Considering the enormous amounts of cash that the federal government has hurled at the auto industry since the start of the financial crisis, recipients of government largess in Detroit should at least have the common courtesy of telling taxpayers what they’re doing with their money. Unfortunately, United Auto Workers boss Ron Gettelfinger doesn’t seem to think that applies to him or his union. So kudos are in order to Rep. Jeb Hensarling for calling out Gettelfinger and the UAW on this:
The…
If anything could make finding yourself out of business overnight any worse, it is to have to pay a penalty for it. That’s what now threatens some GM and Chrysler dealers whose factory agreements are not being renewed as part of those companies’ government-led restructuring. Many of those soon-to-be-defunct dealers may find themselves exposed to having to pay withdrawal penalties into the union pension funds into which they will no longer pay.
Now, the Detroit automakers overextended their dealer networks —…
Your faithful host Richard Morrison welcomes back special guest co-hosts William Yeatman and Michelle Minton for Episode 46 (listen HERE!). We start with the investors that are getting worked over by the politically-distorted bankruptcy of Chrysler, the ascension of the Swedish Pirate Party to the European Parliament and the Great Porn Wall of China. We then move on to proof that beer is better for you than water, a sign that airline travel may get more expensive, and an example of how voters deal…
Kudos to the judges on the Second Circuit U.S. Court of Appeals for putting a stay on the Obama administration’s nationalization scheme for the bankruptcy sale of Chrysler LLC. Kudos also to Indiana state Treasurer Richard Mourdock for standing up for the middle-income teachers and police officers in the state pension funds and making sure that contracts affecting their retirement savings are respected.
When President Obama announced the Supreme Court nomination of Sonia Sotomayor, who coincidentally is an appeals court judge on the Second Circuit,…
The federal government is spending more than $50 billion to bail out General Motors, with no end in sight. But the UAW union refused to sacrifice its privileged position to save the company, demanding excessive wages and benefits that are much higher than most Americans get. The Obama Administration caved in to its demands, saddling GM with high labor costs that may doom the company in the long run.
As the Washington Post notes today, the “concessions” that Obama obtained from the UAW were…
The federal government is giving another $30 billion in taxpayer money to General Motors to allow it to operate without having to cut excessive union wages. The Obama Administration is “gambling” on its ability to turn around the company under government control.
The Obama Administration has said it will now interfere not just with the “selection of the company’s board of directors,” but also in “fundamental corporate decisions,” and “major corporate events and transactions.” For example, Obama recently pressured GM to keep its headquarters…
Last week, in nominating Judge Sonia Sotomayor to the Supreme Court, President Obama praised judicial qualities that are directly relevant to the courts that will now oversee the bankruptcy of General Motors. The president said that the qualities he most respected in judges were, ”a commitment to impartial justice, a respect for precedent, and a determination to faithfully apply the law to the facts at hand,” as well as “an understanding of how the world works and how ordinary people live.”
As…
Most of the $800 billion stimulus package has yet to be spent, but it’s already harming the economy, both by triggering trade wars that have cost at least 40,000 jobs, and by driving up interest rates for businesses that need to borrow money to expand or create jobs. (The government is keeping down interest rates on its own debt by printing vast sums of money to buy its own bonds, in order to finance the exploding national debt, which will result…
Even the liberal Washington Post, which endorsed Obama and has not backed a Republican for president since 1952, is getting fed up with the Obama Administration’s wasteful and politicized bailouts of General Motors and Chrysler. Today, it laments the
“imminent transformation of General Motors into a government-owned company, infused with upward of $50 billion in federal money.” “It doesn’t take much imagination to forecast the political pressures that will buffet the government-as-auto-executive. We’ve seen one effect already in the preferential treatment of the autoworkers’…
Obama accused critics of his decision to give control of Chrysler to the United Auto Workers Union of being “speculators.” But it turns out that many of them are pension funds representing the interests of retirees, who are being fleeced to enrich the politically better-connected UAW.
“Indiana Treasurer Richard Mourdock revealed this week that his state’s police and teacher pension funds have lost millions of dollars in the Chrysler ‘restructuring.’ Indiana’s State Police Fund and Major Moves Construction Fund, which finances roads…
The Obama Administration is now seeking to give the United Auto Workers Union a big chunk of General Motors, at the expense of taxpayers and bondholders (including non-union retirees). If Obama gets his way, the UAW will receive at least ten times as much value ($10 billion plus 39 percent of the company) as the bondholders (who get no money and 10 percent of the company) even though the bondholders are owed more ($27 billion vs. $20 billion). This is neither legal…
Today’s Wall Street Journal further drives home the difficult position in which the United Auto Workers, Chrysler, and General Motors are likely to find themselves as a result of the UAW becoming part owner of GM and majority shareholder of Chrysler. First, the lead editorial notes the political risks inherent in the arrangement:
Some Treasury officials have told the media that 50% government ownership is important to ensure that taxpayers get repaid for the $16.2 billion in Treasury loans. But this…
The United Auto Workers’ (UAW) loud complaining that they’re being asked to bear a disproportionate share of the costs of restructuring the Big Three begs the question: How much is their fair share to bear? As Holman Jenkins notes, in his Wall Street Journal column, the UAW may not like the answer.
The two parties that turned the Big Three into a perennially limping freak of unwritten industrial policy now will take formal ownership of their handiwork. The United Auto Workers…
On the surface, given the economic turmoil we’ve had, there was nothing that remarkable about the bankruptcy of shopping mall owner General Growth Properties (GGP). Late last week, GGP filed for Chapter 11 bankruptcy, an action that some had been expecting for months given its debt of almost $25 billion.
GGP was the second largest mall owner in the country — with properties including Chicago’s Water Tower and the DC area-Tyson’s Gallleria – and filed for what has been described the biggest U.S. real…
Your hosts Richard Morrison and Cord Blomquist are joined by special guest co-host Jeremy Lott for a very swashbuckling Episode 38 of LibertyWeek. We start with the rescue of Capt. Richard Phillips from Somali pirates by the U.S. Navy and Special Forces, look into the murky finances of AIG CEO Edward Liddy in Scandal Watch, and figure out what ISPs are up to in Technology News. We also get an update on how West Virginia is about to become even more Wild and Wonderful, and finally we…
Ironically, by getting rid of General Motors CEO Rick Wagoner, the Obama Administration has made it even harder for it to demand the painful changes needed to make the company competitive — meaning that the billions of additional dollars the Administration plans to dump on GM will likely be wasted (the way that England’s attempt to bail out its automakers failed, wasting billions). As Mickey Kaus notes,
“After visibly defenestrating GM CEO Rick Wagoner, and moving to replace the board of directors, won’t Obama…
The ouster of General Motors CEO Rick Wagnoner by the Obama administration isn’t the first time in the recent history of bailouts that the government has forced out a CEO. That first happened in September when Bush admnistration Treasury Secretary Henry Paulson forced out American International Group CEO Robert Willumstad in favor of Paulson’s friend Edward Liddy.
The lesson from AIG is that replacing a CEO is no panacea. There is no love lost for the poor managment of Rick Wagoner. He…
Throughout the Detroit automakers’ bailout saga, the United Auto Workers’ leadership has claimed that the union has made enough major concessions to date, and that demands for it to make more, from company and government officials, are attempts “to make workers shoulder the lion’s share of the costs of any restructuring plan.”
If the UAW leadership is so concerned about the union’s rank-and-file bearing the costs of the Detroit automakers’ restructuring, there’s one item on which it could easily save millions for…
The Bush administration’s outline of its automaker bailout package lists some seemingly sensible changes in labor practices that GM and Chrysler need to make. (Ford, to its credit, is seeking private financing instead.)
Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:
Reduce debts by 2/3 via a debt for equity exchange.
Make one-half of VEBA payments in the form of stock.
Eliminate the jobs…
In early 2007, the economy was humming along and General Motors was considered to be in the process of a turnaround. To help stabilize itself, the company was considering buying its smaller, money-losing rival Chrysler.
But it faced a stumbling block in the form of antitrust law. According to analysts looking at a potential merger, the government would consider a combined GM and Chrysler too big and powerful with the ability to drive competition out of the market. The Wall Street…
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