represents hedge funds holding a total of 34 million shares asking General Motors' CEO Mary Barra for a seat on the board and is pressing for a stock buyback, Simon.

Simon Hobbs: Our next guest is a former GM bondholder who says the company isn't so financially healthy, that it shouldn't burn through its reserves with buybacks …

GM Asked to Disclose Donations to Nonprofits in Wake of Awards-for-Barra Controversy

Barra Appeal of ConscienceToday 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) …

Women’s Museum Asked to Rescind Mary Barra Award; GM CEO Made History ‘of Wrong Kind’

Mary BarraToday I sent the following letter to Dr. Gretchen Green, the Acting Chair of the National Women’s History Museum:

We ask the National Women’s History Museum (NWHM) to withdraw its planned award to General Motors CEO Mary Barra.

As you know, Barra is scheduled to receive the Katharine Graham Living Legacy Award on November 17 as part of your annual de Pizan Honors at The Mead Center for American Theater at Arena Stage in Washington, DC.

Barra has indeed made history – of the wrong kind.

Just three months ago, she sat in front of Congressional Committees and desperately tried to avoid answering questions about the negligence and cover up regarding an ignition switch defect. As Senator Kelly Ayotte (R-NH) said, “It goes beyond unacceptable. I believe this is criminal.” Senator Claire McCaskill (D-MO) said, “Even under the ‘New GM’ banner, the company waited nine months to take action after …

McCaskill and Blumenthal Must Press GM’s Barra for Brake Corrosion Recall

Claire McCaskillOn Thursday, July 17, General Motors CEO Mary Barra will be back as a witness on Capitol Hill, this time before the Senate Subcommittee on Consumer Protection, Product Safety and Insurance.

Senator Claire McCaskill (D-MO), who has been an outspoken critic of GM’s response to the deadly ignition switch defect, chairs the Subcommittee. Indeed, the hearing is titled, “Examining Accountability and Corporate Culture in Wake of the GM Recalls.” Another subcommittee member, Senator Richard Blumenthal (D-CT), has been even more outspoken. Both deserve credit for seeking to make GM accountable, especially since some members on both House and Senate committees have pulled their punches on Barra and GM.

Richard BlumenthalThe hearing is expected to focus on the deadly ignition switch fiasco. It is imperative, however, that McCaskill and Blumenthal press Barra on a separate issue, the necessity of a recall of pickups and SUVs with a brake corrosion defect. On May …

Dana Milbank’s Hack Journalism

MilbankYesterday, I confronted outgoing General Motors CEO Dan Akerson, the speaker at a National Press Club luncheon. At a press conference beforehand, and through the first question at the conclusion of his remarks, I requested that GM repay taxpayers the $10 billion in direct GM bailout costs.

Akerson’s refusal dominated much of the media coverage of the event. This was clearly not the story line that Akerson intended.  In short, we happily stepped all over his message that the bailout is a success and that GM is back.

The USA Today/Detroit Free Press story is headlined. “GM’s CEO rejects repaying Feds for bailout losses…” Drudge linked to it. The Associated Press story centers around Akerson’s reasons for not repaying the government. If the comments by readers at various newspapers are any indication, we touched a nerve.

Washington Post columnist Dana Milbank attended my press conference and penned a sneering critique

Sorry Dan Akerson, GM Bailout is Failure

I made these remarks today at the National Press Club in Washington, DC before the luncheon speech of outgoing General Motors CEO Dan Akerson:

President Obama justified the auto bailout by predicting it would make money for the taxpayer. With Treasury now selling its remaining shares, the direct loss is about $10 billion. So on its most fundamental level, the auto bailout is a failure.

But that $10 billion figure dramatically understates the true cost. There were separate multibillion dollar bailouts of Ally Financial, formerly know as GMAC, and Delphi and other suppliers. There was cash for clunkers, the government guarantee of warrantees, accelerated fleet purchases, etc., etc.

Treasury also allowed a novel application of the tax-loss carryforward provisions of the tax code during the GM bankruptcy, shielding $30-$40 billion in GM profits from taxation.

In addition to all these costs, the bailout probably ensures future bailout costs when GM …

GM Asked to Pay Back $10 Billion Bailout Costs

pile of cashPeter Flaherty, president of the National Legal and Policy Center (NLPC), today posed key questions to the General Motors leadership at a National Press Club press conference, including whether the company will repay to taxpayers the $10 billion direct cost of the GM bailout.

News that the U.S. Treasury Department has sold its remaining stake and that Mary Barra will take over as GM’s new CEO have put the spotlight on the company and its future. GM executives have pointed to GM’s $26.8 billion in cash as evidence of its improved financial position. Analysts have raised the possibility that the company will buy back shares or institute a dividend.

Questions for GM:

1) Will GM compensate taxpayers for the $10 billion loss they have taken on their involuntary “investment” in the company?

2) If not, why should taxpayers take a loss now on their GM “investment” when the company allegedly …

When Will General Motors Repay Taxpayers $10 Billion?; Bailed-Out Automaker Sits on Cash Hoard

pile of cashI will hold a press conference on Monday, December 16 at 11:00am to pose key questions to General Motors leadership, including whether and when the company will repay to taxpayers the $10 billion direct cost of the auto bailout.

News that the U.S. Treasury Department has sold its remaining financial stake and that Mary Barra will take over as GM’s new CEO have put the spotlight on the company and its future. GM executives have pointed to the company’s gigantic cash position as evidence of its improved finances. Analysts have raised the possibility that the company will buy back shares or institute a dividend.

The NLPC press event will precede current Chairman and CEO Dan Akerson’s scheduled luncheon to present an update on the company’s progress before a National Press Club audience in Washington, DC.

NLPC has been a persistent critic of the auto bailout. NLPC Associate Fellow Mark Modica, …

Survey: Auto Bailout is Drag on GM Truck Sales

A consumer survey taken last week on behalf of the National Legal and Policy Center confirms that public disapproval of the auto bailout continues to dog General Motors, and is likely hurting pickup truck sales, a highly profitable segment of its line.

When 500 consumers in Texas were asked, “Would your decision to buy a specific brand of truck be influenced by whether that company received financial assistance from the federal government?,” 40.08% answered “absolutely.”  Another 11.75% responded “very likely,” and 10.60% responded “likely.” Thus, more than 60% said that the bailout would have some influence on their decision.

Only 23.89% responded “not too likely.”

Texas is the largest truck market in the country, with more sales than the next three states combined.

The release of the survey results comes amidst a major advertising campaign for GM’s full-size trucks – the Chevrolet Silverado and GMC Sierra – with significant visibility …

Will Fiat/Chrysler Need Another Bailout?

NLPC Associate Fellow Mark Modica was interviewed Wednesday by David Asman on the Fox Business Network on Moody’s credit downgrade of Fiat. The Italian automaker, which owns Chrysler, is facing financial difficulties, even as President Obama is ballyhooing the “success” of the auto bailout. Here’s a transcript:

David Asman: Even though Chrysler is now owned by an Italian car company, President Obama continues to refer to it as a successful bail out of an American car company. By now Chrysler’s parent, Fiat is in real trouble. Moody’s just lowered its credit rating to junk status. So are taxpayers about to get hit up for yet another bail out of an Italian car company? Let’s ask Mark Modica who has been following the bailout since it began at the National Legal and Policy Center.  Good to see you again Mark. Thanks for coming in.

Mark Modica: Hi David.…

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