chrysler

If Chrysler and GM had been permitted/forced to declare bankruptcy months ago then there would not have been massive amounts of government money owed by those two companies.  As it was the debt owed allows the government to claim a majority ownership of both companies.If the single entity owning a majority of GM and Chrysler were not the US government would they be subject to a anti trust ruling from the federal government?How much collusion will there be between Chrysler and GM in the future with a common majority shareholder?

In my previous post I commented on the ridiculous tactics being employed by the right to smear Sonia Satomayor. There is another ridiculous attack from the right on another topic:

Evidence appears to be mounting that the Obama administration has systematically targeted for closing Chrysler dealers who contributed to Repubicans. What started earlier this week as mainly a rumbling on the Right side of the Blogosphere has gathered some steam today with revelations that among the dealers being shut down are a GOP congressman and closing of competitors to a dealership chain partly owned by former Clinton White House chief of staff Mack McLarty.

The basic issue raised here is this: How do we account for the fact millions of dollars were contributed to GOP candidates by Chrysler who are being closed by the government, but only one has been found so far that is being closed that contributed to the Obama campaign in 2008?

It seems to me that if there were really politically motivated moves than we wouldn’t be seeing any dealers who contributed to Obama being closed. This basically fits into the conspiracy theory mode which many on the far right think in. They see the result but have failed to really look at the facts, and they think that because the propose one possible theory for the results there is reason to think it is true.

Megan McArdle points out that ” Democratic and Republican dealers are unlikely to be found in the same place, and the rural counties that tend to be red are probably less profitable.”

Nate Silver actually did the leg work to look at the dealerships which were not closed and found that they were overwhelmingly owned by Republicans. If most dealerships were owned by Republicans it only makes sense that most of those which were closed would be owned by Republicans. He also points out:

It shouldn’t be any surprise, by the way, that car dealers tend to vote — and donate — Republican. They are usually male, they are usually older (you don’t own an auto dealership in your 20s), and they have obvious reasons to be pro-business, pro-tax cut, anti-green energy and anti-labor. Car dealerships need quite a bit of space and will tend to be located in suburban or rural areas. I can’t think of too many other occupations that are more natural fits for the Republican Party.

The Auto Prophet reviewed the data and came to the same finding that there was no obvious political bias in the closings, finding “Chrysler dealers (and probably all auto dealers) who donated for the 2008 election cycle overwhelmingly supported the Republicans.”

This may just be a wild goose chase that could be explained by business owners typically donating to Republicans and Congressional districts that went against Obama are more sparsely populated so they aren't ideal locations for dealerships.

But in the meantime there are some very interesting findings from Doug Ross regarding the specific Chrysler dealers forced to close and their corresponding political donations.

Gateway Pundit also conjectures that specific counties and Congressional districts may have been targeted.

Reboot Congress is working on the list of closed dealers and their contributions.

This will definitely be something to check out over the next few days. It would be really interesting if there was a list of all Chrysler dealers and that list was sorted by 2008 net profit, political contributions, and whether or not they are being closed down. That could be eye-opening or it can squash any sort of conspiratorial thinking that something like this can foster.

Cross-posted at Truth v Machine.

Remember before Christmas when you were told what a piece of dreck the auto bailout was after Chris Dodd got his hands on it...

well, the results are starting to come home to roost

We are now the sole source of capital for Chrysler...who's business plan as blessed by political wheeler-dealer Steven Rattner is going to be as follows:

A struggling Italian automaker will run a company largely owned by the UAW to make new models of fuel efficient cars that will be better than Toyotas and Hondas. All this from the #5 or # 6 auto maker in US passenger car sales (hello, Dodge trucks and Jeeps are what they really have left)

Really, you think the point is not to shut the joint down before MI certifies its 2012 election results?  No matter how much taxpayer cash they burn through?

Or am I too cynical?

Too bad Bob Corker wasn;t calling these shots. But when it comes to Dodd, this is what we ought to expect

The hard reality is that the Big Three automakers could be facing bankruptcy if they don’t get a combined $14 billion in “loans” in order to stay in business and support their business model. However, the reality is that this is really a bailout of the United Autoworkers who need this bailout to keep their wages and benefits even as General Motors, Ford, and Chrysler go down the tubes.

Everyone has been talking about how we need manufacturing jobs and not bankruptcy of the Big Three. However, I will give you the reason why Ford, General Motors, and Chrysler need to pursue a Chapter 11 bankruptcy filing. I give you Delta Airlines.

As early as 2004 and in to 2005, Delta pursued cost-cutting measures that ended up cutting service, but did nothing for both executive pay and the pay received by union employees working for Delta. Everything came to a head with the company’s Chapter 11 filing on September 14, 2005 citing fuel prices and high labor costs.

While the company was in bankruptcy, unionized airline pilots took a cut in pay of 14 percent, executive officers took one of 15 percent, and CEO Gerald Grinstein took one of 25 percent. Also, the company laid off somewhere between 7,000 to 9,000 of the 52,000 employees.

On April 25, 2007, Delta had their bankruptcy strategy approved and emerged from bankruptcy five days later. This proves that a Chapter 11 filing will not kill a company, but restructure it so that it can function free of constraints from management and the unions and make a profit in order to stay viable.

According to the Heritage Foundation, GM, Ford, and Chrysler are paying $73.26, $70.51, and $75.86 in per-hour wages and benefits respectively. By comparison, the foreign carmakers like Toyota, BMW, Nissan, Honda, and Mercedes are profitable thanks to their locations in right-to-work states like Alabama, Georgia, Tennessee, and South Carolina at a fraction of what the Big Three pay in wages and benefits. This does not include the new Kia plant that will employ 2,500 new autoworkers in West Point, Georgia at just $17 per hour in wages. On a side note, the average American makes only $25.36 per hour in the same category.

Business executives and owners (past and present) are irritated by the difference in the earnings between the two biggest car-selling companies in the world, GM and Toyota. Last year, both companies sold 9.37 million cars each. The difference became the labor costs with GM posting a loss of $38.7 billion (a loss of $4,130.20 per car sold) versus Toyota making a profit of $17.7 billion ($1,889.01 in profit per car sold). The Big Three are fighting a losing battle thanks to the UAW who wins if the bailout passes.

What would be simple to avoid any bankruptcy would be for both sides to agree to necessary pay cuts. The UAW isn’t willing to do it because they will lose all leverage in negotiating. Where are the CEO’s telling these union thug bosses that they can either have their jobs at a lower wage or have no jobs at no wages?

All of this has led to Americans losing sympathy for the unions, who have been noticeably absent in the media’s coverage of the ongoing behind-the-scenes work on the bailout. As it would turn out, there are reasons why the American people no longer want to support the unions.

First, more Americans work in white-collar jobs that pay higher wages and provide more benefits because of the skill and education required to obtain and keep those times of jobs. When Americans were making more money during the 1980’s during the Reagan years and the new types of business leaders that were making changes for the better while maintaining and increasing profitability, the sympathy for unionization went out the window and down the drain.

Second, there are the list of high-profile unions that have gone on strike and why they did. Consider that in my lifetime, the biggest strikes were in Major League Baseball, the National Football League, the National Basketball Association, the National Hockey League, and the Screenwriters Guild. All of them wanted just one thing: more money.

When you have even the bluest of blue-collar workers being told to support millionaires on strike, even they begin starting to think the unions have outlived their usefulness. No longer are they fighting overbearing bosses, dangerous working conditions, or oppressive hours. The unions are fighting for the almighty dollar and for political influence and clout.

It’s time to tell the automakers to drop dead to force bankruptcy so that we can restructure the costs of the manufacturing sector so as to compete with the global economy. As long as we are bailing out failed companies in pro-union states thanks to the unions at the expense of taxpayers in successful right-to-work states, America will never be able to compete with the rest of the world.