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Showing posts with label Chrysler. Show all posts
Showing posts with label Chrysler. Show all posts

Saturday, November 3, 2012

Obama's Own "Let Detroit Go Bankrupt" Destroys Foundation of Campaign

Mitt Romney’s factually-accurate but mischievous Jeep ad baited the Obama campaign into admitting that the charge against Romney (“Let Detroit Go Bankrupt”) on which its campaign is based is false.

Romney’s TV spot: “Obama took GM and Chrysler into bankruptcy, and sold Chrysler to Italians who are going to build Jeeps in China,” is 100% factually accurate. That is its beauty.

Yes, it is true that the Obama administration took GM and Chrysler through Chapter 11bankruptcy. GM and Chrysler shares became worthless and their creditors lost most of their investments. Chrysler was indeed sold to Italy’s Fiat. Chrysler’s Jeep has indeed announced that it intends to produce Jeeps in China.

The Jeep ad brought forth a furious counter attack by Obama operatives, media allies, and self-appointed “independent” fact checkers. In its cry and fury, the Obama juggernaut made a fatal mistake: They admitted that Obama “let Detroit go bankrupt,” as Romney proposed. Staunch Obama supporter, the LA Times, could not bring itself to utter the dreadful word: “Chapter 11.” It chose instead to call what happened at GM and Chrysler “brief bankruptcy restructurings.”

A self-declared (but really democrat) independent fact checker really stepped in it with its dismissal of the nefarious and outrageous (but true) Romney ad:
“It’s also misleading to say ‘Obama took GM and Chrysler into bankruptcy’ without mentioning that Romney, too, advocated a bankruptcy plan. In fact, Romney wrote a 2008 op-ed that said: ‘A managed bankruptcy may be the only path to the fundamental restructuring the industry needs’.” At last, we have the two candidates agreeing on a truly important issue. ( I guess you would love to take that back).

Note the irony: After three years of “I saved the auto industry and Romney wanted Detroit to go bankrupt” in his stump speeches, the Obama team is using Romney to defend the Detroit bankruptcies Obama orchestrated. You mean Bain capitalist Romney did not want to decimate both Detroit and the Ohio auto industry as you have been telling us?  So Obama “saved” millions of auto jobs by following Romney’s advice?

But wait, the LA Times is ready with the standard Obama comeback:  Obama forced GM and Chrysler through a government imposed Chapter 11 because “other sources of financing became unavailable during the recession.”  Not true at all. The treasury could have provided a neutral bankruptcy court with the small amount of creditor-in-possession financing at no taxpayer risk needed to reorganize GM and Chrysler at a small fraction of the $80 billion it actually spent.  With its recognized brand, billion dollar revenues, and inflated costs begging to be pared, GM would have attracted bidders out of the Gazoo, even in 2009.

When cornered with this truth, Obama supporters will play the blame-Bush-game: “Well Bush provided government funds to keep GM and Chrysler running as he passed the baton to Obama. Yes, but then Obama should say: “Bush saved Detroit, not me.” Strange, but I have yet to hear these words.
Although the two candidates are on the same “let Detroit go bankrupt” page, their approaches could not have been more different. Obama used government pressure and blackmail to reward his UAW allies. He knew that the UAW wage and pension contracts could not survive the regular bankruptcy proceeding that businessman Romney wanted. Obama is now getting his payback. Organized labor is his biggest contributor and the organizer of the fabled Obama “ground game.”

Main Stream Media: Where were your fact checkers when Obama was distorting Romney’s “let Detroit go bankrupt”? You seem to notice only when Mitt finally played hardball and reversed the tables.

Where is the Obama apology:  “American voters: Forget what I said earlier. Both Mitt and I agree to ‘Let Detroit Go Bankrupt’.”

Paul’s recommendation: Read Good Intentions, By Bob Zeidman, before voting.

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Thursday, September 6, 2012

Fibbing With GM Job Creation Statistics, Bill Clinton Edition

From Bill Clinton‘s Democratic National Convention speech, September 5, 2012

“Now there are 250,000 more people working in the auto industry than the day the companies were restructured. Governor Romney opposed the plan to save GM and Chrysler. So here’s another jobs score: Obama two hundred and fifty thousand, Romney, zero.” Wild applause.
Clinton attributes the 250,000 new jobs created to domestic and foreign auto manufacturers, parts suppliers, and dealers located in the United States to the Obama-directed bankruptcy of General Motors. Without the President’s bold and decisive action, these quarter million new jobs would not exist, and U.S. manufacturing would not have been “saved.”

Clinton gets his figures from the Bureau of Labor Statistics, which shows that U.S. auto manufacturers (both domestic and foreign owned) employed 624,400 at the time of the bankruptcy (June 2009) and now employ 789,500 — an increase of 165,100 jobs. Auto dealers employed 1,009,700 in June 2009 and 1,081,200 today — a gain of 71,500 jobs.  The two gains add up to 236,600 jobs (Clinton’s 250,000).
Sorry, President Clinton. There is no way you can you attribute the 236,600 job gain to the General Motors bailout. According to the carmaker’s annual report, GM North America employed 70,000 in the United States in June of 2009 (the rest were in Canada and Mexico) and 74,500 today, for a net gain of 4,500 jobs. Of the auto manufacturing job increases, GM accounts for only two percent.

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Monday, August 27, 2012

On the Failed Job Creation Front, Obama Has Completely Run Out of Ideas

Unemployment is the millstone around President Obama’s neck in the 2012 election campaign. Attentive voters understand he is offering excuses — a worse-than-expected economy, financial crises requiring longer recoveries, bad luck of tsunamis, droughts, and the Euro — not solutions. Obama cannot deliver solutions because a real jobs program contradicts his core principles, alienates his base, and infuriates his crony contributors. He can only promise more of the failed policies –stimulus and tinkering — of his first three and a half years
Obama’s last foray into job creation was his American Jobs Act (AJA) submitted to Congress on September 12, 2011.  Labeled “Stimulus 2” by its critics, Obama’s shopworn list of remedies, promised to “put more people back to work and put more money in the pockets of working Americans….without adding a dime to the deficit.” The AJA’s temporary tax credits to businesses that hire, extension of the payroll tax holiday, and more money for teachers and infrastructure stalled in both Houses and had to be taken up piecemeal.  The payroll tax holiday extension passed Congress. Small businesses decided his tax credits for hiring were not worth the trouble.

A deafening silence followed.  Obama’s vaunted Jobs Task Force has not met for more than a half year. Obama is out of ideas. He can only offer excuses, criticize those offering new solutions, and divert attention from the worst recovery in history with chatter about the rich not paying their fair share and his opponent’s tax returns.

One year ago, on the eve of the President’s jobs address, I wrote Why Obama Cannot Support a Real Jobs Program.  In this piece, I showed what a real jobs program looks like and how it largely would have increased jobs, to use Obama’s AJA message, “without adding a dime to the deficit.” Here is the substance of what I wrote then as advice to the President:

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Wednesday, April 25, 2012

American Airlines: The Way Bankruptcy Is Supposed to Proceed

American Airlines is in Chapter 11 bankruptcy supervised by a bankruptcy judge in federal court following normal procedures. American’s goal is to emerge from bankruptcy as a profitable concern.  All of American’s stakeholders – unions, creditors, management, etc. -- are represented and are fighting each other tooth and nail, as they should. American’s management wishes to abrogate union contracts that have made it the highest-cost carrier in the business. Management is trying to extract work rule concessions from reluctant unions. Unions are fighting to protect their contracts and pensions and minimize layoffs.  Another carrier, U.S. Air, is circling overhead, trying to lure stakeholders into a U.S. Air-American Airlines merger.

No matter what, jobs will be lost but probably not more than ten percent. Either a stand-alone American or an American merged with U.S. Air will emerge from bankruptcy, and all the interested parties will have defended their legitimate interests as best they can before an impartial judge. If all goes well, American can survive and make profits.

The American Airlines bankruptcy shows how the GM and Chrysler bankruptcies should have proceeded. Instead the of federal government grabbing the bankruptcy proceeding in a biased way towards the unions and to the disadvantage of creditors or potential third-party bidders, GM and Chrysler could have gone through a normal bankruptcy and emerged with lower costs, free from government diktat, and able to make  their own decisions.

The American bankruptcy case again exposes the emptiness of Obama’s claim that “he saved Detroit.”

Dr. Gregory's latest book can be found at

Monday, August 8, 2011

A Tale Of Three Thefts: China, Russia, And The U.S.

The denial of the rule of law for the few may affect the economic actions of many.

Russia 2006 
In December of 2006, Gazprom, the Russian energy monopoly, "accepted" control of Sakhalin-2 from Royal Dutch Shell (RDSA - news - people ). Sakhalin-2 is a drilling venture off Sakhalin Island in Russia's North Pacific. Shell negotiated the offshore drilling rights with the Russian government to be Sakhalin-2's owner and operator along with its two Japanese partners. In return, Shell agreed to invest $8 billion. Shell's deal was unusual because it included no Russian partner, but it was approved at the highest levels in 1994. As the end of 2006 approached, Sakhalin-2 was ready to go into production. Shell's investment had grown to $20 billion