If you remember correctly, the US federal government
bailed out GM because, according to President Obama in a 10 Dec13 speech, “one
million Americans were in danger of losing their jobs.” What do we, the American
taxpayers get for saving this iconic developer of second rate vehicles, the
president went on; “in exchange for rescuing and retooling GM and Chrysler with
taxpayer dollars, we demanded responsibility and results.” Even liberals have
to admit by 2014 this line of responsibility, accountability and results coming
from the weakest national administrator in US history are truly just community
organizing pablum. Many people don’t even know that the U.S. government lost
$11.2 billion on its bailout of General Motors Co (GM.N), more than the $10.3
billion the Treasury Department estimated when it sold its remaining GM shares
after the 2012 election, according to a government report. Ironically (or under
this president we can now call it standard) the US taxpayer took the brunt of
the incompetence of GM/federal government leadership. For all the “income inequality”,
“pay your fair share” and “even the playing field” garbage spewing from our
president’s pie hole; he routinely sacrifices the middle class taxpayers’
dollars to serve his own selfish liberal objectives.
Since the bailout, we have learned that GM’s
leadership at all levels from CEO to UAW Shop Stewards attempted to cover up inadequacies
in product safety and protect their collective assses by hiding real data
pointing to defects that led directly to the loss of consumer lives. Until they
were caught, GM did nothing. Since they are now caught GM paid a $35 million
fine and agree to "unprecedented oversight requirements" as part of a
deal with the U.S. Department of Transportation over its recent recalls. Sound
familiar? Exactly how unprecedented can the oversight be in 2014, when our illustrious
federal government had already “demanded responsibility and results”, during
the bailout oversight period (the exact same time the defects were discovered).
GM has recalled millions of cars in recent months and already taken or
announced charges of about $1.5 billion. A faulty ignition switch in some older
cars has been linked to 13 deaths, and GM has now expanded a safety push to
other models with other defects, not unexpectedly.
The deal with the National Highway Traffic Safety
Administration (NHTSA) covers GM's "failure to report a safety defect ...
in a timely manner." The fine—the maximum allowed by law—represents
roughly two hours' worth of GM's revenue or about one month's profits, based on
its results in the first quarter of 2014. The consent order between the two
sides also requires GM to give the NHTSA full access to the results of GM's
internal probe into the recalls. Now GM has a new CEO and what does she say, "We
have learned a great deal from this recall. We will now focus on the goal of
becoming an industry leader in safety," GM CEO Mary Barra said in a
statement. "We will emerge from this situation a stronger company." Sound
familiar?
The point of this post is not to focus on the lame
leadership of President Obama, but point out how dangerous and costly it is for
the US federal government to get involved directly with industry. If we had
followed the normal course of bankruptcy in the GM case, two outcomes would
have certainly been different and perhaps a third might have never materialized.
In a normal bankruptcy, taxpayer funds would not have been lost, creditors
would have demanded transparent operations in order to make sure the company was
working its way out of debt and maybe, just maybe people would not have been
killed by this morally and soon to be financially bankrupt company.
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