It has now been more than three months since news broke that General Motors, once again, failed to properly protect owners of its vehicles from risks resulting from shoddy quality control. The latest incident involves about 1.4 million GM vehicles that were at risk of erupting into flames due to engine oil seepage. The at-risk vehicles were previously recalled by GM years ago, but the quick-fix remedy offered by GM did not solve the underlying problem.
The Obama Administration’s Justice Department is now suing Volkswagen for “up to $90 billion for allegedly violating environmental law.” Politically-favored General Motors was fined $900 million, or 1% of that amount, for covering up an ignition switch defect that led to the deaths of at least 124 people. At last count, the number of people who lost their lives as a result of emissions' tampering by VW stood at zero.
Meanwhile, the GM board unanimously elected CEO Mary Barra as its Chairman, demonstrating that it is still not independent of political influences, even years after the 2009 bankruptcy process.
When Bob Lutz speaks, automotive journalists listen. Well, at least they usually do. When a recent Automotive News roundtable discussion showed Lutz blasting General Motors’ Chevy Bolt (and electric vehicles like it), mainstream journalists failed to pick up on the story. Lutz was right on the money when he exposed the EV folly, which is costing automakers billions of dollars and driving up prices of conventional, gas-powered vehicles.
Decades ago, the Teamsters’ Central States Pension Fund was a project of organized crime. In the future, it may well be a project of Pension Benefit Guaranty Corporation, the federal agency that insures pension plans against insolvency. Ironically, this could put PBGC itself at risk. This September, the troubled fund, which enrolls over 400,000 active and retired union members in 37 states, filed a restructuring plan with the Treasury Department proposing benefit cuts of nearly 23 percent. The action is the first under a new law. Central States Executive Director-General Counsel Thomas Nyhan explains: “The longer we wait to act, the larger the benefit reductions will have to be.” Yet the union, with help from Congress, helped bring about this dilemma.
If there is an issue that has united popular indignation, Left and Right alike, executive compensation surely ranks near or at the top. But the bipartisan opposition to recent pay increases for the CEOs of mortgage conduits Fannie Mae and Freddie Mac, while highly understandable, misses the larger point. Several months ago, these companies, which account for nearly half the outstanding home mortgage debt in the U.S. and which since 2008 have been wards of the government, announced plans to raise annual CEO pay from $600,000 to $4 million. Their overseer, the Federal Housing Finance Agency, approved the hikes. In response, Congress overwhelmingly has passed (or is on the verge of passing) bills to roll them back. Lawmakers would do better to allow the firms to operate freely and without subsidies.
General Motors’ CEO, Mary Barra, continued to project a bright future for the automaker during a recent presentation to shareholders. The prognostication gave a rosy appraisement for financial estimates as far out as 2020, when Barra says GM will have between $9 billion to $10 billion in free cash flow. Her crystal ball also shows that electric cars will compete with gas-powered vehicles by 2022 and that global car sales will increase by 50% to 130 million by the year 2030.