Malo periculosam, libertatem quam quietam servitutem.
Wednesday
March 2011
COMMENTS
Written by Brian Garst, Posted in Labor Unions
The United Auto Workers, which benefited tremendously from the government takeover of GM despite being the principal cause of its insolvency, are rattling the sabers and demanding the return of all their lavish benefits in the next collective bargaining deal.
UAW Local 900 Plant Chairman, Bill Johnson, states, “If they don’t restore everything (union workers) gave up, the membership is going to knock it down. The bonuses that were just announced are just ridiculous.” While Johnson’s comments may be aimed at Ford, the UAW is signaling it will take a hard line stance in negotiations at GM as well. Union leaders are meeting this week to prepare for this summer’s negotiations on contracts that expire Sept. 14th.
It is debatable that the UAW sacrificed so much in the GM bankruptcy proceeding, particularly compared to GM bondholders who unwillingly subordinated their legal standing as creditors to the UAW, courtesy of the Obama Administration. One of the perceived sacrifices for the UAW was that laid off workers would not be paid while not working. That would seem reasonable to most, but recently laid off workers in Buffalo, NY are still receiving 75% of their pay. Also, GM continues to contribute billions of dollars to the UAW benefits fund. And while Johnson may believe that a $4,500 bonus for each GM factory worker is ridiculously low, many taxpayers feel that it is ridiculous that bailed out GM is giving bonuses out at all!
What’s a government run enterprise to do? Pissing off the UAW, which owns the Democratic Party, will bring down the wrath of Super-CEO Barack Obama, but caving to their demands will mean a quick circling of the drain. Oh, if only we had some sort of economic system that didn’t involve government in every aspect of business decisions. What a crazy dream that would be…
Tuesday
April 2010
COMMENTS
Written by Brian Garst, Posted in Government Meddling
Heritage explains a GAO report indicating that GM and Chrylser are not done feeding at the public trough:
A recent GAO report warns that GM and Chrysler may need even more taxpayer money. This comes after GM and Chrysler received the overwhelming bulk of an $81 billion auto bailout under TARP.
The report finds GM and Chrysler may have unfunded liabilities for their pension programs. These obligations could have been terminated if these companies had filed for a typical bankruptcy. They were maintained, however, after the government assumed sponsorship during the most recent crisis. Should these companies be unprofitable, these unfunded liabilities will be unmet by GM and Chrysler as soon as 2013.
We’ve already made one bad decision in not forcing them to go through the proper bankruptcy process the first time. There’s a fallacious psychological temptation to think that a prior bad investment means that one is committed to keep making more bad investments, but it’s not so.
In poker there’s a common phrase that goes, “don’t throw good money after bad.” One wrong decision doesn’t force us to make yet more. It’s not too late to cut them off and start saving the public money.
Thursday
July 2009
COMMENTS
Written by Brian Garst, Posted in Free Markets, Government Meddling
When foolishly given the task of running a business, Congress critters can be counted on to place political interests ahead of business interests.
By a unanimous vote, a U.S. House committee has approved a measure that would restore 2,100 dealers either cut or scheduled to be closed by General Motors Corp. and Chrysler Group LLC.
The vote comes amid growing support in the House for the proposal, with more than 200 cosponsors signed on to a similar bill. Dealers will hold a lobbying event next Tuesday to press for the plan in the House and Senate.
The bill would turn back the clock to before the companies filed for bankruptcy, restoring the 789 dealers cut by Chrysler and 1,300 dealers GM chose to wind down.
…“This legislation, if passed, would put our long-term viability at risk,” said GM spokesman Greg Martin.
Daniel Ikenson at Cato@Liberty calls for a boycott:
What makes these actions evil, and not just stupid, is that Congress really does not care about whether GM is profitable or not. The Henry Waxmans of the Hill only care that GM produces green vehicles, regardless of their exorbitant costs of production and scant consumer demand. And the John Dingells (among whom are included the 200 sponsors of the bill to restore the dealerships) only want GM to provide jobs, regardless of the fact that GM needs to scale back its labor force substantially to even approach the realm of commercial viability. In other words, Congress demands that Americans subsidize GM because GM’s short-term viability is good for their political fortunes.
Enough. Show Congress that you won’t comply and that you won’t be pawns. Boycott GM. Boycott GM until the government relinquishes its grip on the company’s decision making process.
I gave my own reasons for boycotting GM last month.
Tuesday
June 2009
COMMENTS
Written by Brian Garst, Posted in Free Markets
Chris Moody discusses a GM boycott:
Limbaugh called for it recently, and only 42 percent of Americans who own an automobile made by General Motors say they are going to buy one again. All of this, of course, makes the left so gosh darn mad.
As an urbanite, I own a Chinese-made scooter and a bus pass. But if I were to buy a car, GM would be the last place I look, on principle. For anyone who is not keeping score at home, that includes Chevy, Buick, Cadillac, Daewoo, Holden, Saab, Pontiac and Saturn.
Before we know it, we will hear calls that it is our patriotic duty to buy GM cars, just as it’s “patriotic” to pay taxes. Baloney. It’s my “duty” to find the best product at the best price, and reward the company who makes that product with my patronage. That is how I’ve always done it, and that is how I will continue, whether I’m buying a car or a box of tissues to wipe away my non-existent tears for General Motors.
Buying GM at this point is an implicit endorsement of government intervention. I am not boycotting for political gain or to spite Obama, but to show that I do not accept dangerous interventions into the economy and the destruction of private contracts and the rule of law.
I will never in my life purchase a GM product, regardless of quality. It’s not whether or not their product is right for me anymore; it’s about the means taken to produce it. They are not acceptable in a free society.
Thursday
June 2009
COMMENTS
Monday
June 2009
COMMENTS
Tuesday
May 2009
COMMENTS
Monday
May 2009
COMMENTS
Written by Brian Garst, Posted in Economics & the Economy
Despite large infusions of taxpayer dollars, General Government Motors is expected by industry experts to file for bankruptcy.
For General Motors Corp., the task at hand is so difficult that experts say a Chapter 11 bankruptcy filing is all but inevitable.
To remake itself outside of court, GM must persuade bondholders to swap $27 billion in debt for 10 percent of its risky stock. On top of that, the automaker must work out deals with its union, announce factory closures, cut or sell brands and force hundreds of dealers out of business — all in three weeks.
“I just don’t see how it’s possible, given all of the pieces,” said Stephen J. Lubben, a professor at Seton Hall University School of Law who specializes in bankruptcy.
GM, which is living on $15.4 billion in federal aid, faces a June 1 government deadline to complete its restructuring plan. If it can’t finish in time, the company will follow Detroit competitor Chrysler LLC into bankruptcy protection.
Think back to the beginning of the U.S. government’s incursion into the automotive sector. We were told bankruptcy would be the end of the world. The entire U.S. auto industry – nay, all of manufacturing – was going to collapse and never return. The govenrment, however, was uniquely positioned to save GM and Chrysler from bankruptcy.
Both of these claims was blatant hogwash. The government never could stop the slide into bankruptcy, nor, as we will soon learn, would that inevitable outcome result in the death of U.S. automakers for all time.
The government lied, automakers died. When will this administration admit that is is caught in a quagmire? Bring our tax dollars home!
Friday
April 2009
COMMENTS
Tuesday
April 2009
COMMENTS
Written by Brian Garst, Posted in Government Meddling
Having trouble getting from your anti-globalization protest to your PETA meeting without using a CO2 producing gas guzzler? Well, fear not! Government Motors has teamed up with the makers of that over-hyped flop – the Segway – to give you the next revolutionary vehicle:
Your tax dollars hard at work.
I serve as Vice President of the Center for Freedom and Prosperity, a non-profit think tank dedicated to preserving tax competition and free markets. This site features my personal views, which are not reflective of CF&P.