Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: General Motors

Samsung to Expand in United States, Bringing Back 500 Jobs From Mexico

This article appeared online at TheNewAmerican.com on Wednesday, March 8, 2017:

English: Samsung Logo Suomi: Samsungin logo

The South Korean behemoth maker of consumer electronics, semi-conductors, ships, and telecommunications equipment was reported by the Wall Street Journal (quoting unnamed inside sources) to be investing $300 million in facilities in South Carolina and simultaneously bringing 500 jobs back from Mexico to work there.

It’s a tentative decision, according to Samsung in a statement it made to the Journal, with the company noting that “this is a complex process that, like all strategic business decisions, will not be made final until it is determined through proper due diligence and planning that it is the best option for Samsung.”

In ordinary times such a modest investment, made under such indeterminate conditions with such disclaimers, would hardly rate a few column inches at the back of the business section. But these are hardly ordinary times,

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New Job Announcements Before Inauguration More Political than Economic

This article was published by The McAlvany Intelligence Advisor on Wednesday, January 18, 2017:

President-elect Donald Trump has mercilessly hammered American companies with overseas operations, and the message is coming through loud and clear: bring them back, keep them here, or pay dearly once he is in office.

Ford changed its plans, cancelling a project in Mexico and expanding a facility here. Fiat did the same as did Toyota. Sprint’s plans to add new jobs coupled with Lockheed Martin’s willingness to work with Mr. Trump even before he is president all reflect the new reality: Trump plans to keep his campaign promises and create jobs here.

What makes the recent announcements by General Motors and Walmart suspicious is that they not only are timed to appear just before the inauguration, but they also

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GM, Walmart, Amazon Announce New Jobs Ahead of Trump’s Inauguration

This article appeared online at TheNewAmerican.com on Tuesday, January 17, 2017:

English: Trump

First it was Amazon, announcing last week that it will be creating 100,000 new full-time jobs in the United States over the next 18 months. Said Jeff Bezos, Amazon’s CEO, “These jobs are not just in our Seattle headquarters or in Silicon Valley, they’re in our customer service network, fulfillment centers and other facilities through the country.” When in place Amazon will be employing nearly 300,000 people in the United States.

President-elect Donald Trump was pleased to take some credit,

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Fiat Chrysler Announces $1 Billion Investment in U.S., Creating 2,000 Jobs

This article appeared online at TheNewAmerican.com on Wednesday, January 11, 2017:

Italiano: Sergio Marchionne

Sergio Marchionne

Fiat Chrysler Automobiles (FCA), the American arm of Fiat-Chrysler, announced on Sunday that it was investing $1 billion in expanding its plants in Warren, Michigan, and Toledo, Ohio — a move which would result in 2,000 new jobs by 2020: “Consistent and combined with previously announced investments, FCA US is further demonstrating its commitment to strengthening its U.S. manufacturing base, and aligning U.S. capacity to extend the Jeep product lineup.”

Some have speculated that

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Multi-nationals Are Leaving Venezuela, Selling Out at Fire Sale Prices

This article appeared online at TheNewAmerican.com on Wednesday, November 16, 2016:  

Over the last year, General Motors, Ford Motor Company, auto parts maker Dana, Clorox, Kimberly-Clark, Bridgestone Tire, and Liberty Mutual have either sold out their Venezuelan interests at huge losses, have given their factories and properties away for free, or are planning to. Those who used to work for them are now working in another profession: as bachaqueros. This is slang for “giant ants,” used as a pejorative to describe street vendors offering their wares in the black market.

General Mills sold its operations at half the assessed value, while Dana was lucky

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Driverless Cars to Disrupt Industry, Benefit Consumers

This article first appeared online at TheNewAmerican.com on Thursday, May 21, 2015: 

English: Google driverless car operating on a ...

Google driverless car operating on a testing path

 

Brian Johnson, in his “Disruptive Mobility” report issued by Barclays Bank on Tuesday, sees that a future with driverless cars will mean far fewer cars on the road, a much smaller GM and Ford, and consumer travel costs cut by two-thirds. A generation from now there will be just 100 million cars on American roads (compared to 250 million today), and new car sales will fall below levels touched at the bottom of the Great Recession: less than 10 million a year.

This means that, unless they adapt and adopt new strategies, and perhaps a new business model, General Motors and Ford will likely be vastly smaller enterprises than they are today. He predicts that

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Auto Loan Bubble a Replay of Housing Mortgage Bubble?

This article first appeared online at TheNewAmerican.com on Monday, January 12, 2015:

When Patrina Thomas decided it was time to trade in her 2002 Jeep in the summer of 2013, she went back to her local friendly Chrysler dealer. They were only too happy to take her Jeep as a down payment on a used 2008 Chrysler Sebring with the balance, an estimated $10,000, financed at 20.4 percent interest. Because her credit score was below 620, she qualified for “special” financing provided by Santander Consumer USA Holdings, a lender working closely with Chrysler Capital in such cases.

Her payment was so high — $385 a month — that she struggled to make it from the very first month. It finally got beyond her ability to pay, and the car was repossessed a year later. With a market value today of just $4,600 and her remaining loan balance of $7,600, she is upside down by $3,000.

Thomas has lots of company. According to the Wall Street Journal

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GM Bailout Cost Taxpayers far more than just $11 Billion

General Motors HydroGen4

General Motors HydroGen4 (Photo credit: Wikipedia)

The Detroit Free Press’ announcement on Wednesday that taxpayers lost more on the General Motors bailout in 2009 than originally thought was brief, to the point, and missed most of the real story behind the GM bailout. Taxpayers lost $11.2 billion following the government’s sale of the last of the stock it held in GM following the company’s government-assisted bankruptcy and restructuring, according to the announcement.

The key quote from a Treasury spokesman, however, was revealing. Said Adam Hodge:

The goal of Treasury’s investment in GM was never to make a profit, but to help save the American auto industry, and by any measure that effort was successful.

Not if one was a bondholder in GM. Not if one believed that

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Is the Dingell Dynasty in the House Over?

This article first appeared at The McAlvany Intelligence Advisor on Friday, March 7, 2014:

The encomiums poured in following the announcement by John Dingell (D-Mich.) last week that he wouldn’t be seeking a 30th term in the House. Tweeted Gary Peters (D-Mich.): “Today we honor the service and legacy of Michigan’s greatest Congressman. His accomplishments will never be forgotten.” Such praise would reasonably be expected from a hard-left progressive like Peters who

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Age and Acrimony End Dingell Dynasty in the House

Born in Colorado Springs in 1926, John Dingell (D-Mich.) took over from his father as a Representative from Michigan in 1955 and has never stopped promoting his father’s progressive agenda. On Monday, February 24th, Dingell announced that he would not seek a 30th term partly due to

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Monumental Hubris in Claim of Taxpayer Victory in GM Bailout

 

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, December 11th, 2013:

In Treasury Secretary Jacob Lew’s fawning, obsequious, genuflecting announcement that the president had singlehandedly saved western civilization from a cataclysmic economic disaster, he said that by taking a loss, taxpayers actually scored a victory:

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US Treasury sells the rest of its GM shares at a loss, claims taxpayer victory

Treasury Secretary Jacob Lew announced on Monday afternoon that his department had sold the remaining shares of GM that it acquired following the forced bankruptcy of the auto giant in 2009, and made the $10.5 billion loss sound like it was a victory:

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Former Treasury Secretary Geithner to head up private equity firm Warburg Pincus

Former Treasury Secretary Timothy Geithner announced his plans to join the Wall Street private equity firm Warburg Pincus in March 2014 where he will serve as president and managing director.

Geithner is the proto-typical insider with establishment ties that follow almost exactly

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Detroit: the First Domino to Fall

This article was first published at The McAlvany Intelligence Advisor on Monday, July 22nd, 2013:

 

The city of Detroit is living proof that Herb Stein is right: if something cannot go on forever, it will stop. For Detroit, it stopped last week when

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Cheap Abundant Natural Gas is a Game Changer, Says the IMF

Expressing surprise at the enormous increase in US production of oil and natural gas by unconventional means, Thomas Helbling, a division chief in the IMF’s (International Monetary Fund) Research Department, was forced to admit that it was free enterprise that was responsible for it after all. In his March 2013 article he wrote:

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Presidential Debate Questions from Michelle Malkin

God bless Michelle Malkin. I toyed with a few hard-ball questions for the Presidential Debate in a previous post. The temptation to do the same by Malkin was just too much. I don’t think the media, or Jim Lehrer (the moderator), will be calling either of us very soon.

American writer and blogger Michelle Malkin.

American writer and blogger Michelle Malkin. (Photo credit: Wikipedia)

Here’s Malkin:

We know the liberal media bias drill: Make the Republican candidate look like a scary extremist on social issues and a greedy capitalist pig on economic issues. Avoid the Democratic incumbent’s record of failure. Run out the clock. Thank you and good night.

Malkin wants them to talk about Fast and Furious, in light of Tuesday’s murder of another border patrol agent at the same spot where Brian Terry was shot two years ago. She gets a running start by reviewing the Fast and Furious scandal, and then quotes Homeland Security’s Inspector General which found that “violence has significantly increased against Border Patrol agents. Since 2007, assaults on agents have risen more than 35 percent, including 13 deaths.”

Here are her questions (edited slightly):

Why has the Terry family been forced to file a federal lawsuit to obtain justice?

Why does Attorney General Eric Holder still have a job?

What exactly are you doing (or will you do) to ensure that Border Patrol agents are adequately armed and supported in their mission to defend American sovereignty?

Then Malkin takes on “transparency”:

[Mr. Obama, as President] you famously declared, “A democracy requires accountability, and accountability requires transparency.” Yet, the very first act of your administration was to violate your transparency pledge to allow full, public viewing of all legislation five days before you signed it…

You failed to televise health care negotiations as promised. You cut endless backroom deals protected from public scrutiny. In addition, your administration has routinely evaded disclosure law by meeting with lobbyists off the books at D.C.-area coffee houses and private townhouses, where Secret Service background checks and login routines are abandoned…

How, exactly, can you claim to have run the most transparent administration ever based on your actual record?

Next up: the auto bailout:

[Mr. Obama] your campaign touts the “success” of the government takeover of the auto industry as one of your proudest accomplishments. In 2010, you bragged that “American taxpayers are now positioned to recover more than my administration invested in GM, and that’s a good thing.”

Yet, your Treasury Department won’t take up GM’s recent offer to repurchase 200 million of the roughly 500 million shares the U.S. holds — because it would incur a $15 billion loss to taxpayers right before the election. 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. Foreign workers and overseas plants have soaked up billions of American bailout tax dollars. But some 20,000 Delphi non-union workers saw their pensions eroded and health benefits disappear as part of the deal you cut with United Auto Workers.

How are Delphi workers, bondholders, car dealers and taxpayers better off now than they were before the Government Motors bailout given the actual record? If this is your proudest accomplishment, why on earth would reality-based voters want you back in the driver’s seat?

These are great questions. It’s too bad they’ll never be asked in public, especially by Lehrer who owes his career to the establishment mainstream media.

The Chevy Volt: King Obama and King Canute

John Ransom -The Chevy Volt: Another Obama Green Investment Loses a Billion

Today, I’m very pleased to announce that I have a new reason to dislike the Volt.

And it’s probably the best reason of all.

The Chevy Volt costs close to $90,000 to manufacture while it retails for $40,000 according to information gathered by Reuters.

Chevrolet Volts, Washington DC

Chevrolet Volts, Washington DC (Photo credit: mariordo59)

King Canute, as you remember, tried to “rule the waves” by commanding the tides not to come in. Here is Wikipedia on Canute:

Henry of Huntingdon, the 12th-century chronicler, tells how Canute set his throne by the sea shore and commanded the tide to halt and not wet his feet and robes. Yet “continuing to rise as usual [the tide] dashed over his feet and legs without respect to his royal person…”

King Obama has the same obsession: “If we force General Motors – now Government Motors – to build it [the Volt], they will come.”

Well, not so much. First of all, each vehicle costs $89,000 to build, but it sells for about $40,000. That’s bad enough. But it gets worse. When a vehicle is leased, the lease terms have been made so attractive – in order to draw people into leasing one – that it costs the owner just $5,000 over a two year lease! That’s the only way the Volt makes any sales – by essentially giving them away!  Ransom does the math:

10,666 Volts were sold in the first seven months of 2012. At an average loss of $49,000 per vehicle that’s a loss of $522,634,000.

A $523 million dollar loss on a car that won’t sell 20,000 units in 2012?

To put this in perspective, the company has probably shaved at least $4 billion off its market value by squandering money on the Volt. Right now the company is trading at about 8.31 times its earning.

Assuming GM didn’t produce the Volt at all and just held on to the cash savings, the $523 million in cash multiplied by the market value of 8.31 times earnings comes out to $4,343,088,540 in lost value for the shareholders.

Those shareholders are you and me.

It would be cheaper for the company to quietly ask potential Volt buyers if they would take a $40,000 check just to go away.

Of course GM is putting the best lipstick it can find for this pig:

We’re really seeing momentum continuing to build,” Michelle Malcho, a GM spokesman told the press a few weeks back according to the Detroit Free Press. “As people see their neighbors have one and as they start to understand the technology and are able to drive it, they put it into their consideration.”

You bet. That’s why Volts are flying out the door.

GM: Trying to Please Too Many Masters

Michael Barone: GM Goes From Bad to Worse Despite Obama Bailout

Obama talks about the auto bailout frequently, since it’s one of the few things in his record that gets positive responses in the polls. But he’s probably wise to avoid probing questions, since the GM bailout is not at all the success he claims.

The New GM (Government Motors) Proudly Introdu...

The New GM (Government Motors) Proudly Introduces the 2011 Obummer (Photo credit: wstera2)

Aptly (and properly, in my opinion) called Government Motors, the old GM is still on life support, but of a different kind: trying to please too many masters is keeping the company from being as competitive as it might be, and will cost taxpayers—you and me—more and more money to keep it going.

Obama thinks otherwise, and why shouldn’t he? He is enamored with government and thinks everything should be run or controlled by government czars. After all, that’s what collectivists do: they collect!

His recent speech in Colorado illustrates this well:

When the American auto industry was on the brink of collapse, I said, let’s bet on America’s workers. And we got management and workers to come together, making cars better than ever, and now GM is No. 1 again and the American auto industry has come roaring back.

Of course he and his auto czars had to stiff bondholders by skirting, illegally, the usual bankruptcy process, but, hey, this is socialism: we can’t let niceties like contracts and the rule of law get in the way! And if you were a GM dealer who wasn’t connected to the Obama administration, well, sorry about that, you’ll have to go.

And how’s GM doing? Well, profits just dropped 41 percent, and its stock is at $21, down from $40 when it went public following the bailout. Government still owns some 500 million shares, which translates into a loss to taxpayers approaching $25 billion.

And according to Louis Woodhill, an auto analyst at Forbes, GM is likely headed for bankruptcy once again.

Government Motors indeed.

Arithmetic, not Paul Ryan, is Medicare’s True Enemy

Steve Chapman: Ryan and the Real Enemy of Medicare

President Barack Obama’s campaign has a new ad accusing Ryan and Mitt Romney of a scheme “ending Medicare as we know it.” But the real enemy of Medicare “as we know it” is not Ryan. It’s arithmetic.

Paul Ryan Caricature

Paul Ryan Caricature (Photo credit: DonkeyHotey)

This is an interesting point of view. It’s not very sexy and not eye-catching like the Obama story: ending Medicare as we know it. But it’s true: left alone, Medicare will end itself, all by itself.

Says Chapman:

Medicare is the second biggest item in the entire federal budget and one of the fastest growing. Over the past 30 years, its cost has doubled as a share of our gross domestic product, and over the next 30, it’s on track to double again.

At the rate we’re going, Medicare, Medicaid, Social Security and interest payments will consume the entire federal budget by 2025.

That’s called unsustainable.

And Ryan’s approach does two things: it protects those already in the system, and gives those not in the system time to adjust:

His chief reform is to shift from a defined-benefit program, which obligates the government to cover all costs, to a defined-contribution approach, which commits the government to provide a fixed amount of money for each recipient.

Chapman is honest about Ryan:

Not that he has a stellar record in this or other areas of the budget. In the past, he’s been the fiscal equivalent of a chicken hawk: tough until it’s time to put his own survival on the line.

He voted for President George W. Bush’s plan to furnish prescription drug coverage to seniors, adding $8 trillion to the government’s unfunded obligations. He voted to bail out General Motors. He voted for TARP.

He did more than his share to help Bush add $5 trillion to the national debt.

All that aside, I think the real enemy of Medicare is that it violates the Constitution. The fact that it is unsustainable helps point out its fatal flaws. But to me the biggest flaw is getting the government involved where it doesn’t belong. And you can’t fix that through reform.

Uncertainty: Free Market Bugaboo

Imprimis: John Steele Gordon

[During the Great Depression] unemployment, over 25 percent in 1933, was still at 17 percent as late as 1939. Indeed, in 1937, when the economy suddenly turned south again, there was a problem: what to call the new downturn. Most people thought the country was still in a depression, so that word wouldn’t do. But economists, delighted to have a problem that they could actually solve, came up with the word “recession,” and that’s what we have been using ever since.

Great Depression Bread Line

Great Depression Bread Line (Photo credit: martnpro)

The similarity to the “recession” of 1937 to our present circumstances scarcely needs mentioning. Roosevelt’s continued tinkering and illogical (ideological) interfering with the market trying unsuccessfully to correct itself meant that entrepreneurs were frozen into inaction—just like today.

Explains Gordon:

Usually, when there has been a steep decline in economic activity, recovery is equally steep. The valley is V-shaped. That is what happened in 1920, when there had been a severe post-war depression and then a strong recovery.

So why was the recovery so slow in the 1930s? One reason, according to an increasing number of economic historians, is that Franklin Roosevelt had a bad habit of changing his mind. While highly intelligent, he was no student of economics and seldom read books as an adult. So much of his program was, essentially, seat-of-his-pants policy…

But markets, which can function even in disaster with ruthless efficiency, hate uncertainty. When uncertainty regarding the future is high, they tend to tread water. As a result, there was what is known as a “strike of capital.” While corporations often had large cash balances—General Motors made a profit in every year of the Great Depression—and banks had money to lend, there was little investment and few loans made. Both the banks and the corporations were too uncertain about what the government was going to do next.

This surely sounds familiar: a “strike of capital” is what we’re seeing today.

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.