The Obama Administration has become quite the expert on bankruptcy filings. The Detroit Free Press reports that the third auto bailout partaker, Ally Financial, has filed bankruptcy for its mortgage subsidiary, ResCap. The government still owns 74% of Ally, and now has an 0 for 3 record on restructuring bailed out auto-related companies outside of bankruptcy.
One of the most egregious abuses of the Obama Administration's auto bailouts was the blatant favoritism evidenced in the treatment of Delphi (General Motors' parts supplier) retirees. After the Delphi bankruptcy, UAW retirees had their pensions "topped off" by General Motors, apparently with taxpayer money accessed through TARP. While the UAW retirees maintained their pension benefits, non-union, salaried retirees of Delphi lost theirs. There was no logical reason for one group to have their pensions saved while another group lost theirs, just the facts that the distributions were inequitable and the only difference between the groups was that one belonged to a powerful ally of Team Obama and the other did not.
Last week's earnings report from General Motors revealed a troubling statistic for shareholders. GM's market share for North America shrunk from 18.3% a year ago to 16.7% for the latest quarter. Not coincidently, a survey by Yahoo Autos revealed that a full 13% of consumers would now "never" consider purchasing a GM vehicle while another 15% are less likely to purchase. A negative perception of the auto bailout process and the continued political overtones at GM are the reasons for the boycott.
A couple of stories surfaced recently that should be of concern to voters that are analyzing how a Romney presidency would differ from the current administration. President Obama has a track record that can be examined to get a grasp of his agenda, but Governor Romney needs to further explain his positions on two key areas that many voters would expect to see a divergence with our present leader. The reports bring in to question whether or not Romney would be any different from the administrations over the past 12 years when it comes to dumping billions of taxpayer dollars into subsidies and bailouts.
A Jacksonville.com report gives a good explanation for why some Florida localities are purchasing Chevy Volts. When Jacksonville's chief of fleet management, Karim Kurji, was asked what the advantage of going green by purchasing Volts was he hit the nail on the head when he replied, "Federal money." The story goes on to reveal that the total federal taxpayer money used to subsidize one Chevy Volt purchased by Atlantic Beach was over $33,000. It now appears obvious that the Obama Administration and General Motors are willing to pay just about any price, even if the taxpayers are footing the bill, to see the Chevy Volt "succeed."
The Obama Administration has over-stimulated the electric vehicle battery market, as companies inspired by the flow of federal stimulus support don’t have enough customers for their products.
The government promise of a coming electric car (and truck) revolution, thanks to moves such as President George W. Bush’s signature to approve a $7,500-per-electric-vehicle tax credit and Congress’s passage of the Recovery Act, instigated a buildup of capacity and inventory for batteries. Now putrid EV sales – including the newly introduced Ford Focus electric – have put their battery makers in peril, according to the Detroit Free Press.
General Motors has been quick to allay concerns that the Chevy Volt had anything to do with an explosion at a testing facility that appears to have injured five workers, one possibly seriously. The explosion has been attributed to gases from a lithium-based prototype battery being developed at GM's tech center. While the incident should not serve as an indictment against the Volt, concerns about volatile lithium-ion batteries are legitimate.
Another important story goes unreported by TV networks receiving millions of dollars in ad revenue from General Motors. Viewers getting their news from Obama-friendly sources continue to hear about how great GM is doing. For those getting their news from internet sites not beholden to Government Motors, the reports aren't as good. March US market share for GM fell to 17.5% in March, the lowest level for "Old" or "New" GM since 1922.