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Today's Nuze

"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."

Ayn Rand

Nobody's listening.

YA DON'T SAY ...

By
Neal Boortz
@ April 3, 2009 8:53 AM
Permalink | Comments (12) | TrackBacks (0)

You are going to love this. We've known for a while now that Barack Obama has had a vision for the auto companies long before he'd be able to use this economic crisis as an excuse to execute his plan. And that vision is to require the auto industry to build cars that would please the environmentalists, if not the consumers.

The White House has released a report of General Motors that says the company's restructuring plan will not lead to a stronger company. And why is this? Because GM's proposal relies heavily on advanced, fuel-efficient cars, which are not commercially viable. Cars like the Chevy Volt, which is too expensive to be commercially successful.

So Obama's Auto Task Force comes out and says that GM's restructuring plan isn't viable because they are doing what President Obama wants them to do: build a "green" auto industry. According to this task force, the plan is based on economic assumptions are leave little room for error.

And even if GM succeeds in making and selling "green" cars ... the task force says that "it will not lead to a viable company because it will not be able to make enough money to weather future economic slowdowns ... Even if the projected plan is achieved, the cash flow forecast is quite modest, leaving the company little margin for error in what will be a very difficult turnaround."

Suspiciously missing from the task force's report is the crushing costs of GM's labor force. Keep in mind that GM was required, under the original terms of the bailout, to modify labor contracts. And the task force acknowledges that GM has failed to successfully renegotiate these contracts, but does not cite it as a reason as to why GM's plan is not viable.

Either way, there is one simple way to renegotiate these union contracts. Bankruptcy. Obama is using the term "structured bankruptcy." What would you like to wager that any Obama-approved "structured bankruptcy" contains some pretty strong protections for the unions. Democrats aren't quite ready to eat their own.



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What others are saying

  • Wait what
    I can't help but wonder what people mean when they say that advanced, fuel efficient cars won't sell or are not commercially viable. Are you seriously saying people don't want to buy fuel efficient cars?
  • People's Car
    Ya, und ve have ze 'People's Car' it runs on garbage und everybody vill haf one! That Obama fella, he just goes and goes and goes! Chief Business analyst Obama was conferring with automotive design engineer Obama before meeting with economic wiz Obama and then on to Washington to discuss strategy with foreign affairs specialist Obama. Later, the Pentagon will be the scene of a summit involving Military analyst Obama and all the other Obamas as they work 'round the clock to solve the latest crises...If anybody in the Administration had the gonads and common sense( at the same time, on the same day...)they'd have told the man to allow bankruptcy and reorganization instead of wasting time and more of our grandchildren's tax dollars only to declare that the CEO had to leave GM and a 'new plan' must be implemented. Thanks, America...you got your freakin' 'Change' allright!
  • I will not buy anything from a company
    that has received bailout money! This is how the market is supposed to work if you suck at business then you go bankrupt! I will buy Ford or Toyota etc...
  • GM's real problem
    It doesn't take a rocket scientist to figure out what GM's real problem is. All one has to do it go to edmunds.com and do a comparison between what Toyota offers in pickups and what Chevy offers in pickups.

    What you'll find is that there are a fewer models and fewer options with Toyota than Chevy. Does that mean the Toyota doesn't have nice options or isn't well-appointed? No. What it means is that there's less number of possible combinations of options/models and for us manufacturing engineering types that translates into less manufacturing costs due to less complexity.

    And then there's the actual price of a Chevy. The wife & I looked at a 2009 Tahoe with a fair number of options but certainly not a top 'o the line model. The MSRP was $46K and with additional dealer add-ons (that a good way to get a customer - NOT!) the price was close to $49K. From what I can see, the invoice is probably around $43K. Now....I'm not gonna swear to this, but I'm willing to bet that GM has probably $18K in material & labor invested in that Tahoe. So where is the additional cost coming from? My guess is it's all the overhead costs of pensions and liability insurance and other such things.

    What's sad is that GM does build some nice products. Not all of their stuff is junk, just some. But GM, as a whole, will never survive as long as they build the same 3 or 4 products but badge them with different names and then offer a thousand different ways they can be configured.
  • G.M.
    So we can officially call G.M. Government Motors from now on.
  • Suspiciously Missing...
    Also suspiciously missing is any mention of this report in the MSM.
  • Beater cars
    Okay, so we'll soon be a nation of "Tribant" drivers..Little go carts with a roof, the car used in East Germany and similar cars used in the Soviet Block like the "Yugo"... No more worries about speed limits, cars will have trouble staying at 45 mph... Thanks to Obama for the change we can believe in.
  • eating your own
    No, the democrats aren't ready to eat their own! And neither are the repubs yet, and the Ted Stevens story in your reading assignment section is evidence of that. He's a crooked, overspending hog-trougher, but he's OUR crooked, overspending hog-trougher!
  • Cars
    All we have to do is begin offering the 1955 Ford and Chevrolet.
    Problem solved.
  • chevy volt=the future of GM
    The new chevy volt displayed at car shows is the future of G.M.? G.M.s asking about $40000 for this marvel in technology that can travel 40 miles on a charge(whoopie) When G.M. reps. were asked questions about how often the battery need to be replaced GM didn't know but a two year life expectancy was estimated(HUH!!)and battery replacement cost were also estimated at about $10000!!!So lemme get this straight...$40000 for a car that goes 40 miles and and will cost me $10000 every two years for batterys along with whatever other cost
    GM "hasn't "reasearched" out yet.Yeah.... I'll be first in line to plunk down my 40G's for this P.O.S.
    It looks like GM's only future is as a government owned company. Maybe it could change its name to the old AMERICAN MOTORS name and bring back the Rambler,Pacer,Gremlin,Javelin car names at least those might sell just on nostolgia value like chryslers challenger and pt cruiser.
  • China is on the move
    "Cars like the Chevy Volt, which is too expensive to be commercially successful." Go figure the Chinese battery company BYD has developed a plug in electric hybrid for considerably less the price. Are they unionized? You betcha! It’s called the communist party. By the way, China is now the largest car market in the world.
  • Same old song and dance
    I remember the 70's where Carter and CO. Forced the auto makers to build the likes of the Chrysler [k car] and heavily emissioned junk motors of that era. Different style same theme.
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