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Featured

Obama: Car Companies Get 30 Days; Better Plans or Bankruptcy

By Roy Edroso, Monday, Mar. 30 2009 @ 11:03AM
Comments (4)
Categories: Politics, The Money Trail, Transportation
obamapress020909.jpgThe Obama Administration rejected the General Motors and Chrysler plans and GM CEO Rick Wagoner resigned at the President's request. The President just announced the next steps. Wagoner's ouster, he said, is not a "condemnation" but "a recognition that it will take a new vision and new direction to create the GM of the future." Because the car companies and industry "must ultimately stand on their own, not as wards of the state," Chrysler and GM will be given another 30 days to cook up a better plan; Chrysler is under the gun to find a partnership with Fiat or somebody. If they come up with something Obama can approve, they will be lent up to $6 billion to effect their plans; otherwise, bankruptcy.

Also, owners of GM and Chrysler cars learned "starting today the US Government will be standing behind your warranty." There will be incentives, including a trade-in program to give car owners a price break for turning in their less fuel-efficient cars. Obama told the folks in Flint and other cartowns that he can't promise there won't be tough times, but "I will fight for you," and that he intends to "make America's auto industry in the 21st century what it was in the 20th century - unsurpassed around the world."

You'd think conservatives would be delighted that the socialist Obama Administration is threatening to let the magic of the market work on the car companies, but the American Spectator cries fascism. Expect more of this as the day progresses.

Comments (4) Write Comment
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Comments (4)

Brittancus says:


When the auto industry has huge overheads for health insurance for the thousands of personnel , and even more for retirees that are receiving health benefits. It is no wonder their businesses can't make a decent profit. Their saddled with billions of dollars from a health industry, that have questionable practices. Isn't that why we voted for President Obama , to bring in a single payer health care system? Not with what we are going to get--auditors, not doctors in wealthy insurance companies dishing out limited services. Being a moderate voter I think one of the most important issues to get Americans back to work is Health care? Large and small businesses in this America have to negotiate with the middle man--Insurance companies!

They are the inter-mediator, we can well do without? If car manufacturing companies didn't have to pay extra for health care for it's hundreds of thousands of workers. Then we would be on a level-playing-field, with our foreign competitors who are subsidized by their governments? Why is it European countries like France, United Kingdom have a single payer system through the government that--WORKS! The usual critics have everything to gain, and so much more to lose--they will put every obstacle in the way of Universal health care. Before Britain was invaded by immigrants under the European Common Market, my family had excellent Social health care.

Every employer and every worker paid into the system and the outcome insured you of hospitalization, doctor visits, specialists, eye and teeth care. Then of course the majority of upper class Americans don't like the idea, because they can well afford the co-pays, premiums that the insurance companies add to their exorbitant fees. But then they get the best service, including home visits. The mechanics of health care in the US is no different to England's, including sitting in the waiting room and seeing the physician. If you needed to see a specialist you was referred by letter. The Democrats will state they are working for the American people, but for some that's an outright fallacy? It's unlikely we will never get rid of the greedy insurance companies--until we have taxpayer Campaign contributions for many corrupt politicians. Same with E-Verify for US Workers, because big business didn't like being cut off from cheap illegal labor. Of course the special interest lobbyists, will distort the truth to get voters to deny the 47 uninsured Americans (NOT ILLEGAL ALIENS) peace of mind--for--OUR--families and children.

Posted On: Monday, Mar. 30 2009 @ 12:29PM
Joanne Pacicca says:

These business mogels honestly believe that they can use the same tactics to manipulate the government as they have in collusion with Wall Street. Obama ain't having any of it. Good for him...and good for us!

Posted On: Monday, Mar. 30 2009 @ 12:34PM
jaqphule says:

Far be it for me to defend the yahoos over at the American Spectator, but where exactly do you see Obama "using the market"????

Government guarantee of warranties is possibly the stupidest idea to ever come out of the government.

"If you want more of something, subsidize it"


Behavior incented includes:
- relaxed quality standards of auto manufacturers. They're not going to have to pay when their, uh, excrement breaks.
- increased graft at warranty repair shops. Nobody's looking over their shoulders to audit quality repair any more.

Additional costs include:
- who's going to pay to manufacture new replacement parts if/when the auto manufacturers go under? Who's going to administrate the whole product management/supply chain? Who owns all that intellectual property of designs when it goes under? If it is to be nationalized, it lessens the potential value of the bankruptcy and drives current, pre-bankruptcy book value even further down.
- the cost of warranty repair over time is paid for by a percentage of new car sales. If GM goes under, imagine the black hole sucking value out of the economy -- with a decrease in productive real output to boot.

Economic facism? That's a remarkably accurate way to term this morass of idiocy.

Posted On: Monday, Mar. 30 2009 @ 4:23PM
Auto Transport says:

Agree with Joanne here. Greedy auto makers that run their companies into the ground shouldn't get special treatment. Go Obama!

Posted On: Saturday, Dec. 12 2009 @ 11:00PM

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