Workers matter to Obama. Union workers, that is…

March 7, 2011

And if you’re not in a union? Then you can expect a kick in the backside, instead of a pat on the back. It seems that while reorganizing General Motors, Treasury Secretary (and tax cheat) Timothy Geithner protected the benefits and pensions of union workers while gutting those of non-union employees:

Republican Reps. Mike Turner of Ohio and Dan Burton of Indiana are asking House Oversight Committee Chairman Darrell Issa, California Republican, to dig into the Obama administration’s decision to cut more than 20,000 private-sector workers’ pensions and eliminate their health and life insurance plans during the General Motors (GM) bailout in 2009.

A spokesman for Issa’s committee told The Daily Caller the committee “remains interested” and is “looking forward” to findings from an ongoing Government Accountability Office investigation, which is expected to come out within the next couple of months. What Turner and Burton are saying happened during the GM bailout is that Treasury Secretary Timothy Geithner decided to cut pensions for salaried non-union employees at Delphi, a GM spinoff, to expedite GM’s emergence from bankruptcy. The problem with that, according to the congressmen, is that Geithner decided to fully fund the pensions of union workers involved in the process – including workers associated with United Auto Workers, Steelworkers and the IUE-CWA.

“This is a terrible injustice. This is a political decision, not a legal or financial decision,” Turner said in a phone interview with TheDC. “There were people who were penalized and people were chosen as winners and losers. The White House, the administration and the Auto Task Force (ATF) decided who were going to receive their pensions and who were not.”

Bear in mind that this wasn’t some sharing of the burden, no spreading the pain around (rather than the wealth). The Delphi employees saw their pensions savaged while union workers had theirs made whole — at taxpayer expense.

Further on in the article, it becomes clear that the complaint of the Delphi employees (at least those interviewed) is that they didn’t share in the largesse. While I can sympathize, to have bailed them out, too, would have been wrong. What should have happened is a GM bankruptcy that would have cleared existing contracts and brought in new management to try to restore the company to health. Yes, it would have been more painful short-term for everyone, but much better for the regional and the American economies in the long run than the current zombie corporation, which exists only as an appendage of the government.

(Oh, and bondholders wouldn’t have been strong-armed out of their rights, either.)

That said, this picking of winners and losers is another illustration of who the administration thinks its real constituents are.

Just look for the union label.

(Crossposted at Sister Toldjah)

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My God. What have they done to General Motors?

July 30, 2010

I was the proud owner of a ’64 Impala for many, many years, and my family always bought GM. But… O, how the mighty have fallen! First they’re bought by the government, then they introduce the Volt, an all-electric car that costs only $41,000 and can take you a whopping 40 miles before it needs recharging! (Or switching to a gas engine that will pollute only a little bit…)

But now, the nadir. Where once auto shows had rock music and hawt babes to sell their cars, now GM gives us… this:

I wonder if they told those dancers they’d be performing to the eco-warrior’s theme from The New Zoo Review?

Poor GM.

(via Iowahawk)


Race and gender at play in auto dealership closures?

July 22, 2010

Or was it payback for rural counties not voting for Obama in 2008? The BlogProf looks at the report by Troubled Asset Relief Program (TARP) Inspector General Neal Barofsky. It certainly seems … suggestive.

Hope and Change?

(via Sister Toldjah)

UPDATE: Ed at Hot Air takes a different angle, seeing the closures as an example of making economic decisions based on the needs of political theater, in this case the need to demonstrate shared sacrifice.


How GM did not pay back its loan

May 1, 2010

At Reason.TV, Nick Gillespie explains just how big a lie GM Chairman Ed Whitacre has been telling in those recent commercials in which he brags of paying off the company’s government loans early and in full:

Yes, GM and the Obama administration really do think we’re that stupid.


They really do think we’re that stupid

April 26, 2010

Late last week, I started seeing commercials from General Government Motors announcing to the world that GM had paid off its government loan – early and with interest. I thought that was good news, a sign that the company was recovering, jobs would be saved, and the government could unwind the majority ownership stake it had taken in the company.

Then the other shoe dropped and I realized we were being played for suckers:

Uncle Sam gave GM $49.5 billion last summer in aid to finance its bankruptcy. (If it hadn’t, the company, which couldn’t raise this kind of money from private lenders, would have been forced into liquidation, its assets sold for scrap.) So when Mr. Whitacre publishes a column with the headline, “The GM Bailout: Paid Back in Full,” most ordinary mortals unfamiliar with bailout minutia would assume that he is alluding to the entire $49.5 billion. That, however, is far from the case.

Because a loan of such a huge amount would have been politically controversial, the Obama administration handed GM only $6.7 billion as a pure loan. (It asked for only a 7% interest rate–a very sweet deal considering that GM bonds at that time were trading below junk level.) The vast bulk of the bailout money was transferred to GM through the purchase of 60.8% equity stake in the company–arguably an even worse deal for taxpayers than the loan, given that the equity position requires them to bear the risk of the investment without any guaranteed return. (The Canadian government likewise gave GM $1.4 billion as a pure loan, and another $8.1 billion for an 11.7% equity stake. The U.S. and Canadian government together own 72.5% of the company.)

But when Mr. Whitacre says GM has paid back the bailout money in full, he means not the entire $49.5 billion–the loan and the equity. In fact, he avoids all mention of that figure in his column. He means only the $6.7 billion loan amount.

But wait! Even that’s not the full story given that GM, which has not yet broken even, much less turned a profit, can’t pay even this puny amount from its own earnings.

So how is it paying it?

As it turns out, the Obama administration put $13.4 billion of the aid money as “working capital” in an escrow account when the company was in bankruptcy. The company is using this escrow money–government money–to pay back the government loan.

In other words, they used their Visa to pay off their American (Taxpayer) Express. Pardon my language, but this is bullshit.

The American people are still bailing out a company that should have been allowed to go bankrupt, the US and Canada still own nearly three-fourths of the company, and not a dime has been repaid. All they did was move money from one pocket to the other.

And the worst part is that Treasury and their lackeys at GM think we’re such gullible children that we wouldn’t see this for the insulting con game it is.

Congratulations, guys, you’ve given us something else to remember in November.

LINKS: Sister Toldjah, Dan Mitchell, Hot Air, Fausta, Power Line (and here).

RELATED: Senator Grassley is not amused.