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

Is General Motors Now China Motors? [VIDEO]

In less than 24 hours, Vince Wade’s YouTube video of General Motor’s CEO Dan Akerson’s speech touting the car company’s increasing investment in China has gone viral, with nearly 500,000 views. Noting that GM—derisively called Government Motors by some–received nearly $50 billion of bailout funds in 2009, Wade asked: “Did we bail out General Motors to have it become China Motors?” According to Akerson, GM now:

  • Makes almost 70 percent of its vehicles outside the US
  • Has more than 2,700 dealerships in China
  • Operates 11 assembly plants in China
  • Has 11 joint ventures in China with two Chinese government-controlled companies
  • Regards these joint ventures “as 11 keys to success.”

Akerson added:

Our commitment to working in China, with China, for China, remains strong and focused on the future. We’re now building out the advanced technology center which will bring our research and development that is centered largely in the United States…we’re going to diversify that more into China because we think this market is so critically important to the success of our company… [China] is the crown jewel in the GM universe.

As evidence that GM is willing to do business with the Chinese government as long as it’s profitable, Wade notes the largely unknown purchase of GM’s Saginaw Steering Gear facility, now known as Nexteer, for half a billion dollars in 2010, giving the Chinese government ownership of

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Hostess to Unions: No More Sugar for You

Hostess Twinkies. Yellow snack cake with cream...

When Hostess Brands, maker of Wonder Bread, Twinkies, and Ding Dongs, declared bankruptcy on January 12, it said it can’t make interest payments on its $860 million of outstanding debt and make payments into its unions’ pension plans as well. So it stopped making the pension plan contributions.

Ripplewood Holdings, the private equity firm that holds controlling interest in Hostess, said it won’t invest any more money into the company unless the unions renegotiate the pension plan obligations. Hostess’ president, Gregory Rayburn, said that the company “is not competitive, primarily due to legacy pension and medical benefit obligations and restrictive work rules,” and so he’s demanding that the unions reduce the company’s obligations, currently at more than $100 million a year, to just $25 million. The unions aren’t budging, and the case is going to court on Tuesday, April 17, where the matter will be settled. There is a possibility for a settlement, but if the court supports the company, the unions have promised to go on strike. That, according to Rayburn, will force Hostess to liquidate and go out of business.

That will also end the unions’ claims and leave the members out of work.

The last time Hostess declared bankruptcy in 2004, it took nearly five years to settle, and the union finally acquiesced, taking some equity in the company in exchange for pension liabilities. This time the unions appear to be ready to accept the worst. One Hostess worker said,

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U.S. Manufacturing Is Making Headway

Shipping containers at Port Newark-Elizabeth M...

The numbers posted at Investors Business Daily over the weekend by John Merline were impressive: U.S. manufacturing profits last year exceeded $600 billion, almost tripling since the bottom of the recession, while jobs in manufacturing have increased by 400,000 in the past two years. Unemployment in manufacturing has been below the national average for eight straight months, and the industry itself has been growing at three times the rate of the overall economy.

More jobs. Higher profits. Lower unemployment. Faster growth. All good. Economist Mark Perry is on board with the new robust sector: “By all relevant measures of economic performance…American manufacturing remains the shining star of the U.S. economy.” And this is taking place right under the noses of politicians who are decrying the perceived woes in manufacturing, such as Rick Santorum, who said:

We went from about 21% of jobs in this country when I was a kid being in manufacturing down to 9%. We lost those jobs overseas. We need to bring them back.

He may be right about the numbers but wrong about being worried about them. Manufacturing lost 7 million jobs since its peak in 1979 but the productivity of the workers remaining has improved enormously. According to Joshua Feinman, chief global economist at DB Advisors, “Productivity has grown much faster in manufacturing than in the economy as a whole.” In fact, despite the loss of jobs manufacturing output has tripled in this country since 1980 and the United States remains the largest

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Family Research Council: Individual Mandate Unconstitutional, Thus Whole Law

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On Monday the Family Research Council (FRC) filed a “friend of the court” (amicus curiae) brief with the Supreme Court that makes its case that if the mandate forcing citizens to purchase health insurance or pay a penalty is ruled unconstitutional, then the entire 2,700-page Patient Protection and Affordable Health Care law should be thrown out as well.

The brief, co-authored by two attorneys, Ken Klukowski and Nelson Lund, called the hotly contested mandate the “linchpin” for the entire law and if it fails, the whole massive superstructure fails with it. Klukowski stated:

After almost two years of impassioned debate, Obamacare will finally have its day before the Supreme Court. The “individual mandate” in Obamacare that requires all Americans to have health insurance is unconstitutional. And for the reasons we explain in this brief, 135 years of Supreme Court precedent show that this is one of those rare instances where striking down the individual-mandate provision requires the Court to strike down this entire 2,700-page law.

We have high hopes that the Supreme Court will recognize that the individual mandate is unconstitutional, and will act to safeguard the freedoms of all Americans by holding the individual mandate “nonseverable,” and strike down every part of Obamacare.

There is no “severability” clause in ObamaCare—it was deliberately left out during negotiations between the House and the Senate—which means that if part of the law is deemed unconstitutional,

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Ethanol Subsidies Disappear, Mandates Remain

English: A combine harvesting corn. Deutsch: J...

The Washington Post’s editorial celebrating the ending of ethanol subsidies iterated the same free-market positions taken by Rep. Ron Paul (R-Texas) and other Austrian school economists about those subsidies. Calling the 45-cent-per-gallon tax credit supporting U.S. corn-based ethanol production and the 54-cent-per-gallon tariff on imported ethanol “two of the most wasteful subsidies ever to clutter the Internal Revenue Code,” the Post estimated that ending those subsidies will save the U.S. taxpayer approximately $6 billion this year.

In a remarkable admission of undeniable truth, the Post added: “Taxpayers will no longer have [to] shell out roughly $6 billion per year for a program that badly distorted the global grain market, artificially raised the cost of agricultural land and did almost nothing to curb greenhouse gas emissions.”

Further, the Post rejoiced over the expiration of another “lesser known but equally dubious energy tax break…the credit that gave electric car owners up to $1,000 to defray the costs of installing a 220-volt charging device in their homes,” and said

As a means of reducing carbon emissions, electric cars and plug-in hybrid electrics are no more cost-effective than ethanol. What’s more, only upper-income consumers can afford to buy an electric vehicle (EV); so the charger subsidy is a giveaway to the well-to-do.

More surprising was the Post’s disappointment that the credit for

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Each Chevy Volt Costs Taxpayers $250,000

English: 2011 Chevrolet Volt exhibited at the ...

The Mackinac Center for Public Policy just released a study showing that by the time all federal and state loans, grants, subsidies, and tax credits are figured in, each Chevy Volt costs taxpayers upwards of $250,000.

James Hohman, the center’s assistant director of fiscal policy, counted a total of 18 government “deals” but didn’t include the fact that one-quarter of Volt’s manufacturer, General Motors, is owned by the federal government.

He counted not only incentives offered directly to GM or to the ultimate buyer, but also those offered to suppliers of parts and technology for the Volt. The Department of Energy, for example, awarded a $106 million grant to GM’s Brownstone plant that assembles the Volt’s batteries. The State of Michigan awarded $106 million to GM to retain jobs in its Hamtramck assembly plant. And Compact Power, the company that makes the Volt’s batteries, received $100 million in “refundable battery credits.”

Some of the subsidies and credits are extended over varying periods of time and some are dependent upon certain production “milestones” being achieved. He counted them all along with subsidies to companies vying to provide batteries for the Volt such as the support provided to A123 Systems. A123 lost the battery contract to Compact Power, but Hohman included their subsidies in his study as well.

The total of all subsidies, grants and credits is $3 billion: $2.3 billion in federal money and $700 million in Michigan’s money. That’s enough to purchase

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Government to Sell GM Stock Before It Declines Further

2011 Chevrolet Volt exhibited at the 2010 Wash...

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When the federal government took over General Motors in July of 2009, it was “the only way to avoid an economic calamity,” according to President Obama.

Stuffed full of $50 billion of taxpayers’ money, GM began to revive, a little. It had lost an amazing $103 billion over the previous five years, partly by acceding to union demands for generous compensation packages (including payments to workers even when the plants where they worked weren’t even running!), and partly by

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Donald Trump the Populist and Pragmatist

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The February 22nd Newsweek poll followed by the Wall Street Journal/NBC poll showing billionaire Donald Trump eclipsing his nearest Republican rivals and even challenging incumbent President Obama has caused some commentators to look past his rhetoric to see where “The Donald” really stands on major issues. Jonathan Hoenig, writing for SmartMoney.com, says that “Trump’s primary appeal is undoubtedly his business experience.

Given the nation’s festering inflation, exploding deficit and still moribund economy, there’s obvious interest in leaders who promote fiscal conservatism, capitalism and growth. The problem is: Donald Trump isn’t one of them.”

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GM’s IPO: Where’s the Weevil in the Hardtack?

Logo of General Motors Corporation. Source: 20...

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Steven Rattner, former counselor to Treasury Secretary Timothy Geithner, celebrated in Huffington Post, “In the end, it was a blow out!” With the old General Motors successfully selling shares in its new General Motors at $33 per share, taxpayers will allegedly be getting back part of the $50 billion in bailout money used to rescue the company 17 months ago.

As Rattner exulted:

The mother of all initial public offerings—that of the refreshed, revitalized and revamped General Motors—went off better than almost anyone expected….

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Chevy Volt Misses the Mark

Chevrolet Volt plug-in

Image by Argonne National Laboratory via Flickr

Now that the Chevy Volt, General Motors’ electric car, is about to arrive in selected dealers’ showrooms around the country, it has been getting a lot of press. Some are puff pieces, one of which appeared in USA Today, while others are much more critical.

According to James Healey of USA Today, the Volt “represents a staggering amount of engineering…which combines an electric motor…and a small gasoline engine to create a drive train that uses no gasoline for 25 to 50 miles, [and] then sips it.”

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GM Caught in a Lie, Still Owes U.S. Billions

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

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Daniel Akerson, the new CEO of General Motors, said last week that the rate of payback of U.S. government bailout monies “will be determined by GM’s performance over the next several years. It would be ‘unrealistic’ to pay the government back all at once.”

He added, “We want the government out. Period. We don’t want to be known as Government Motors…It’s a goal of this company to return that (federal money). [However] I don’t think that’s going to be [done] in one fell swoop. I think that’s unrealistic.”

This was a much different message from that delivered by his predecessor, GM CEO Ed Whitacre, back in March when he announced in a series of TV ads:

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Conjuring Magic To Cover States’ Debts

SACRAMENTO, CA - JULY 21:   A sign stands in f...

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The first warning about the possible bankruptcy of the town of Vallejo, California, was reported by the Associated Press on February 28, 2008, when Councilwoman Stephanie Gomes said, “Our financial situation is getting worse every single day. No city or private person wants to declare bankruptcy, but if you’re facing insolvency, you have no choice but to seek protection.”

Marci Fritz, vice president of the California Foundation for Fiscal Responsibility, blamed the action on promises made earlier by the council to the city’s employees concerning salaries and retirement benefits that the city no longer can afford. According to Fritz, these were promises made during economically flush times, and were due to the city council’s unrealistic expectations that those times would continue indefinitely.

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Can ObamaCare Be Repealed, Nullified?

Repeal ObamaCare

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U.S. Representative Michele Bachmann (R-Minn.), who has earned a “Freedom Index” rating of 90 percent in the current Congress to date, has introduced a bill in the House to repeal ObamaCare. In her press release, Bachmann reminded her constituents that “the government already owns or controls about one-third of U.S. economic activity through the takeover of General Motors, the bankruptcy reorganizations of Chrysler, the partial ownership of two of the country’s largest banks in Bank of America and Citigroup, and the seizure of mortgage giants Fannie Mae and Freddie Mac as well as AIG. Taken all together, [with ObamaCare] we’re looking at half of the American economy in the grip of the federal government.” Bachmann said that it “will do nothing to spur economic growth … [but] will serve only as an obstacle to actual recovery and smother the spirit of innovation and freedoms that made this country great.”

Her bill is simplicity itself:

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Citigroup Bailout Retrospective

Citigroup

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In the announcement that the U.S.Treasury was likely to make a profit selling its stock in Citigroup, much was made about the great returns that sale would generate, and very little was said about how it all happened in the first place.

The potential profit was estimated to be about $7.5 billion assuming that the price of Citigroup’s stock stays at its current level through the end of the year. The article joyfully announced that “it’s a 14 percent rate of return on the $165 billion invested in the biggest banks. Hundreds of smaller banks also received [TARP] money and have been paying the government a steady stream of dividends and interest.” Banking analyst Bert Ely said, “Overall, TARP may cost taxpayers money. But the banking part of it is going to be a moneymaker.”

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Toyota—The Jihad Continues

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Now that the Department of Transportation is opening a formal investigation into the 2009-2010 Toyota Corolla over possible steering problems while the government is continuing with hearings by the U.S. House Oversight and Government Reform Committee on February 24th, the House Energy and Commerce Committee on February 25th, and by the Senate Commerce, Science and Transportation Committee on March 2nd about Toyota’s “timely” response to braking and accelerator complaints, some are beginning to question “Why?”

More than that, the questions are “Why just Toyota?” and “Why now?”  Some are asking “Is there something else going on here?”

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