Auto Bailout Czar: We Did It All for the Unions

Ron Bloom photoThe Detroit Free Press reports that the House committee holding hearings on the auto bailout process wants clarification from former head of President Obama’s Auto Task Force, Ron Bloom, regarding testimony he gave about a statement he allegedly made at a 2009 celebratory dinner. According to a news article written at the time and fellow ex-car czar, Steve Rattner, Bloom stated that he “did this all for the unions.” Bloom denied making the statement while under oath. The congressional panel isn’t buying it and has written a letter to Bloom requesting that he amend his testimony.

Given Bloom’s union background and the UAW favoritism displayed throughout the General Motors and Chrysler bailout process, the admission that the bailouts were done to benefit the unions should not come as a surprise. For many of us, that has been obvious for quite some time. Bloom was once the special assistant to the … Read More ➡

NY Times Asked to Investigate Shale Gas ‘Bubble’ Series

New York Times photoNLPC today asked the New York Times ombudsman to review the newspaper’s front-page series on natural gas published last week. The articles by Ian Urbina alleged that there is a speculative bubble in natural gas drilling. We have identified a number of apparent ethical problems with Urbina’s methods and sources.

Here is the complete text of my letter to The New York Times ombudsman Arthur Brisbane, whose actual title is Public Editor:

I write to request a formal inquiry by the Public Editor into a series of articles published last week in The New York Times about the natural gas industry and the investment banking world.  In the “Drilling Down” series, Ian Urbina alleges that there is a speculative bubble in the shale gas industry, “in much the same way that insiders have raised doubts about previous financial bubbles.”  But at least two of the sources for his articles … Read More ➡

GM Stuffs Truck Inventory Channels to Goose Earnings

GM truck photoIt looks like General Motors is up to its old tricks as it stuffs inventory channels with higher profit trucks. GM is able to record revenue when vehicles are shipped to dealerships as opposed to actually being sold to consumers, so the move will help to paint a false picture of positive second quarter earnings.

The Detroit Free Press reports that GM’s truck inventory has swelled to a bloated 122 days worth of sales as opposed to an average of 60 to 70 for other vehicles. This compares to a 79 day inventory supply of similar trucks at Ford. Peter Nesvold, a Jefferies & Co. analyst, said it best when he stated what many of us have known for a while, “There’s no credibility. It’s unbelievable that after this huge taxpayer bailout and the bankruptcy, that we’re right back to where we were.” He went on to ask, “Is GM … Read More ➡

GM Spends Taxpayer Money to Lobby for More Taxpayer Money

According to CNBC, General Motors has ramped up its lobbying efforts to the tune of $3.58 million in the first quarter of 2011. This is nearly triple the $1.36 million it spent in the first quarter of the prior year. It is also over double the $1.67 million spent by non-bailed out Ford in the same quarter. The $50 billion that taxpayers gave to bail out GM is now partially being distributed back to President Obama, Congress and a variety of agencies in an effort by GM to, well, receive more taxpayer money.

One of the requests made by GM lobbyists is to increase the number of Chevy Volts that qualify for the $7,500 tax credit from 200,000 to 500,000. At the current rate of sales, that’s about a 100 years of subsidies! It is also an additional $2.25 billion of taxpayer money added to the current $1.5 billion of … Read More ➡

Let’s Not Forget Ethical Shortcomings of Auto Bailout

The auto bailouts are now being touted by President Obama as a “success” even though the taxpayer is about to take at least a $10 billion hit when the government sells its remaining GM shares. There is, however, a missing dimension in this debate. It is the moral one.

Prior to General Motors filing for bankruptcy in June of 2009, I was involved as a GM bondholder advocate for a group called the Mainstreet Bondholders. Attempts were made by my group to bring about fair negotiations for creditors of GM, attempts that were ignored by the Obama Administration’s Auto Task Force, headed by Steven Rattner. The Task Force stated that their goal was to restructure GM outside of bankruptcy as they laid out a “take it or leave it” bond exchange offer that was supposedly designed to keep GM out of bankruptcy.

The offer was for bondholders to accept a … Read More ➡

More Bad News for the Chevy Volt

Volt photoAs General Motors gambles on ramping up production of the Chevy Volt, a couple of new reports point to headwinds for demand of electric hybrid vehicles, like the Volt. A new British study disputes the perception of eco-friendliness of electric vehicles. The study takes into consideration driving, manufacturing and disposal and undermines the case being made for a rapid introduction of electric vehicles as a means to address environmental concerns.

According to a piece posted on theaustralian.com, “emissions from manufacturing electric cars are at least 50 per cent higher because batteries are made from materials such as lithium, copper and refined silicon, which require much energy to be processed.” The bottom line seems to be that vehicles like the Chevy Volt are not as green as perceived to be.

Another recent report published by the Reuters news agency reveals that the consulting group, Boston Consulting, lowered its estimate for … Read More ➡

Green Pressure Groups Try to Split National Association of Manufacturers

National business associations have been targets of intimidation tactics by environmentalist groups for some time now. For example, Greenpeace trespassed on the grounds of the U.S. Chamber of Commerce, and the eco-gangs attacked their climate change positions to the point where individual members left the organization. Meanwhile “Green” investors have pressured companies to leave the chamber as well.

The environmental groups have similarly gone after the National Association of Manufacturers, and now “Green” investment groups have turned up their campaign against corporate members of the group to “explain themselves” with regard to “contradictory stances” between what the companies individually say about climate change, versus the position that NAM takes. Specifically the eco-financiers are upset that in March NAM backed an amendment to a small business bill that would prevent EPA from “overregulation” of greenhouse gas emissions from stationary sources (that is, smokestacks from industry and utilities). NAM explained:

Manufacturers support

Read More ➡

Is GM Feeding Rumors About its Finances?

There are some big rumors circulating about the finances of bailed-out General Motors. The first of these is that GM is considering repurchasing Treasury’s stake in the automaker and were circulated by sources who, according to a Bloomberg report, “didn’t want to be identified.” The message was that GM is so cash-rich that they were considering buying back shares from Treasury, thus eliminating the government overhang on the company. This stance raises questions about past actions at GM. Why did GM issue $2 billion of new stock to help fund pension plans if they have adequate cash to do so? Why did GM’s wholly owned finance arm need to issue half a billion dollars of junk bonds for “general purposes” if they are so flush with cash?

GM CEO, Dan Akerson, also floated the rumor when he was asked in a Detroit News interview if GM was considering buying back … Read More ➡

GM Confirms Chevy Volt Tax Credit Abuse

On Monday, I revisted my Chevy Volt story on Eric Bolling’s “Follow the Money” show on Fox Business Network. Here’s a transcript:

Eric Bolling: It is the story you saw here on “Follow the Money” first our friend Mark Modica, first broke the story that car dealers were selling the Chevy Volt as used and claiming thousands in tax credits for themselves. Now the LA Times is following the money and confirming the story with us now from the National Legal and Policy Center is Mark Modica. Also joining us on the panel is attorney Joe Jackson. Mark go ahead boy, you are being vindicated by the LA Times but thank you for breaking story right here on “Follow the Money.” Tell us about it.

Mark Modica: Thank you and thanks for breaking it on your show. Yeah, we ran the story, and basically the story was that … Read More ➡

Akerson Wants $5 Gas; CEO Unfit to Lead Bailed-Out GM

gas price signGeneral Motor’s CEO, Dan Akerson, wants higher gas taxes and the price of a gallon of gas to increase closer to $5 a gallon. Are you kidding me?! The comments were made in an interview with the Detroit News. Regarding government imposed fuel efficiency increases Akerson stated, “You know what I’d rather have them do, this will make my Republican friends puke, as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas. People will start buying more Cruzes and they will start buying less Suburbans.” With comments like these, Akerson might make average Americans and GM investors “puke” along with those Republicans.

I have questioned the management at GM in the past, but these comments prove that Dan Akerson is not the right guy to get GM headed in the right direction. My main recent … Read More ➡