Government Motors' Woes
Obama's GM continues to
behind other car makers...
Loses $49,000 on every Volt sold...
In the flood of falsehoods unleashed by Democrats at their convention earlier this month, one of the more noteworthy specimens was the assertion that GM... is thriving. To hear party boosters tell it, President Obama's nationalization of GM has sparked an automotive industrial renaissance that rivals anything possible through mere capitalism.
But the market begs to differ — GM shares have shed half their value since January 2011. While the auto industry as a whole is doing better, GM continues to languish, with sales up a mere 10 percent, far behind increases posted by Toyota, Kia, Volkswagen, and Porsche.
The Chevy Volt, in particular, has been a monumental embarrassment, from its $40,000 sticker price, to its paltry driving range, high-profile failures in televised reviews, anemic sales performance, its recent production shutdown, and the astounding revelation that GM loses $49,000 on every sale.
Meanwhile the Obama administration continues to congratulate itself on the jobs it's saved — which only begs the question — what sort of jobs exactly? Building cars that can't compete in the market without a huge government subsidy? Keeping an economic basket case on its feet just long enough to reelect Barack Obama? As long as GM's operation is dependent on federal intervention, the dismal truth is that a job there is effectively a welfare program — albiet one with unusually heavy work requirements.
Democrats claim that the GM and Chrysler bailouts saved 1.5 million U.S. jobs. This outlandish assertion assumes that if the two auto giants had gone through normal bankruptcy processes, car-making in the U.S. would have ceased instantly — not just at GM and Chrysler but at Ford and the likes of Toyota and Honda too. Under this bizarre theory, every supplier, every parts maker, every warehouse and auto services firm would have vanished.
In truth, what probably would've happened if the feds hadn't intervened is GM and Chrysler would have continued production while bankruptcy proceedings ran their course. Assembly lines would have stayed on, debt and interest payments would have been cut, and — critical point here — union contracts would have been redrawn. Far from saving 1.5 million jobs, the GM bailout may very well have preserved nothing more than the disastrously generous UAW contracts that almost drove General Motors out of business.
In all likelihood tens of billions of taxpayers dollars will go down the GM rat-hole. And the Obama Administration plowed in more for a 60 percent interest in the firm than GM is even worth today.
The GM bailout was terrible for GM's creditors, terrible for U.S. taxpayers, and terrible in the long run for the U.S. auto industry.
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