General Motors finished 2012 with a 17.9% market share in the US and is expected to repeat the performance in 2013 according to a Bloomberg report. The number is at the lowest point it has been since 1924. So what is behind the dismal numbers at GM that sees the company performing at 88 year lows?
General Motors is criticizing Mitt Romney for running an ad that says GM cut 15,000 jobs under the Obama Administration. The Detroit Free Press reported that GM spokesman Greg Martin (speaking about the Romney ad) stated, "No amount of campaign politics at its cynical worst will diminish our record of creating jobs in the U.S. and repatriating profits back to this country."
Leaving aside for a moment the bigger issue of a taxpayer-supported entity improperly inserting itself in an election, lets examine the facts. A look at GM's annual SEC filings gives a clear picture of how many people were employed by the company both before and after the Obama Administration guided the company through a bankruptcy process.
As the presidential election nears we continue to hear about what a great job the Obama Administration did "saving" General Motors. The claims are that millions of jobs were saved and Mitt Romney wanted to let Detroit go bankrupt. A review of the facts reveals that the auto bailout process that cost taxpayers billions of dollars is hardly anything to brag about.
When President Obama says he "saved" GM, what he means is that his administration guided a bankruptcy process for the company, funded with taxpayer dollars. The repeated statements by Obama that Romney would have let the company go bankrupt are deceptive. Let's be clear, GM DID go bankrupt.
The 2012 election campaigns have seen accusations thrown about that both President Obama and Governor Romney have been less than honest at times. After Obama was soundly trounced in the first debate, the defense for the President's poor performance (other than Al Gore's theory that it was the high altitude) was that Mitt Romney lied. While that unsubstantiated charge might make Governor Romney an accused liar, the facts surrounding the General Motors bankruptcy process reveal that those in the Obama Administration are proven liars.
The Democratic National Convention continued to celebrate the General Motors' bankruptcy and auto bailouts last night. Guests at the party included union leaders Bob King, President of the UAW and AFL-CIO President, Richard Trumka, both of whom gave speeches at the event. Union members cheered and waved their UAW signs at the affair as President Obama was repeatedly given credit for "saving" GM and the American auto industry. The fact that GM, along with Chrysler, went bankrupt was not mentioned. The only time the word "bankrupt" was used was to condemn Republican Presidential candidate, Mitt Romney, for wanting to let GM go bankrupt. Democrats seem to be in denial that GM actually did go bankrupt.
The president of the GM Retirees Association, Jim Shepherd, sent a scathing letter last week to GM CEO, Dan Akerson. The letter was in response to General Motors' decision to modify pension plans for non-union retirees. Mr. Shepherd stated that the non-union retirees wanted to express their "absolute consternation and disgust" and described the move by GM as not being only unfair but, "it is sheer irresponsibility and greed."
General Motors CEO, Dan Akerson, discussed some of the issues plaguing GM's share price in today's Wall Street Journal. Akerson laments a bloated bureaucracy at Government Motors that has not greatly improved since the company's 2009 bankruptcy process. Despite admitting that the bankruptcy was rushed through without proper planning, the Obama-appointed Akerson did not mention the continued UAW overhangs at the company.
Well-respected car guy and General Motors supporter, Bob Lutz, posted a piece on Forbes that attacked "right-wing" criticism of the Chevy Volt. With all due respect and noting that I have nowhere near the credentials of Mr. Lutz, I feel it appropriate to respond to the ridiculous defense that we have seen of a vehicle that is costing taxpayers billions of dollars while offering little in return. I also have some questions of my own for Mr. Lutz and GM.
It seems that what is new is old again at General Motors. New GM has rehired Old GM executive, Bob Lutz, to advise New GM executives on how to run a car company. Certainly, the new executives could use the help as GM share price has fallen about 40% year to date. While there are some negative aspects of having one of the leaders of a failed company giving advice on how to run the business, Mr. Lutz (unlike current GM leadership) at least knows the auto industry.