GM Spends $1.3 Billion to “Create or Retain” 1,000 Jobs

Just days after the US government announced their exit from General Motors, the company announced a move that sounds like it could have come directly out of the Obama Administration playbook. GM is boasting about “creating or retaining” roughly a thousand jobs at the cost of approximately $1.3 million per job in a move that could only be viewed as a positive from a political point of view.

The heavy spending to preserve union jobs did not go unrecognized by the Obama-friendly UAW. UAW Vice President Joe Ashton stated:

Today’s announcement is a win for American workers. The UAW is proud to be a part of this successful collaboration with GM that has helped rebuild the nation’s economy, created good paying, union jobs in communities across the country, and brought manufacturing that was moved overseas back to the U.S. This is further proof that collective bargaining works.

I would argue … Read More ➡

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 Read More ➡

Adoption of New Bulbs Requires Big Subsidies and Killing Incandescents

Cree bulbThe full implementation of the incandescent light bulb ban takes effect in two weeks, which in the U.S. government’s anti-liberty wisdom will effectively eliminate the competition to companies like Cree, Inc., who one industry analyst has said is trying to do a “land grab” of the alternative lighting market.

Besides the illegalization of the Thomas Edison’s filamentous light, Cree last week received a $30 million tax credit from the Department of Energy to expand its manufacturing in Racine, Wisc. and Durham, N.C., where it is also headquartered. That was the second installment for Cree from the Advanced Energy Manufacturing Tax Credit Program, which was funded by $2.3 billion from the Recovery Act. The first windfall for Cree from the stimulus was a $39-million tax credit, as well as $1.8 million for research and development. This is in addition to millions of dollars in federal grants and contracts, … Read More ➡

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 … Read More ➡

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 … Read More ➡

Fisker Execs Kept Salaries While Employees, Taxpayers Got Taken

Fisker hearingThirteen of Fisker Automotive executives made more than six figures in the past year, despite manufacturing zero cars.

The news was first reported Wednesday afternoon on the automotive Web site Jalopnik.com, and later in the evening by the Delaware Journal. Jalopnik often gets the scoops when electric cars catch fire. For those unaware of the ugly saga, Fisker declared bankruptcy at the end of last month after squandering more than $1.4 billion in private investment and losing $139 million of taxpayers’ money.

According to news reports, including one from the Journal a year ago, not a single Fisker Karma – the $102,000 (base price) luxury electric plug-in embraced by the likes of Leonardo DiCaprio and Al Gore – has been produced since July 2012. Hopeful workers in Wilmington, Del. –where company officials and local politicians loudly announced the revival of a former General Motors plant for the … Read More ➡

Cadillac ELR: Mary Barra’s First Embarrassment?

Mary BarraGeneral Motors has announced that Mary Barra will be replacing Dan Akerson as CEO as of mid-January. Ms. Barra was previously the head of global product development. As such, she already has to take partial responsibility for the over-hyped and low-selling Chevy Volt along with the upcoming Cadillac version of the car. With Consumer Reports now stating that the new Cadillac ELR (a glorified Chevy Volt) gave them “sticker shock,” will the ELR be the first major embarrassment for Ms. Barra?

Anyone who has followed the Chevy Volt story could have guessed at what the prospects for a gussied up and rebadged Cadillac version of the car, for over twice the price, would be. The vehicle may well be GM’s worst idea in history. I can not imagine what the motivation for GM to manufacture such a car might be. The decision to produce the car should scare the bejeezus … Read More ➡

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, … Read More ➡

Obama Administration OKs Bird Killing— As Long As Its by Windmill

Duke Energy turbineFriday’s announcement by the Obama administration that it will allow wind energy companies to kill certain bird species for 30 years without legal ramifications shows that its $1 million paltry fine of Duke Energy for avian slayings a week earlier was just for show.

Slamming the president for the application of double standards, not enforcing laws it doesn’t like, and acting unilaterally without Congressional authority is nothing new. It’s not often, though, you see such an obvious policy contradiction appear within such a short period of time. And now, without need to worry about re-election, he can pit his environmental constituencies against each other (wildlife protection vs. green energy promotion).

The latest decision, by the U.S. Fish and Wildlife Service, extends the maximum possible term for permits to “take” (“molest or disturb”… “take, possess, sell, purchase, barter, offer to sell, purchase or barter, transport, export or import…”) from … Read More ➡

GM’s Balance Sheet Not as Healthy as it Looks

GM UAW logosOne of the major architects of the General Motors bankruptcy process, Harry Wilson, recently gave a very optimistic outlook for GM future share price. Mr. Wilson was a member of President Obama’s Auto Task Force, and was an instrumental player in seeing that UAW interests were put ahead of other creditors, like old GM bondholders.

Automotive News now reports that Mr. Wilson feels that GM may be a target for activists because of their “huge” cash hoard. According to the piece:

“Any company that isn’t efficient about capital allocation is a target for activists,” said Wilson, who is now a restructuring adviser at Maeva Group LLC in Westchester, N.Y. “GM has a huge cash hoard and they are generating lots more cash each year, so they need to be thoughtful about that.”

The problem with Mr. Wilson’s statement regarding GM’s balance sheet improving is that it just isn’t true. The … Read More ➡

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