Obama’s (Un)American Auto Bailout

CHARLOTTE, N.C. — Cue “Fanfare for the Common Man” and rev up the Government Motors engines. Wednesday is Great American Auto Bailout Day at the Democratic National Convention. Party propagandists have prepared a prime-time-ready film touting the “rescue’s” benefits for American workers. UAW President Bob King will sing the savior-in-chief’s praises.

But like all of the economic success stories manufactured by the White House, the $85 billion government handout is a big fat farce.

“I said I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” Obama bragged on the campaign trail. Here’s the inconvenient story they won’t tell you:

GM is once again flirting with bankruptcy despite massive government purchases propping up its sales figures. GM stock is rock-bottom. Losses continue to be revised in the wrong direction. According to The Detroit News, “The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.”

The claims that GM paid back its taxpayer-funded loans “in full” — a story peddled in campaign ads narrated by Hollywood actor Tom Hanks — were debunked by the Treasury Department’s TARP watchdog this summer. GM still owes nearly $30 billion of the $50 billion it received, and its lending arm still owes nearly $15 billion of the more than $17 billion it received. Bailout watchdog Mark Modica of the National Legal and Policy Center adds: “In addition to U.S. taxpayers anteing up, Canada put in over $10 billion, and GM was relieved of about $28 billion of bondholder obligations as UAW claims were protected. That’s an improvement of almost $90 billion to the balance sheet, and the company still lags the competition.”

While the Obama administration wraps the auto bailout in red, white and blue, it’s foreign workers and overseas plants that are reaping redistributive rewards.

GM has increased its manufacturing capacity in China by an estimated 55 percent after the bailout, according to industry watchers. GM’s Dan Akerson crowed at the Beijing auto show earlier this year: “One of our aims is to help grow a new generation of automotive engineers, designers and leaders right here in China.” The U.S. auto giant’s ventures with the Communist regime include Shanghai OnStar Telematics Co., Ltd.; GM China Advanced Technical Center; FAW-GM Light Duty Commercial Vehicle Co., Ltd., in Harbin, Heilongjiang; FAW-GM’s Changchun plant in Changchun, Jilin; FAW-GM Hongta Yunnan Automobile Manufacturing Co., Ltd., in Qujing, Yunnan; and Shanghai Chengxin Used Car Operation and Management Co., Ltd.

In Europe, the UAW’s appointee to the Government Motors Board of Directors, Steve Girsky, recklessly pushed the feds to hold onto GM’s failing German-based Opel AG. The Great American Auto Bailout has been subsidizing this hemorrhaging enterprise while Obama failed to deliver on his 2008 campaign promise to salvage plants like the one in GOP vice presidential candidate Paul Ryan’s hometown of Janesville, Wis. According to Forbes magazine, “GM Europe, comprised mostly of Opel and its sister brand, Vauxhall, lost $617 million in the first half of 2012, on top of a $747 million loss in 2011 and a $1.8 billion loss in 2010. In all, GM has lost almost $17 billion in Europe since 1999.”

While Team Obama lambastes GOP rival Mitt Romney for outsourcing, Government Motors is now planning to invest $1 billion over the next five years — not in America, but in Russia. That’s on top of $7 billion total in China, close to $1 billion in Mexico, and $600 million for a shirt sponsorship deal with Manchester United, the British soccer club.

The DNC will put a rank-and-file U.S. autoworker on stage to back up Big Labor’s cheerleading of the deal. Rest assured, this human shield will not tell viewers how Obama and the union bosses colluded to pervert bankruptcy law and shaft some 20,000 nonunion Delphi auto parts workers. The forgotten victims saw their pensions erode by up to 70 percent; their health benefits disappeared. The first lady is radio silent. Obama consigliere Valerie Jarrett ducked questions about the Delphi injustice from The Washington Times here in Charlotte.

Only in a fantasyland where America has 57 states, “JOBS” is a three-letter word and bailouts are “achievements” does Obama’s rescue math add up. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry,” Obama vows. God help the American worker.

  • http://twitter.com/PhilSilverman7 Phil Silverman

    Do you actually believe that Barack Obama believes there are 57 states? that is not befitting a true nonelitist like you. Re. tthe “bailout” – something tells me that Obama IMPLEMENTED the TARP of yours and Roger Ailes’ presumptive hero, George W. Bush. You work at Fox which employs about half of the Bush adm., the purpose of which is obviously to rewrite his “legacy”. They wil be upset with you for associating Obama with such a wonderchild as W.! 

  • jdog

    Government picking winners and losers is suicidal economics. Had GM gone through normal bankruptcy proceedings, been forced to trim the waste and perhaps avoid or rewrite at least a portion of the deadly trap of its legacy union contracts, it might well have had a chance to be competitive again. Instead GM was rewarded for its excesses and not forced to become more efficient, and the union fat cats went home happy. You can’t impose competitiveness by government decree. GM has to earn its market share. True bankruptcy is thus all the more likely in GM’s future. Hopefully a Romney administration will not be so foolish as to bail GM out again.

  • Count_E_Limerick

    Offsetting Investor Yang with Goon Yin,
    He tried to make a more Perfect Union.
    It still inspires my mirth –
    Must pay to Control the re-Birth
    Now Obama can’t get his Communion!

  • Count_E_Limerick

    Bondholders chafe how dirty we do ‘em,
    But the Fed’s Word is not its Bond. True, mmm?
    But what really hurts –
    The way we lose our shirts,
    In Europe! So I say, “Soccer to ‘em!”

  • JohnInMA

    I thought I read somewhere that there will be ads by past Delphi employees about how the government’s actions leading the GM restructuring left them in such a bad spot.  If true, there will at least be a few voices to counter the cheer leading from the convention.

    And adding to the article’s points about all of the problems GM still has, many of the car models are not fairing well against the competition, either.  Trucks and SUVs are still sellers.  By contrast, Ford has been introducing models that compete well in the market.  To pick one example, the Fiesta meets or beats the competitors in most reviews and ratings, especially in key areas of comfort and economy.   Sales have been higher than originally planned.  Ending Mercury and creating a single brand global rival a la Toyota is paying dividends already.  Time will tell if they will be successful at making Lincoln a Lexus/Infiniti/Acura class rival.

    Meanwhile GM continues its 20th century business model with multiple domestic brands and different overseas brands.  And there is still some overlap in the buyer’s eyes between Buick and Cadillac, at least for certain models.  Even Chrysler has a more modern brand line up, with little confusion or overlap between Chrysler or Dodge, and even with Fiat models to be made available domestically.

    GM may require 2 to 3 times the original dollar amount to work themselves out of a hole and join the 21st century.

  • Deny916

    Enough is enough on the Government Motors bail out already.  They screwed the Delphi workers already and forced GM to close DOZENS of profitable dealerships and STILL want more money.  Somebody has to say no eventually. 

    Personally I think that the government fabricated the whole mess regarding Toyota vehicles just to knock them out and give GM a “fresh” start at being #1 again–and it didn’t work.  It didn’t work because when you make crap that people don’t want (the Volt for example) no one is going to buy it.  Hopefully someone will let Government Motors RIP!

    Michelle I love watching you on Fox News!  You are never at a loss for words and you are always accurate!  Still praying for Marizela!!!!!!!!!!

    • http://twitter.com/PhilSilverman7 Phil Silverman

      R U kidding? there was no private interest at the time and JOBS were needed. How is it a failure when Gm and Chrysler are selling cars and hiring like mad? Do you really detest this obviously partisan move?

  • Bruce A.

    How many bailouts can the taxpayers afford to give GM?  Saying no would force GM to do what has to be done to survive & leave a more efficent & stronger company for the future.  This come from my experience as a business owner.

  • Wheels55

    Even Walt Disney couldn’t make this stuff up. Barack “Tinkerbell” Obama spreads his magic dust around to all unions.
    Beware if you are a bond holder.

    • http://twitter.com/PhilSilverman7 Phil Silverman

      Oh yeah? I guess Bush II was proto-Tinkerbell.