Yes, General Motors. A great example of Obama’s efforts to revitalize our economy. He bravely handed a failing industry billions of dollars of other people’s money and then planted political friends in high positions while paying off the unions with shares of the company.
As recently as May of this year, people like Jen Psaki, White House Deputy Communications Director, and Vice President Joe Biden, can be found praising the auto bailouts as the crown jewel of this administrations efforts.
In fact, it’s becoming clearer and clearer that the Obama administration plans to use the auto bailouts as a way to win over voters in swing states. This is helped of course by how so many GM jobs keep ending up in swing states.
Unfortunately, the reality of our “investment” isn’t as pretty as they’d have people believe. Instead, it’s becoming clear that we will be lucky if we at least break even.
General Motors chief executive Dan Akerson, an Obama appointee who was handed the job around the same time the government handed GM billions of dollars, has steered the ship into an area that he himself warned we should watch for when he was first awarded the position of CEO.
The board told me they don’t want a transitional CEO. I know what I`m signing up for. As long as I make my numbers, I’ll probably keep the job. If I don’t, then I shouldn`t keep the job. That`s the way it works.
“As long as I make my numbers” is as vague as the stimulus claim of saving jobs, but I think it’s safe to assume that a 20% decline from their original IPO price was not what the company had in mind.
I’m sure things will work out great when the treasury finally sells the American tax payer’s holdings. After all, the stock market is just doing peachy these days. And as Akerson has been quick to point out, “We have about $35 billion to $40 billion of cash in our balance sheet. That’s a lot.” Yes Dan, that is a lot. Especially considering you still owe the American people about $20 billion by your own admission.
Currently, GM owes about $26.4 billion to the taxpayers. Their stock would need be trading at $53 per share just for the American people to break even (the stock closed a little below $24 today). If they were sold today, we would lose $10 billion dollars.
So the government appointed CEO has taken the company’s stock to historic lows; pushed out money losing, government subsidized cars that the American people don’t want, all at the behest of his bosses in Washington; and is sitting on enough cash to pay back the loan but is instead choosing to wait for the treasury to lose money when it sells our shares. So what’re they doing with all that money?
Well, they’re handing out bonuses that will be over $400 million and could exceed 50% of workers salaries. In fact, nearly all 28,000 engineers and managers will get 4-16 percent of their base pay.
They’re paying homage to the green gods by investing in solar panels and wind farms. Not exactly sure how that contributes to making cars, but what do I know? In fact they’re spending just under $1 million for weatherization projects in Maine which they claim will be the first of similar investments in all 50 states.
GM is investing over $40 million dollars to “offest its carbon footprint,” and invested enough money into the World Golf Championship in Doral, Fl to get them to add the word “Cadillac” to it.
The average cost of a superbowl ad is $3 million for 30 seconds. GM aired 5 of them.
They’re working on getting the green light for a reality tv show about their Chevy Volt. I’m guessing it’ll include a cast of 20 people that will coincidentally be the only people in America that actually own one.
In fact, they are spending on entertainment at a faster rate than any other category.
And I know what you’re thinking, “Hey, companies have to advertise man! It’s getting them name recognition!” To that I would ask you if you really believe that GM’s name is so unknown that they need to spend a minimum $15 million worth of advertising during one game, or if, perhaps, they might be well known enough to advertise somewhere other than the most expensive commercial spot on planet Earth.
Yes, I know companies have to spend money to make money. But I’ll tell you what I see. I see a company that is trying to keep their Washington masters happy by supplying jobs in key spots for Democrats, a stock that is being driven into the ground, a higher and higher likelihood that we won’t be getting our money back, and a reality TV show starring the Volt.
As an unwilling shareholder of the company, I think I’d feel a lot better if someone other than an Obama lackey was in the top spot. How about you?