Let them fail!

[a_majoor]

Crony capitalism at work:

http://www.coyoteblog.com/coyote_blog/2011/12/dispatches-from-the-corporate-state-a-study-in-contrasts.html

Dispatches from the Corporate State: A Study in Contrasts
December 9, 2011, 11:39 am

It is interesting to study the contrast between the handling of the Toyota accelerator problems, which turned out to be pretty much all driver error, and the Chevy Volt fire issues.

In the case of the former, we had public hearings and government threats.  The government, without evidence at that point, demanded Toyota recall the vehicles and stop production.  Eventually, when the NHTSA determined that the panic and recall was in error and the issue was operator error and not with the car, the Obama Administration suppressed the results.

Now, Volts appear to have a fire problem with their batteries.  This time, the government is keeping things real quiet and, instead of exaggerating the safety issue, they are suppresing it

It now appears the fire hazard was first discovered back in June, when GM first heard about a fire in a Volt that occurred some three weeks after the vehicle had been crash tested.

Yet, almost five months went by before either GM or the US National Highway Traffic Safety Administration (NHTSA) told dealers and customers about the potential risks and urged them to drain the battery pack as soon as possible after an accident.

Part of the reason for delaying the disclosure was the “fragility of Volt sales” up until that point, according to Joan Claybrook, a former administrator at NHTSA.

Demagoguing a non-problem in the first case, covering up a real problem in the second.  Guess which one has a union that supported Obama’s election and which does not.  Guess which one Obama bought equity in with taxpayer money?

 

[Greymatters]

I am in BC, and bought gas for less than a dollar a litre last night.  I only had $5 on me, but I had no idea how much longer the price would be 99.9. 

At the time when I was buying my current car, I did look at diesel vehicles, and diesel was cheaper then.  None of them really fit the needs my wife and I had.  I echo the statement about there not being enough diesel vehicles.

You must be in the 'gas war' area, cause I havent seen gas below 1.00 in several years.  Price across the Island and Vancouver averages between 1.20 and 1.30 depending on what station, what city, and day of the week (Fridays and Holidays are usually the highest prices). 

 

[Rifleman62]

Source: Gas Buddy

Regular Gasoline Average Prices
                    USA Canada
Today         3.270 117.589
Yesterday         3.276 116.790
One Week ago 3.308 118.218
One Month ago 3.425 121.471
One Year ago 2.976 108.969
Current Trend    steady      up (of course)

Canada Fuel Taxes by Province

Gasoline (¢/L)
                                                                          Comment
Alberta                 23.877¢ GST
British Columbia 35.864¢ GST + Includes carbon tax of 5.56 ¢/L as of July 1, 2011 (scheduled to rise to 6.95 ¢/L on July 1, 2012).
Manitoba                 26.602¢ GST Manitoba's PST does not apply to gasoline or diesel fuel.
New Brunswick         37.307¢ GST + PST
Newfoundland         41.126¢ GST + PST
Northwest Territories 27.376¢ GST
Nova Scotia         41.650¢ GST + PST
Ontario                 38.208¢ GST + PST
Prince Edward Island 31.271¢ GST PST does not apply to gasoline or diesel fuel. Fuel tax is adjusted monthly and includes an amount    equivalent to PEI's PST. The fuel tax is capped at 15.8%
Quebec                 42.761¢ GST + QST of 13.5% is applied on top of sales amounts after the GST has been added.
Saskatchewan         30.446¢ GST PST does not apply to gasoline or diesel fuel.
Montreal                 45.601¢ GST + PST + 1.5¢ Transit Tax.
Vancouver         45.034¢ GST + PST + 15¢ Transit Tax. Includes carbon tax of 5.56 ¢/L as of July 1, 2011
Victoria                 39.021¢ GST + PST + 3.5¢ Transit Tax. Includes carbon tax of 5.56 ¢/L as of July 1, 2011
Yukon                 22.876¢ GST + PST

Please note the above rates are meant as only guidelines of pump taxes and may not represent the full tax amount at the pump. Source: Compiled by GasBuddy Organization from various sources.

 

[a_majoor]

The Volt is certainly a money spinner. Everyone gets to pay for it!

http://www.michigancapitolconfidential.com/16192?utm_source=Mackinac+Center+Publications&utm_campaign=ccd8597a9a-MichCapCon_12_1312_12_2011&utm_medium=email

Chevy Volt Costing Taxpayers Up to $250K Per Vehicle
Analyst: 'This might be the most government-supported car since the Trabant'
By Tom Gantert | Dec. 21, 2011    Twitter Follow Tom Gantert on Twitter
Chevy Volt

(Editor’s note: This article has been updated with a reaction from a General Motor's official.)

Each Chevy Volt sold thus far may have as much as $250,000 in state and federal dollars in incentives behind it – a total of $3 billion altogether, according to an analysis by James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

Hohman looked at total state and federal assistance offered for the development and production of the Chevy Volt, General Motors’ plug-in hybrid electric vehicle. His analysis included 18 government deals that included loans, rebates, grants and tax credits. The amount of government assistance does not include the fact that General Motors is currently 26 percent owned by the federal government.

The Volt subsidies flow through multiple companies involved in production. The analysis includes adding up the amount of government subsidies via tax credits and direct funding for not only General Motors, but other companies supplying parts for the vehicle. For example, the Department of Energy awarded a $105.9 million grant to the GM Brownstown plant that assembles the batteries. The company was also awarded approximately $106 million for its Hamtramck assembly plant in state credits to retain jobs. The company that supplies the Volt’s batteries, Compact Power, was awarded up to $100 million in refundable battery credits (combination tax breaks and cash subsidies). These are among many of the subsidies and tax credits for the vehicle.

It’s unlikely that all the companies involved in Volt production will ever receive all the $3 billion in incentives, Hohman said, because many of them are linked to meeting various employment and other milestones. But the analysis looks at the total value that has been offered to the Volt in different aspects of production – from the assembly line to the dealerships to the battery manufacturers. Some tax credits and subsidies are offered for periods up to 20 years, though most have a much shorter time frame.

GM has estimated they’ve sold 6,000 Volts so far. That would mean each of the 6,000 Volts sold would be subsidized between $50,000 and $250,000, depending on how many government subsidy milestones are realized.

If those manufacturers awarded incentives to produce batteries the Volt may use are included in the analysis, the potential government subsidy per Volt increases to $256,824. For example, A123 Systems has received extensive state and federal support, and bid to be a supplier to the Volt, but the deal instead went to Compact Power. The $256,824 figure includes adding up the subsidies to both companies.

The $3 billion total subsidy figure includes $690.4 million offered by the state of Michigan and $2.3 billion in federal money. That’s enough to purchase 75,222 Volts with a sticker price of $39,828.

Additional state and local support provided to Volt suppliers was not included in the analysis, Hohman said, and could increase the level of government aid. For instance, the Volt is being assembled at the Poletown plant in Detroit/Hamtramck, which was built on land acquired by General Motors through eminent domain.

“It just goes to show  there are certain folks that will spend anything to get their vision of what people should do,” said State Representative Tom McMillin, R-Rochester Hills. “It’s a glaring example of the failure of central planning trying to force citizens to purchase something they may not want. … They should let the free market make those decisions.”

“This might be the most government-supported car since the Trabant,” said Hohman, referring to the car produced by the former Communist state of East Germany.

According to GM CEO Dan Akerson, the average Volt owner makes $170,000 per year.

~~~~~

(Updated Information)

Greg Martin, director of Policy and Washington Communications for GM, wrote in an email, "While much less than the hundreds of billions of dollars that Japanese and Korean auto and battery manufacturers have received over the years, the investments provided by several different Administrations and Congresses to jump-start the country's fledgling battery technology and domestic electric vehicle industries (not just specifically for the Volt as Ford's offering will also use LG Chem batteries and Fisker will use the A123 system for example) matches the same foresight and innovation  leadership that other countries are exhibiting and which America has historically taken pride in."

Martin added that the Mackinac Center's math was "simple and selective." However, he offered no data or specifics to support his assertion.

"This is a matter of simple math," said Hohman. "I added the known state and federal incentives that have been offered and divided by the number of Volts sold. If GM has additional information to add to the public data on the use of taxpayer money, I look forward to seeing it." 

Of course, GM sucks at building and selling real cars, so the Volt model may be the only way it survives:

http://dailycaller.com/2011/12/20/big-trouble-for-obamas-gm/

Obama’s going to run on this bailout? Really?

GM’s make-or-break compact Chevrolet Cruze, hyped as a “home run,” is actually “headed for flopsville,” according to Edward Niedermeyer of Truth About Cars. He has the damning chart. Cruze sales were great at first, when its competitors from Honda and Toyota had been crippled by the Japanese earthquake and tsunami.  …

[t]he Cruze seemed to show that the “new” GM was capable of selling smaller cars on their merits, rather than as afterthoughts to more profitable truck, SUV and large car offerings. And indeed, through the first half of this year, it seemed that the Cruze was something of a roaring success, regularly outselling its segment competitors. But then, in June, when production shifted from 2011 models to 2012 models, something changed: sales started to slow, and inventories started to rise. As Cruzes began piling up on dealer lots, GM trimmed production moderately, but still, inventories began to grow out of control. Clearly something was going wrong

P.S.: Sorry, McArdle (scroll for “Cheap Date No. 1″). …

P.P.S.:  It’s not that hard to think of a reason why Cruze sales might have crumped (apart from the renewed production of Honda Civics and Toyota Corollas). The Cruze had significant early reliability problems. People who buy small cheap cars typically can’t afford breakdowns. Word gets around. Corrective efforts by GM may have fixed the Cruze glitches, but at this point in the launch it could be too little too late. That’s the story of GM (and the UAW, for that matter).  …

P.P.P.S.–Now he tells us: Even cars with relatively low sales volumes can be profitable, of course, if costs are in line with prices. But that may not be the case with New GM, which is saddled with a union contract preserving existing UAW members’ pre-bankruptcy wage rates.  Speaking in Detroit, Obama’s auto czarlet Steve Rattner admitted that Obama hadn’t asked the UAW to give up enough in the bailout. (Gee, that’s not what I recall him–or Obama–saying at the time.) Video here. From the Detroit News:

Yet Rattner acknowledged that American automakers still have substantially higher labor costs than their foreign competitors — a gap he wishes the task force had done more to close.

“We asked all the stakeholders to make very significant sacrifices,” he said. “We should have asked the UAW to do a bit more. We did not ask any UAW member to take a cut in their pay.”

In this sense, GM’s subterranean stock price is an accurate reflection of Obama’s, and Rattner’s, failures. “If the government sold its remaining GM stock today,” notes the News, “taxpayers would lose about $16.5 billion.” … Update–Non-Walkback Walkback: Rattner has posted a “clarification” of his remarks that only reiterates them.  (“[W]e might have asked ALL of the
stakeholders in the auto companies to make deeper sacrifices in order to preserve jobs and the profitability of these companies for the future.”) He says only he has no “desire to see auto workers (or anyone else) take a pay cut.” Well, who does–unless it’s neccessary to “preserve jobs and profitability”? Preserving jobs and profitability was supposed to be what the taxpayer-financed bailout was all about.  And there were plenty of people at the time telling Obama he wasn’t asking for enough sacrifice from the UAW and others. Looks like they were right. … Is there an opening for Mitt Romney here (‘Under my plan we would have asked for that sacrifice’ … etc..)?

More: GM initially portrayed the Cruze’s declining sales as a good sign, because the company cut production rather than push the surplus inventory out the door with profit-sapping incentives. The press bought it. Then GM stopped production again …

Read more: http://dailycaller.com/2011/12/20/big-trouble-for-obamas-gm/#ixzz1hIaM8QNx

 

[a_majoor]

Part of the larger argument not to subsidze business at all:

http://www.nationalpost.com/todays-paper/cent+110M+Quebec+loan/5931316/story.html

GM yet to pay cent on $110M Quebec loan

Nicolas Van Praet, Financial Post · Dec. 31, 2011 | Last Updated: Dec. 31, 2011 3:09 AM ET

MONTREAL . It's been nearly a decade since General Motors Corp. cranked out Chevrolet Camaros and Pontiac Firebirds at its Ste-Thérese assembly plant just north of Montreal. The factory has since been torn down to make way for a vast commercial complex called Faubourg Boisbriand.

Out with the muscle cars, in with McDonald's and Moores. But a curious thing about the facility lingers like a ghost from a bygone era: an outstanding $110-million interest-free loan from the Quebec government to GM that the automaker has yet to pay a penny on.

Investment Quebec is now treating the loan as a potential default, part of $835-million worth of loss allowances that it carried on its financial statements as of March 31, 2011. GM says it intends to pay the money back. But critics are skeptical. They say that an outstanding loan for an asset that no longer exists merely highlights the absurdity of using public money to help corporations, whether it be through direct subsidies, loans or other mechanisms.

"The problem with all this stuff is you don't save or create jobs," said Fraser Institute senior fellow Mark Milke. "By loaning money to one pulp mill or one automotive company, you help them at the expense of another pulp mill or another automotive company. This is all about ribbon-cutting for politicians."

Quebec loaned GM Canada the money in early 1987 to help the automaker build a new paint shop at the Ste-Thérese facility and to retool the plant to make a new version of the Oldsmobile Ciera. The federal government provided a matching loan for the same purpose.

The total amount is due in 2017, meaning GM will have had 30 years to pay back the principle with no interest.

"In general, companies don't repay the money they owe us before they need to," said an Investment Quebec official. "GM is doing better now so we hope" it will honour its commitment.

GM Canada is current with all the terms and conditions of its existing loan agreements and will pay off the Quebec sum, company spokeswoman Faye Roberts said.

Regardless, it's a drop in the bucket compared to the amount of financial aid to the Detroit automakers that Ottawa and Ontario have scrubbed off their books following the companies' U.S. bankruptcy-protection filings two years ago, according to Mr. Milke.

In a research paper published this month, Mr. Milke says $6.6-billion in GM loans were written off in the federal public accounts in 2009-2010. He cites his email correspondence with the federal Department of Finance to confirm the numbers.

Similarly, he says the socalled "old" Chrysler did not pay back $1.2-billion worth of loans it received from the two governments before it filed for creditor protection in the United States. Jim Flaherty, the federal Finance Minister, has said none of those original loans to the old Chrysler will be recouped.

Quebec's GM Ste-Thérese loan is not the first time a government has provided financial assistance to a business unit that subsequently died.

Alberta backstopped Peter Pocklington's Gainers Foods meat-packing plant before it plunged into receivership. B.C. squandered $400-million in the 1990s trying to keep a pulp mill in Prince Rupert afloat.

The larger question is whether lending automakers money to revamp their assembly factories continues to make sense, particularly when provincial and federal governments are running massive deficits.

GM says it does. "Automotive investments are highly sought-after in jurisdictions around the world," Ms. Roberts said in an email, and automakers carefully weigh such aid when considering which of their plants in various countries will get new vehicle production mandates.

Ray Tanguay, chairman of Toyota Motor Corp.'s Canadian manufacturing arm, agrees. He said in July that government incentives are crucial in maintaining automobile production in Canada because other jurisdictions, such as Alabama and Tennessee, are offering equally attractive subsidies to woo investment.

The federal and Ontario governments this summer pledged a $142-million loan and grants package to Toyota Motor Manufacturing Canada Inc. for projects at its two Ontario assembly facilities, including plans to build a battery-powered version of its RAV4 model.

As the loonie's strength pushes factory labour costs higher than those in the United States, Canadian auto executives are expected to continue to press the federal and Ontario governments for financial assistance in a bid to help make their operations competitive. They may face a receptive audience.

Politicians and civil servants continue to justify corporate assistance on the grounds that it promotes economic growth. But no such link has been definitively proven, says the Montreal Economic Institute. The conservative think-tank's own research, citing OECD data, suggests the greater a role that subsidies play in an economy, the lower economic growth seems to be.

As for Investment Quebec, its president said in October he was confident that not all its loss allowances will materialize.

The agency also helped Quebec City area's Davie Shipyard in its most recent relaunch out of bankruptcy protection.

Davie was frozen out of $33-billion worth of federal naval and coast guard contracts awarded in October.

nvanpraet@nationalpost.com

 

[a_majoor]

Well, the taxpayers should be relieved their money was well spent for them:

http://pjmedia.com/tatler/2012/01/05/congratulations-to-general-motors-worst-car-stock-of-2011-chevy-volt-a-worst-product-flop-of-2011-winner/?print=1

Congratulations to General Motors: Worst Car Stock of 2011; Chevy Volt a ‘Worst Product Flop of 2011′ Winner
Posted By Seton Motley On January 5, 2012 @ 5:52 am In Economy | 11 Comments

General Motors stock (NYSE: GM) finished 2011 down 46.1% - the absolute worst car or car-related product stock on the board.  Besting (so to speak) the second worst by 4.5%.

And GM’s unprofitable, unpopular, combustible electric Chevy Volt was a ‘Worst Product Flop of 2011’ winner.  Oh, and GM is moving electric vehicle development (and production?) to China – which sort of undermines the jobs “created or saved” reason for the $50 billion GM bailout.

All of which is even more terrible GM news for We the Taxpayers.

Per the titanic GM stock price drop-off: As a result of President Barack Obama’s $30 billion in additional bailout coin, we own more than 500 million shares of GM stock.  To break even on our “investment,” these shares must be sold at $53 per.  GM closed yesterday at $21.15.  Which if sold today would mean for us about a $16 billion loss – just on the stock portion of the GM bailout (we’ve suffered additional huge losses on other portions thereof).

Less Government tracks the looming stock loss – and offers the solution for how we can extricate ourselves from GM – at www.BailoutCost.com.

Less Government President Seton Motley:

“From the moment the bailouts began – and General Motors became Government Motors – we have seen GM stack failure upon failure.

“There’s the unprofitable, unpopular, combustible electric Chevy Volt – a ‘Worst Product Flop of 2011’ winner.  That costs We the Taxpayers $250,000 per unit sold.  GM sold in 2011 25% fewer Volts than they had planned – but is in 2012 bizarrely increasing production by 500%.  And despite all of this failure – including the inability to determine what is causing Volts to burst into flames - GM will next year begin producing an electric Cadillac and an electric Cruze.

“GM in 2010 received more clean (non-energy) energy patents than any other entity - of the Solyndra, Tesla, Fisker, uber-failure variety.

“And on, and on, and….

“And GM and its Obama Administration-Democrat backers ludicrously tell We the Shareholders that all of this failure is a ‘success.’

“Well, GM was last year the worst car stock of all – and the Chevy Volt was an award-winning flop.  So the market ain’t buying it.  And neither are We the People.”

Note: This post originally reported the American public’s stake in GM to be 500,000 shares. It is actually 500 million.

Article printed from The PJ Tatler: http://pjmedia.com/tatler

URL to article: http://pjmedia.com/tatler/2012/01/05/congratulations-to-general-motors-worst-car-stock-of-2011-chevy-volt-a-worst-product-flop-of-2011-winner/

 

[a_majoor]

Maybe GM could do better by buying and rebadging the Prius?

http://pjmedia.com/blog/the-follies-and-foibles-of-the-chevy-volt/?print=1

The Follies and Foibles of the Chevy Volt

Posted By Mike McDaniel On February 3, 2011 @ 12:00 am In "Green" tech,Cars,Environment,Lifestyle,Politics,Science & Technology,US News | 16 Comments

I first wrote [1] about the fast-failing fortunes of the Chevy Volt for PJ Media on April 21. Since then, despite bizarrely optimistic GM and Obama administration spin, the Volt appears destined to go the way of the Edsel and other epic automotive failures, despite Mr. Obama’s recent claim [2] to have saved the auto industry. If the Volt is a harbinger of salvation, the industry might be wishing Mr. Obama didn’t bother.

The Volt is a very heavy, needlessly complex compact hybrid with a battery range of  25-50 miles. Many misconceptions about its drive mechanisms are still floating about — apparently abetted by GM — but the fact remains that when the Volt’s battery-only range is exhausted, its weak onboard gasoline engine, which requires premium fuel, directly drives the vehicle. A full battery recharge takes up to 12 hours on 110 volt house current, but about five hours with a special, high voltage charger, an option available at only $2000, not including installation. All this for around $41,000 minus a federal tax credit of $7,500.

Having sold only about 6,000 Volts, GM has been trotting out some rather confusing public relations blurbs:

    [Volt] Production was only ramped up to full speed in early September and now stands at a rate of 150 vehicles per day. Many of the 2,367 cars produced during the month are still in transit to dealers and buyers and, as of today, there are only 884 cars in the pipeline that are available for retail sale.

    [GM] Spokesman Chris Lee says GM still will add 300 workers at the Detroit-Hamtramck plant — but not a second shift — by the end of this year to make more Volts.

A production rate of 150 Volts per day equals 54,750 Volts per year, yet GM is selling only a fraction of that. It seems that the demographic of buyers ready to snap up a Volt at any price to enhance their green street cred, or simply to add the latest technological toy to their collections, has been exhausted.

Sales are stalled far below GM’s optimistic projection of 10,000 U.S. and 60,000 European sales in the Volt’s first year. The 12,000 Volts General Electric promised to buy [3], as well as a non-specific number of Volts Mr. Obama promised to buy, have apparently not, as yet, materialized, despite rare sightings of Volts with government plates. Volt sales have essentially stalled, a fact even GM has been forced to admit because of the unfortunate tendency of the Volt’s $10,000 (GM has suggested replacement costs as low as $8,000) battery pack to more or less spontaneously combust.

The fun began in June when the National Highway Traffic Safety Administration (NHTSA) conducted Volt crash testing [4]. Three weeks later, a damaged Volt’s battery spontaneously combusted, touching off several nearby fires. Several congressmen, including Rep. Darrell Issa (R-CA), recently sent a letter to NHTSA Administrator David Strickland demanding to know why the NHTSA kept this under wraps until a second test in November produced the same results. Only then did the NHTSA make public the problem and launch a “formal safety defect investigation.” The NHTSA has conducted at least three more tests on Volt battery packs, each with pyrotechnic results [5] that set GM spinmeisters rotating at warp speed, so fast they’ve had difficulty keeping their stories straight.

On November 28, GM North American President Mark Reuss announced [6] that Chevrolet would provide conventionally powered loaner vehicles for Volt customers. But on December 1, GM CEO Dan Akerson upped the ante [7]and announced that GM would buy back any Volt whose owner was concerned about spontaneously combusting. Ackerson also said:

    We want to assure the safety of our customers, of our buyers, and so we’re just going to take a time out, if you will, in terms of redesigning the battery possibly.

Unsurprisingly, the European introduction of the Volt has been “delayed,” which reasonable, flammable people might expect of a vehicle that can spontaneously combust without warning.

Like so much of the “product” output of the Obama administration, the Volt is full of features that any rational being — or rational manufacturer — would consider fatal bugs. Consider:

(1) Even with a $7,500 government (taxpayer) tax subsidy, the average Volt still costs about $33,500, not including fast charger ($2,000). It’s easily possible to buy two well-equipped compact cars for that price that get mileage equal to the Volt

(2) At about the time initial owners would be trading in their Volts, they’d have virtually no resale value. Who would buy a used Volt knowing they’d have to spend around $10,000 any day to replace the battery pack? This factor alone would certainly obliterate Volt resale value and any dealer accepting a Volt on trade would be taking a major loss, which would almost certainly turn the Volt into the first “no deposit, no return” car.

(3) Mathematics is not on the Volt’s side. Even if one assumes the Volt manages 100 MPG, on initial purchase price alone it is impossible to break even on gas expenditures over the cost difference between a Volt and any other high mileage, conventionally powered subcompact/compact car. The Volt simply makes no fiscal sense whatever for most Americans.

(4) While GM is neither confirming nor denying, GM is probably not making a cent manufacturing the Volt. One of their spokesmen really did call the Volt a “loss leader, [8]” which is nearly as remarkable — and bizarre- — as Mr. Obama’s obvious pride in “leading from behind.” [9] Now that GM will at the least have to redesign, recall, and replace every Volt battery, it is more obvious than ever that the Volt is not an exercise in capitalism, but in green political wish making.

The Volt remains what it has been before the first one left the factory: an engineering exercise with not-ready-for-prime-time technology escaped from the lab, and yet another horribly costly epic failure propelled by taxpayer money into the Obama administration’s bottomless borrowed-money pit of green energy debacles.

(Also see Seaton Motley’s Tatler post, [10] “Chevy Volt Costs Taxpayers Up to $250,000 Per Sale”)

Article printed from PJ Media: http://pjmedia.com

URL to article: http://pjmedia.com/blog/the-follies-and-foibles-of-the-chevy-volt/

URLs in this post:

[1] I first wrote: http://pjmedia.com/blog/obamas-energy-lunacy/

[2] recent claim: http://www.cbsnews.com/8301-18560_162-57341024/interview-with-president-obama-the-full-transcript/

[3] promised to buy: http://pjmedia.com http://www.plugincars.com/ge-will-purchase-25000-plug-ins-12000-chevy-volts-106436.html

[4] crash testing: http://hotair.com/archives/2011/12/09/did-the-obama-administration-delay-report-on-volt-fires/

[5] pyrotechnic results: http://green.autoblog.com/2011/11/26/nhtsa-releases-chevy-volt-fire-investigation-details/

[6] Mark Reuss announced: http://www.foxnews.com/leisure/2011/11/28/chevy-offering-volt-owners-loaner-cars-until-fire-investigation-is-resolved/

[7] upped the ante : http://www.foxnews.com/leisure/2011/12/01/gm-may-buy-back-chevrolet-volts-redesign-battery-pack-due-to-fires/?test=faces

[8] “loss leader,: http://statelymcdanielmanor.wordpress.com/2011/10/26/the-chevy-volt-a-loss-leader-for-a-leading-from-behind-president/

[9] “leading from behind.”: http://www.washingtonpost.com/opinions/the-obama-doctrine-leading-from-behind/2011/04/28/AFBCy18E_story.html

[10] Tatler post, : http://pjmedia.com/tatler/2011/12/22/chevy-volt-costs-taxpayers-up-to-250000-per-sale/

 

[a_majoor]

If you can't sell the car to the public...

http://gas2.org/2012/02/20/ge-forcing-employees-into-chevy-volts/

GE “Forcing” Employees Into Chevy Volts
February 20, 2012 By Christopher DeMorro 386 Comments

General Motors and General Electric are two companies that have been in the political crosshairs lately. GM stands accused of “crony capitalism,” while GE is under fire for paying no Federal income taxes in 2010. The two companies share more than that though, with GE placing an order for 12,000 Chevy Volts and other hybrid vehicles.

A memo leaked to Green Car Reports lays out GE’s plans for their new fleet of Volts, and as expected, it has some people crying foul.

The memo, sent to employees of GE Healthcare Americas team explains that all sedan, crossover, and minivan purchases in 2012 will be replaced by the Chevy Volt. Only field engineers are exempt from having to drive a company Volt.

GE will offer estimates for installation Level 2 Charging Stations, though all-gas use will be allowed when there is no electric option. Any employees who opt out of the Volt program will not be compensated for their expenses. Those who do choose to drive the Volt will be reimbursed for public charging and home charging costs, in addition to gas uses.

While some people are probably put off by having to drive a Volt, GE claims to have crunched the numbers and believes that in the long term, this will save the multi-national company big bucks. More than that though, GE is positioning itself as a big player in the EV charging market. Getting employees into Volts also means getting charging stations into homes.

It’s a bold move to be sure, and it will hopefully prove to be a boon to the Volt’s flagging sales numbers. GM had hoped to sell as many as 60,000 Volts in 2012, before dropping that number to 45,000. Will they even make that number though? Hard to tell, though GE’s business will go a long way towards giving the Volt some sales momentum.

Source: Green Car Reports

 

[a_majoor]

Yup, the bailout created a lean, new, efficient GM....

http://www.thetruthaboutcars.com/2012/02/edmunds-spring-for-u-s-car-sales-winter-for-gm/#more-432676

Edmunds has handed in its predictions for February sales. Its bottom line is similar to the forecast made by Kelley Blue Book a few days ago: More than a million cars sold, GM the big loser of the month. Edmunds has better news for Ford. And much better news for Chrysler, if that is at all possible.

Sales Volume 12-Feb 11-Feb YOY YOY adj
GM 196,742 207,030 -5.0% -8.8%
Ford 184,812 156,238 18.3% 13.6%
Toyota 149,780 141,846 5.6% 1.4%
Chrysler 125,990 95,102 32.5% 27.2%
Honda 103,183 98,059 5.2% 1.0%
Nissan 97,971 92,370 6.1% 1.8%
Industry 1,095,059 993,009 10.3% 5.9%

Looking at a few more days of data than Kelley, Edmunds predicts that somewhere around 1,095,059 new cars will be sold in February, for a Seasonally Adjusted Annual Rate (SAAR) of 14.4 million units. This would be a 5.9 percent increase over February 2011. Edmunds.com figures that retail SAAR will come in at 11.3 million vehicles in February, with fleet transactions accounting for 21 percent of total sales. Edmunds Senior Analyst Jessica Caldwell sees a veritable spring for U.S. auto sales:

“There’s a rising tide of excellent buying conditions right now that is really driving auto sales momentum. Between surprisingly strong sales over Presidents Day weekend, optimistic economic news, and unseasonably mild weather conditions across the country, things seem to be breaking the right way for both car buyers and dealers.”

Edmunds agrees with Kelley that GM will get it on the chin, and predicts even more hurt: Unadjusted for sales days, Edmunds foresees a 5 percent decrease in GM sales. Ford (+18%) and Chrysler (+32.5%) are doing much better on the Edmunds spreadsheet than predicted by Kelley.

Market Share 12-Feb 11-Feb YOY
GM 18.0% 20.8% -2.9%
Ford 16.9% 15.7% 1.1%
Toyota 13.7% 14.3% -0.6%
Chrysler 11.5% 9.6% 1.9%
Honda 9.4% 9.9% -0.5%
Nissan 8.9% 9.3% -0.4%

If Edmunds’ predictions pan out, then GM will suffer a huge hit to their year-over-year market share, dropping almost three percentage points from February of last year. According to Edmunds, “GM’s year-over-year decline is a direct result of its aggressive incentives push that pumped up sales in early 2011.”

Pretty much all of that lost market share will be snapped-up by the cross-town rivals. Edmunds has Ford gaining 1.1 percent in share, and Chrysler a very respectable 1.9 percent.

 

[a_majoor]

It looks like the American public has caught on. Another economy question to throw at the Administration during the election campaign:

http://www.rasmussenreports.com/public_content/business/auto_industry/april_2012/59_view_money_losing_auto_bailouts_as_a_failure

Many Americans view the bailouts of General Motors and Chrysler more favorably these days, believing incorrectly that the government made money or broke even on them. But the view grows a lot more negative when the actual price tag is attached.

A new Rasmussen Reports national telephone survey finds that 20% of American Adults now believe the government made money on the billions in taxpayer dollars given to the two automakers to keep them afloat, while 19% more say the government broke even. However, a plurality (46%) recognizes that the government lost money on the auto bailouts. Fifteen percent (15%) are not sure. (To see survey question wording, click here.)

This survey of 1,000 Adults nationwide was conducted on April 23-24, 2012 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC. See methodology.

 

[a_majoor]

Best line in the report:  “Why would GM cut R&D so profits look good in the short term? Is something happening in November?”. Of course the more urgent matter should be the waste of billions of taxpayer money for the bailout and the continuing loss of taxpayer value ($30 billion loss). Don't forget the Government of Canada and the Government of Ontario also have this albatross tied to the necks of Canadian taxpayers; we will also partake of a proportionate loss as well:

http://pjmedia.com/vodkapundit/2012/05/01/hide-the-decline-chevy-volt-edition/?print=1

Hide the Decline, Chevy Volt Edition

Posted By Stephen Green On May 1, 2012 @ 12:58 pm In Uncategorized | 41 Comments

My auto industry insider has gotten back to me with another report. Here it is.

Seton [Motley]‘s piece looks at Chevy’s decision to kill the Avalanche for poor sales performance (but not the Volt), correctly pointing out how insane this is:

    A Volt which the American people don’t want to own. Made by General Motors, of which the American people are still forced to own 33%. As the result of the $83 billion auto bailout–on which we’re poised to lose more than $30 billion.

But he’s only on the tip of the iceberg, both in how bad the Volt sales reality is and in the company’s reasoning for propping up the Volt.

In his recent book, Car Guys vs. Bean Counters”, former GM Vice Chairman Bob Lutz claimed: “There were rumblings from prominent Democrats that “if they get our money, they’re going to produce the kind of vehicles we want them to produce.”" This is the same Bob Lutz, by the way, who has taken to the pages of Forbes in recent months to bash right-of-center criticisms of the Volt (see: “Chevy Volt and the Wrong-headed Right,” “The Chevy Volt, Bill O’Reilly, and the Postman’s Butt,” and “I Give Up on Correcting the Wrong-headed Right about the Volt“). Lutz is also currently a paid consultant for GM, but I digress. [I'll add that the Volt was Lutz's baby with GM. -Steve.]

It’s no secret that the Obama administration (including Obama himself, who reassured the UAW that he’d personally buy a Volt when his presidency ended) has been flacking for the Volt for a long time — but that’s kind of unfortunate for them (and for GM) because it helps set the stage for what an abysmal failure the car has been.

Volt sales were actually up in March. They “soared” up to about 2,000 that month, and lefty environmentalists, GM, and the administration are trying to call it a success. GM CEO Dan Akerson (the White House’s handpicked guy) said all the criticism would fade away if they sold about 3,000 Volts a month.

Basically, they’re trying to play the expectations game, hoping we forget that GM had expected to sell about 5,000 Volts per month — and the administration (according to a DOE report) was counting on them selling 10,000 Volts per month this year. It’s worth noting, too, that Akerson testified before a House Oversight panel that they “didn’t engineer the Volt to become a political punching bag.” Funny — I didn’t hear any outcry when the Obama administration hyped the Volt in official government documents….

Anyway, now GM is trying to pretend that 2-3k/month is “success,” so I drew up this handy chart — attached as a PNG as well — think you can use it? [Absolutely! -Steve.]

Click to embiggen — that’s one scary-ass chart.

UPDATE: Hat tip to Mickey Kaus, who found an interesting (related?) item from TTAC. A commenter there calls it “felony stupid.” See if you agree:

    If you want to pretty-up the P&L of a car company, there are two quick fixes: You cut marketing expenses, or you cut R&D. A cut of R&D expenses won’t show up negatively for three to five years, when you suddenly lack new cars to sell. In the meantime, you look like a hero. General Motors plans to cut about a quarter of the workers at its R&D facility at the Warren Technical Center in suburban Detroit.

Kaus asks, “Why would GM cut R&D so profits look good in the short term? Is something happening in November?”

And that’s the problem with crony capitalism. Let’s pretend for a moment GM is making the right move here. But it would still appear that GM has made a political decision for Obama’s political gain.

Article printed from Vodkapundit: http://pjmedia.com/vodkapundit

URL to article: http://pjmedia.com/vodkapundit/2012/05/01/hide-the-decline-chevy-volt-edition/

 

[a_majoor]

Government subsidized competitors is about right:

http://american.com/archive/2012/july/the-essential-lesson-of-the-auto-bailout

The Essential Lesson of the Auto Bailout
By Steve Conover
Saturday, July 14, 2012

Filed under: Government & Politics

What do companies get when they act responsibly? Government-subsidized competition.

On July 5 in the swing state of Ohio, President Obama treated voters to his campaign-2012 synopsis of the 2009 auto industry bailout: "When the American auto industry was on the brink of collapse and more than one million jobs were on the line, Governor Romney said we should just let Detroit go bankrupt."

His message was clear: The Obama administration’s 2009 decision to bail out the auto industry allegedly saved it from the fate it would have suffered had Romney’s approach—bankruptcy—won the day.

The map below, adapted from the Ohio affiliate of the U.S. Census Bureau, shows automobile assembly plants in the Midwest and South, and helps to illustrate the “industry” in question. Red indicates companies rescued by the bailout; green indicates companies that didn’t participate in the bailout.

Also in his speech, Obama noted that top-down economics doesn’t work, and that risk-taking, hard work, and taking responsibility should be rewarded. The irony in that was easy to miss: The bailout was the government version of top-down economics, and the companies that had responsibly prepared themselves for surviving a downturn were not rewarded, they were penalized.

Although the campaign rhetoric may be effective with some of Ohio’s voters, anyone familiar with more than just the headlines of the 2009 auto bailout would know that it doesn’t stand up to scrutiny, for several reasons:

• The choice in 2008-2009 was not bankruptcy versus no bankruptcy; instead, the choice was between precedent-driven bankruptcy and White House-driven bankruptcy—rule-of-law versus rule-of-czar.

• The taxpayer bailout was not applied to the “American auto industry”—instead, it was applied only to the two failed companies, GM and Chrysler, bypassing companies that had been sufficiently prepared for the downturn, including Ford, Honda of America, Toyota, Nissan, BMW, and others.

• Orderly, rule-of-law bankruptcy might have led to continuing operations under restructuring for GM or Chrysler, in which case many auto-making jobs would have remained in Michigan.

• Alternatively, orderly bankruptcy might have led to a shutdown of GM or Chrysler and an open auction of assets—probably to surviving companies—in which case car buyers would have shifted to surviving companies’ products and auto-making jobs would have migrated to those same survivors. (When a grocery store closes, its customers don’t stop shopping, they take their business elsewhere; car buyers behave in the same way.)

• The notion that the White House should intervene with a specially designed bankruptcy process, thereby sidestepping rule-of-law bankruptcy, originated in the Bush White House in 2008, not in the Obama White House in 2009. A more honest name for the program would therefore be the “Bush-Obama Bankruptcy/Bailout” for Detroit’s two failed auto companies.

• Ironically, top-down economics was the de facto remedy applied to “save” GM and Chrysler—but in this case “top-down” was the government-knows-best notion that political wisdom, trickling down to displace a century of evolved bankruptcy case law, was supposedly a superior alternative for the two failed companies. Top-down economics, the politicians’ version of  “intelligent design,” directly rewarded GM and Chrysler with special-interest life support—instead of indirectly rewarding their surviving competitors with new customers and the necessary additional workers.

• For the record, the only thing that “saves” any company, not just auto companies, is a sufficient number of buying customers—not the government, not union bosses, and not incompetent management. It’s a truth that all but two of the American-based auto companies understood sufficiently to withstand the 2008 downturn without help from the taxpayers.

As of the 2008-2009 crisis, American workers in companies such as Ford, Honda of America, and Toyota had won the marketplace battle against GM and Chrysler for survival during hard times. They had planned successfully for a “rainy day,” proving their competiveness in the auto market. Unfortunately, however, they couldn't compete against the politicians in power, the rule-of-czar bankruptcy process, or intelligent design economics. When government wisdom, not consumer choice, decided which companies deserved to be kept alive and which types of cars consumers should decide to buy, it was the two failed companies that were rewarded; perversely, hard work and acting responsibly was not. What the responsible companies got was government-subsidized competition.

A more intellectually honest synopsis for Ohio’s voters would be something like the following:

When GM and Chrysler failed, Governor Romney’s approach would have been a rule-of-law bankruptcy process, followed by consumer-driven selection of the pecking order for American-based car companies. Instead, both the Bush and Obama administrations favored White House-directed bankruptcy, followed by life support for the two failed companies.

That begs a question: How many jobs in Ohio and elsewhere would the car-buying public have awarded to the responsible companies if Romney’s preferred approach had been the policy? Unfortunately, we'll never know. The unemployed who would have had new auto-making jobs don't even know who they are and therefore have zero political clout. That's a fatal disadvantage against the politically connected crony capitalists and union bosses who are skilled at employing intelligent design economics to protect themselves.

It’s also standing in the way of a new Golden Era for the U.S. economy; in the July 6 Wall Street Journal, Michael S. Malone summarized the problem in his article, “The Sources of the Next American Boom”:

Getting there won't be easy, as we are currently governed by leaders who want to manage our complex and dynamic economy from the top down, to tame entrepreneurs with regulation, to tax the productive and, ultimately, to pick the next generation of winners. That's never worked well and it isn't working today.

Not only will we never know the number of auto-industry jobs that would have migrated to Ohio and the Sun Belt, we’ll never know the answer to a final hypothetical question: Instead of spending taxpayers’ money to bail out two irresponsible car companies, might it have been better to invest it in a useful infrastructure project such as wider highways leading away from failed companies and towards the more responsible ones in Ohio and points south?

We shouldn’t expect an answer to that question anytime soon, let alone during campaign season.

Steve Conover retired recently from a 35-year career in corporate America. He has a BS in engineering, an MBA in finance, and a PhD in political economy. His website is www.optimist123.com.

 

[a_majoor]

Another government sponsored subprime loan bubble. You just know this is isn't going to end well....

http://news.investors.com/article/620090/201207271807/gm-risky-subprime-auto-loans-fuel-sales.htm

GM Ramps Up Risky Subprime Auto Loans To Drive Sales
By DAVID HOGBERG, INVESTOR'S BUSINESS DAILY
Posted 07/27/2012 06:07 PM ET

President Obama has touted General Motors (GM) as a successful example of his administration's policies. Yet GM's recovery is built, at least in part, on the increasing use of subprime loans.

The Obama administration in 2009 bailed out GM to the tune of $50 billion as it went into a managed bankruptcy.

Near the end of 2010, GM acquired a new captive lending arm, subprime specialist AmeriCredit. Renamed GM Financial, it has played a significant role in GM's growth .

The automaker is relying increasingly on subprime loans, 10-Q financial reports shows.

Potential borrowers of car loans are rated on FICO scores that range from 300 to 850. Anything under 660 is generally deemed subprime.

Subprime Key Driver

GM Financial auto loans to customers with FICO scores below 660 rose from 87% of total loans in Q4 2010 to 93% in Q1 2012.

The worse the FICO score, the bigger the increase. From Q4 2010 to Q1 2012, GM Financial loans to customers with the worst FICO scores — below 540 — shot up 79% to more than $2.3 billion. The second worst category, 540-599, rose 28% from about $3.4 billion to $4.3 billion.

Prime loans, those above 660, dropped 42% to $676 million.

GM Financial provides just over 8% of GM's financing. Prior to 2006, GM's captive lending arm was GMAC, but GM sold a controlling stake in 2006. GMAC later renamed itself Ally Financial and continues to provide the bulk of GM's financing.

At the peak of the credit crisis and recession in late 2008, Ally announced that it would move away from subprime lending.

By spring 2010 GM's new management, led by North American executive Mark Reuss, wanted to move back into subprime, fearing that GM couldn't compete.

Subprime lending in cars is not as risky as in housing. Car loans are cheaper, so customers have an easier time making payments. When they do go into default, the cars can be repossessed and sold to recover some of the loss.

"The subprime market grew as a result of the recession," said GM spokesman Jim Cain. "Our experience, however, is that with proper management they are very good risks."

He points to GM's credit losses which have not risen above 5.5% since late 2010.

Nevertheless, since it acquired GM Financial, GM has seen its subprime loans grow from about 4.8% of sales in Q4 2010 to 8.2% in Q1 2012. The industry average is about 6%.

 

[Nemo888]

Do you post all these articles so they get picked up by Google Trends when it periodically searches the site? 

 

[a_majoor]

GM is also a $16 billion dollar anchor attached to the Canadian economy (through the fereral government's portion of the bailout) and Ontario is also in for a huge amount, although the number escapes me at the moment. So it should be every thinking Canadian taxpayer's concern about how GM is doing, since when they crater, it isn't just $50 billion of the US taxpayers wealth at risk, it is yours and mine as well....

 

[a_majoor]

And more reasons for concern by Canadian taxpayers (and of course our American cousins):

http://dailycaller.com/2012/07/30/mayhem-at-gm/

This wasn’t supposed to happen until Nov. 7: It’s like the last act of Titus Andronicus over at GM corporate headquarters.

Two weeks ago, Opel chief Karl-Friedrich Stracke presented numbers to Dan Akerson. Akerson fires him. Opel gets two interim chiefs in a week. Last Thursday, Opel’s new design chief Dave Lyon doesn’t even start his job. Today, media in the U.S. and Germany report that Lyon had been escorted from the building and to a waiting car by GM’s head of personnel. A day later, global marketing chief Joel Ewanick suddenly leaves. Instead of wishing him all the best for his future endeavors, GM spokesman Greg Martin puts a knife in Ewanick’s back: “He failed to meet the expectations the company has of an employee.”

I’m having trouble understanding all this. I’ve been told that after its Rattnerized bailout GM is “back,” a dramatic ”success story.” The president himself has boasted “General Motors is back on top.” Yet now a few weeks later Bloomberg says the company is in a “slump”–it’s right there, in the headline: “slump.” How can the bailed out, comebacked, turned around success story GM be in a slump when the U.S. auto market as a whole is growing rapidly? It’s almost as if an easily spun media wildly underestimated the problems at GM (and the inadequacy of the administration’s fixes) in a way that helped President Obama’s favored narrative (and pleased a major advertiser at the same time!) …

P.S.: Why is all this executive turmoil happening now? It’s very hard for an outsider to know exactly what is going on, but there are three theories. 1) GM CEO Akerson is panicking (Truth About Cars’ theory); 2) Akerson is kind of incompetent and hires people he then chases away or has to fire; 3) … I’m thinking of a third. … What’s the third? I know there’s a third. …

P.P.S.: I’d forgotten that in April, 2010 President Obama told the nation (in his weekly radio address)

“It won’t be too long before the stock the Treasury is holding in GM could be sold ….”

Two years later, the Treasury still owns more than 26% of GM. The stock price of the dramatic administration success story is too low to sell without taking gigantic, embarrassing losses.

Read more: http://dailycaller.com/2012/07/30/mayhem-at-gm/#ixzz22FuxKbDA

 

[a_majoor]

Well, more evidence that the GM bailout wasn't for the benefit of everyone, just the politically connected (read UAW):

http://dailycaller.com/2012/08/09/bipartisan-group-of-legislators-demands-stronger-probe-into-delphi-pension-scandal/?print=1

Bipartisan group of legislators demands stronger probe into Delphi pension scandal

4:33 PM 08/09/2012

Twelve lawmakers wrote to House oversight committee Chairman Rep. Darrell Issa and Senate Homeland Security and Governmental Affairs Committee Chairman Sen. Joe Lieberman asking that they expand current probes into a Department of Treasury scandal that left 20,000 non-union Delphi retirees without their pensions after the 2009 General Motors bailout.

The members — Sens. Rob Portman of Ohio, Thad Cochran of Mississippi and Roger Wicker of Mississippi, and Reps. Pat Tiberi of Ohio, Steve Stivers of Ohio, Mike Kelly of Pennsylvania, Dan Burton of Indiana, Bill Johnson of Ohio, Paul Gosar of Arizona, Marcy Kaptur of Ohio and Gregg Harper of Mississippi — are led by Ohio Republican Rep. Mike Turner.

“We are writing to request that the committees which you chair submit additional requests for documents from the Department of the Treasury and the Pension Benefit Guaranty Corporation (PBGC) on matters pertaining to the unjust termination of Delphi salaried retiree pensions in the federal government’s bailout of General Motors,” the lawmakers wrote. “As you may know, the pensions of Delphi salaried retirees were significantly reduced in the aftermath of the bailout, while their union counterparts were made whole. These retirees, regardless of labor affiliation or not, spent their careers working alongside one another and should not be treated differently in their retirement. This decision of the Auto Task Force, Treasury, and the PBGC continues to affect roughly 20,000 current and future retirees across the nation.”

The bipartisan support for this renewed investigation call — Kaptur is a Democrat — undercuts the Obama campaign’s accusations that his GOP rival, Mitt Romney, and Turner are trying to “politicize” this scandal.

Portman, who’s widely considered to be on Romney’s short list of potential vice presidential candidates, said in a statement that he has “met with these hard-working Ohioans who lost a significant portion of their pension benefits while other retirees from the same company received far better treatment.”

“The idea that the administration played politics with their pensions is beyond disappointing, and it deserves answers,” Portman said. “The administration’s decisions have caused pain and loss to thousands of workers and their families as a result of their reduced benefits. This matter deserves continued scrutiny from Congress, and the administration must be called upon to account for its decisions.”

This renewed investigation call comes in the wake of emails The Daily Caller obtained and first published on Tuesday showing that senior White House and Treasury officials were behind the termination of pensions for 20,000 non-union Delphi salaried retirees.

Those emails show that the Treasury Department, led by Secretary Timothy Geithner, was the driving force behind terminating those pensions — a move made in 2009 while the Obama administration implemented its auto bailout plan. The emails contradict sworn testimony in which several Obama administration figures have consistently said that the decision to terminate the pensions came from the PBGC. The PBGC is a federal government agency that handles private-sector pension benefits issues. Its charter calls for independent representation of pension beneficiaries’ interests.

29 U.S.C. §1342 maintains that the PBGC is the only government entity that is legally empowered to initiate termination of a pension or make any official movements toward doing so. (RELATED: Obama campaign says Romney wants to politicize Delphi pension scandal, despite his months of silence)

In their letter to the committee chairmen, the lawmakers express the desire to ensure that wrongs are righted in this case, and make sure those responsible for government wrongdoing are held accountable. “Given the nature of the correspondence made public at the House committee’s hearing on July 10, 2012, and in recent press reports, it is our hope that these additional requests will yield a thorough production from the Treasury and the PBGC,” they wrote. “We believe that these requests will ensure that Congress is provided full and complete disclosure and that these agencies are held accountable to the American taxpayers.”

On a conference call with reporters on Wednesday, Turner said there’s a suspicion that Obama administration officials committed illegal acts during this activity in 2009, but regardless, the actions were absolutely improper — and that the officials involved have misled congressional investigators during a series of several House oversight committee hearings.

“[The emails] show that the administration has been misrepresenting this process,” Turner said on the call. “They have previously said that the pension decisions were made by General Motors and they said they were by PBGC. The emails that are now surfacing clearly show that this was run by Treasury in back door deals with the Auto Task Force, the PBGC and, of course, General Motors — [which was] acquired by the taxpayers through the Treasury. [It was] all being coordinated through the Treasury Department, resulting in what we believe may be illegal activity — but is definitely improper activity.”

Representatives for Issa and Lieberman haven’t immediately returned TheDC’s requests for comment on the letter.


Read more: http://dailycaller.com/2012/08/09/bipartisan-group-of-legislators-demands-stronger-probe-into-delphi-pension-scandal/#ixzz23D53Jovr

 

[a_majoor]

And the accounting. GM's losses are in the same order of magnitude as our national deficit, which should give everyone pause. Don't forget, both Canada and Ontario own portions of GM as part of the bailout, so these losses will fall, in part, on us:

http://www.detroitnews.com/article/20120813/AUTO01/208130392

Treasury: U.S. to lose $25 billion on auto bailout
By David Shepardson
Detroit News Washington Bureau

Washington -The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That's 15 percent higher than its previous forecast.

In a monthly report sent to Congress on Friday, the Obama administration boosted its forecast of expected losses by more than $3.3 billion to almost $25.1 billion, up from $21.7 billion in the last quarterly update.

The report may still underestimate the losses. The report covers predicted losses through May 31, when GM's stock price was $22.20 a share.

On Monday, GM stock was trading down 6 cents, or 0.2 percent, to $20.49. At that price, the government would lose another $850 million on its GM bailout.

The government still holds 500 million shares of GM stock and needs to sell them for about $53 each to recover its entire $49.5 billion bailout.

Treasury spokesman Matt Anderson said the costs were still far less than some predicted.

"The auto industry rescue helped save more than one million jobs throughout our nation's industrial heartland and is expected to cost far less than many had feared during the height of the crisis," Anderson said.

The Obama administration initially estimated it would lose $44 billion on the bailout but reduced the forecast to $30 billion in December 2009.

Republican presidential candidate Mitt Romney has decried the losses on the auto bailout and insisted that forcing GM and Chrysler Group LLC to go through bankruptcy first would have saved taxpayers money.

But President George W. Bush — who gave the automakers and their finance arms about $25 billion in his final weeks in office in bailout funds — said there wasn't time.

Taxpayers incurred a $1.3 billion loss on the $12.5 billion bailout of Chrysler.

The Treasury also has put on hold an initial public offering initially planned for last year in Ally Financial Inc. because of market weakness. The government holds a 74 percent majority stake in the Detroit auto finance company as part of its $17.2 billion bailout and has recovered $5.7 billion.

GM CEO Dan Akerson told employees at a town hall meeting Thursday that the company was working to take actions to boost the automaker's sagging price.

dshepardson@detnews.com

(202) 662-8735

From The Detroit News: http://www.detroitnews.com/article/20120813/AUTO01/208130392#ixzz23SIxdbXZ

 

[a_majoor]

There is also a $3 billion dollar lawsuit outstanding against GM by Spyker, the company that purchased SAAB AB, so lots of money is now at risk. The extralegal scheming that was done to make a government bailout possible is the proximate cause of this lawsuit, and I can imagine that if it is even partially successful, many other people who were cheated (particularly the bondholders who were cut out) will be back looking for justice:

http://business.financialpost.com/2012/08/07/us3-billion-lawsuit-could-unravel-new-general-motors/

US$3-billion lawsuit could unravel new General Motors
Tiffany Kary, Bloomberg News | Aug 7, 2012 9:02 PM ET | Last Updated: Aug 7, 2012 9:07 PM ET
More from Bloomberg News


The new General Motors Co. could be undone by a lawsuit that pits general creditors against hedge funds including Elliott Management Corp. and Fortress Investment Group LLC over US$3-billion, the car company said in a lawsuit that went to trial Tuesday.

A trust for creditors of the old, bankrupt part of the automaker now known as Motors Liquidation Co. sued the hedge funds in Manhattan bankruptcy court in March, alleging that while GM was preparing its bankruptcy filing on June 1, 2009, four hedge funds, which held notes in a Canadian unit of GM, “saw an eleventh-hour opportunity for profit and pounced.”

The trust seeks to have a US$2.67-billion claim and a US$367-million payment negotiated for holders of notes in GM’s Nova Scotia unit disallowed or reduced, saying the hedge funds seek more than three times what General Motors actually owed them. The amounts, agreed to as part of a settlement known as the “Lock-Up Agreement” resolved a dispute the hedge funds had brought over an intercompany claim GM’s Nova Scotia Finance unit had against GM Canada.

Related
Spyker sues GM for US$3B over Saab bankruptcy

GM ousted marketing chief over Manchester United Contract: sources

General Motors, the currently operating automaker which split off from the bankrupt unit through a purchase of its assets July 10, said the trust’s objections “threaten to disturb” the sale that saved the U.S. automaker, allowing it to prosper.

“New GM intends to participate in the trial of the claims objection to the extent required to protect and preserve the sale order,” lawyers for the company wrote. The company said that if the lawsuit undoes the lockup agreement, it could spawn new lawsuits, and create a “chaotic situation” for GM Canada, as well as all creditors, who are being repaid through warrants to buy stock in the new company.

The trial before U.S. bankruptcy Judge Robert Gerber in Manhattan will partly revolve around whether the lockup agreement was finalized before GM’s 7:57 a.m. petition.

The notes at issue, 8.375% notes due 2015 and 8.875% notes due 2023, recently traded at US43.9¢ and US43.8¢ on the dollar, respectively, according to Trace, the bond price reporting system of the Financial Regulatory Authority.

The trust says four hedge funds, pushing for maximum advantage as they negotiated through dawn in the offices of Weil Gotshal & Manges LLP, an adviser to GM’s Canadian subsidiaries, didn’t finish the agreement until 9:21 a.m. on June 1. Furthermore, a precondition of the agreement — the consent of two-thirds of the noteholders — wasn’t obtained until June 25, more than three weeks later, the trust said it will show at trial.

The two other funds, Appaloosa Management LP and Aurelius Capital Management LP, have sold their notes and no longer have a claim in the case. Morgan Stanley & Co. International PLC, a unit of Morgan Stanley, has joined Fortress and Elliott in court papers arguing against the trust’s lawsuit.

Since the agreement wasn’t completed until after General Motors actually filed for bankruptcy protection, it requires bankruptcy court approval, which was never obtained, the trust said, adding that the hedge funds misrepresented the agreement as ending before the bankruptcy in order to evade court scrutiny.

In a pretrial brief, the noteholders say the allegations “have always been a pure fabrication” and that they negotiated at General Motors’ request for the benefit of all holders of notes in the Nova Scotia unit to satisfy an intercompany loan that would have also bankrupted its Canadian unit. The agreement satisfied the loan “at a substantial discount” and the settlement was approved by the U.S. and Canadian governments in the early morning of June 1, the hedge funds said.

The trial began Tuesday with no opening arguments. A trustee for the Canadian unit, Peter Wedlake, testified that he had the authority to examine aspects of General Motors’ Nova Scotia Finance Co., but did not.

The trust has said the hedge funds “hand-picked” Mr. Wedlake, whom they had worked with on investment schemes before, to be a trustee for the Nova Scotia notes and had already worked with him on a lawsuit against the Nova Scotia unit and some of its officers and directors.

After getting the US$367-million “consent” fee, the noteholders waited until just over 90 days before petitioning for the Nova Scotia unit’s bankruptcy, Mr. Wedlake testified. Under bankruptcy law, sums transferred out of an estate before 90 days before a bankruptcy filing can more easily be clawed back for sharing among all creditors.

General Motors said the agreement was important for it because it resolved the dispute over intercompany loans and allowed the U.S. and Canadian governments to buy GM Canada without creating a separate bankruptcy for it. Without the ability to do that, the company would have immediately liquidated, giving creditors of the old GM nothing, lawyers for the automaker say in court papers.

“The Governments (especially the governments of Canada and Ontario) wanted New GM to acquire GM Canada as part of the 363 sale without having to file GM Canada,” lawyers for GM wrote in court papers. In order to do so, GM Canada needed to “compromise” the intercompany loans GM Canada owed to the Nova Scotia unit.

If any changes were made to the documents after the bankruptcy petition was filed it was to “clean up a scrivener’s error,” GM says in court papers.

Paulson & Co. funds, also investors in the two tranches of Nova Scotia notes, said in court papers that as part of the settlement, the noteholders “gave up a lot in return” including the intercompany claim, worth US$1.334-billion, which was forgiven under the agreement.

Before the lockup agreement, the face amount of the claims held by the notes was less than US$1-billion, the trust has said in court papers.

Judge Gerber’s wind-down order in 2011 sealed the government-backed separation of the automaker’s liabilities from its most profitable operations, which took place in 2009. Motors Liquidation Co.’s plan repays general unsecured creditors through a trust. The trust is set up to pay general unsecured creditors through receive stock and two series of warrants, one with an exercise price of US$10 a share that expires in July 2016, and another with an exercise price of US$18.33 a share that expires July 2019, court papers show.

The main bankruptcy case is In re Motors Liquidation Co., 09-50026, U.S. Bankruptcy Court, Southern District of New York (Manhattan). The adversary case is Motors Liquidation Company GUC Trust v Appaloosa Investment Limited Partnership I, 12- 09802, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

Bloomberg.com

 

[a_majoor]

By the numbers. Continuing weak sales by GM (and indeed the auto industry in general) could also put this in the US economy or election 2012 spot, but we will focus on automobiles here:

http://pjmedia.com/instapundit/  (on 04 Sep 12)

I WONDER IF WE’LL HEAR A LOT ABOUT ELECTRIC CARS AT THE DNC? Chevy Volt production to be suspended for a month.

UPDATE: Pushback from Volt-owning reader Matt Hennessy:

    Volt sales hit a record of 2831 in August, beating out the following GM products:

    Buick Lucerne – 10
    Buick Regal – 2072
    Cadillac DTS – 11
    Cadillac Escalade – 1264
    Cadillac Escalade ESV – 742
    Cadillac Escalade EXT – 183
    Cadillac STS – 7
    Cadillac XTS – 2158
    Chevrolet Avalanche – 2294
    Chevrolet Aveo – 1
    Chevrolet Caprice – 731
    Chevrolet Captiva sport – 2464
    Chevrolet Corvette – 1210
    Chevrolet Spark – 2630
    GMC Canyon – 702
    GMC Savana – 1545
    GMC Yukon – 2211
    GMC Yukon XL – 1594

    Plus, the lease deal in August was pretty attractive.

    Also, the NADA used guide price for a 2011 Volt is only 10% below the post-subsidy price. I’m pretty glad I got mine, as well as having been able to claw back some of my 2011 taxable income (and I was able to get all $7500, since I currently get no benefit from mortgage interest, child tax credit, or state tax deductions/subsidies). The fact that it cost GM (and taxpayers) more than they sold it to me for just makes it a better deal for me.

    Enjoy $4 gas!

Well, I drive a hybrid so it’s not so bad.

ANOTHER UPDATE: Reader Ron Binns emails:

    The Buick Lucerne, Cadillac DTS, Cadillac STS, and Chevrolet Aveo were all discontinued in 2011; one would hope their sales would be low, since GM has been holding on to them for over a year. The GMC Canyon was discontinued as well.

    The Chevrolet Caprice is only available to law-enforcement agencies (it’s not sold to the public), and the Chevrolet Captiva Sport is sold only to fleet buyers, so it’s unsurprising that they haven’t been selling as well as a massively-hyped car sold to the general public. The Chevy Spark is only available in 18 markets, and was on sale for 18 days.

    And further, when you consider that the GMC models are nothing more than spiffed-up Chevrolet offerings (the Avalanche and the Yukon are identical, and together easily outpace the Volt), and the Volt is only offered by one marque, the list becomes even weaker, because the remaining GMC models are selling quite well under their Chevy badges. The Cadillac Escalades (all three versions) are lightly reworked versions of Chevy and GMC models.

    Eliminating them, we’re down to only the Buick Regal and the Chevrolet Corvette. Somehow, I don’t think that GM ever conceived the Corvette as a volume vehicle. Hyping the Volt as “selling more than the Buick Regal” doesn’t sound nearly as impressive as the list your correspondent compiled, does it?

And reader Tony Goodhew writes:

    Hey Glenn,

    You’ve probably had a ton of mail on this but I thought I’d share the August truck top 3 with you:

    1. Ford F-Series – 58,201
    2. Chevy Silverado – 38,295
    3. Ram (all) – 25,215

    I think it’ll take a while for the Volt to charge up to those numbers.

    37 MPG isn’t at all bad (What PopMech measured with the engine running) but given the 30-odd mile range that they got off battery and the fact that I can drive my truck over another 100K miles before we’ve spent equal money I think I’ll stick with my 2003 F-150 (which I bought surplus from WA State for $6k).

Now there’s a deal. And reader Chris Jonkman emails: “Matt’s email is not proof of the success of the Volt; it is simply a better illustration of the failure of GM. The 20th bestselling car in August according to http://online.wsj.com/mdc/public/page/2_3022-autosales.html still sold almost 16,000 units. The fact that GM has that many models at sales levels that pathetic is not a reason to celebrate the use of our tax payer money.”