Tuesday, July 07, 2009

GM & Chrysler Sales Drops: Conservatively Political Car Buying?

"Government Motors" is driving Americans away...There is a groundswell of disdain for the federal bailouts of General Motors and Chrysler, even as polls show that a growing "Buy American" sentiment is boosting sales for the only Detroit automaker that avoided bankruptcy and federal rescue – Ford...Conservatives thunder that the country has taken a socialist route with President Obama at the wheel..."I won't buy a socialist car," columnist and radio talk-show host Hugh Hewitt thundered last month..."Over the years, we have mostly been a General Motors family. Since GM has become Government Motors, we will never again buy a GM product," said William Crowley of Spicewood, Texas....GM, Chrysler Sales Suffer after Bailout, William Ehart, Washington Times, 7/6/2009

There are other political reasons to be wary of GM and Chrysler. Both management and the UAW know that at these two automakers, politics means more than quality. The bailouts, which illegally trashed first tier creditors in favor of the UAW, were unabashed political payoffs. It's basic math. The UAW contributed many millions to the Democrats, perhaps as much as $40 million, during the 2008 Presidential and Congressional campaigns. They get a huge part of the ownership of two car companies in return. The all-Democrat government has “invested” a hundred billion dollars in these two losers. Who knows if best what the government will do if things don't work out? What if it takes another hundred billion? Two hundred?

If you buy a GM or Chrysler car, in other words, you'll pay for it twice: purchase; and taxes for the bailouts. Even those who buy Fords are helping to pay for Chevies and Dodges. Socialism and its grim sister, crony capitalism, always costs more than they generate. Fred Barnes at Weekly Standard agrees.

Delphi, the auto parts manufacturer once owned by GM and still its biggest supplier, has been in bankruptcy for four years. To acquire its assets and run the company, Delphi and Obama's Auto Task Force picked an affiliate of the private equity firm Platinum Equity. There was no auction or competitive bidding...Why Platinum? The UAW favored it, sources said...There's a name for all this: crony capitalism...usually identified with Third World despots, like Hugo Chávez, who reward their friends and allies in the business and financial communities...the chief characteristic of crony capitalism is favoritism for some companies or organizations (unions, for example)--in loans, grants, giveaways, and specific policies...Obama isn't merely rewarding a few cronies, he's seeking more and more favored groups to reward...through his energy, health care, and other policies, which would boost certain companies and industries over others. Another way is by providing cheap capital, which gives firms an advantage over competitors who must acquire capital at higher interest rates in private markets...The effect of Obama's approach to business has been enormous. In less than six months, he's changed the relationship between the private sector and Washington. Companies increasingly "compete for government favoritism, not for consumer choice or preferences," says Republican representative Paul Ryan of Wisconsin...The Triumph of Crony Capitalism, Fred Barnes, Weekly Standard, July 6, 2009

With the UAW is doing it for the President, not for the consumer, the least likely car this writer would buy would come from Chrysler or General Motors.


No comments: