FRONT PAGE CONTRIBUTOR
Attacking Attack Watch’s Attack on my Attack on the Auto Bailouts
Most of you are well aware of the glorious goon squad known as Attack Watch. Primarily from the fantastic video highlighting all of their features, but mostly because we’ve all come to the mutual agreement that they are a gigantic joke.
Yet, I feel compelled to acknowledge that I was fortunate enough to be attacked by these modern day propaganda ministers for an article that I wrote a few months ago about our favorite government funded car company, GM.
Here’s the evidence:
In an attempt to undermine the success of President Obama’s auto rescue, opponents claimed the program was a waste of money and a handout to unions. For example:
- Conservative news blog Redstate.com said President Obama handed the auto industry “billions of dollars of other people’s money” while “paying off the unions with shares of the company.”
In response they gave a few pieces of “evidence” that I’m a liar and Obama saved the auto industry or something:
President Obama took decisive steps to prevent the collapse of the American auto industry by requiring that General Motors and Chrysler take action to cut labor costs, create fuel-efficient fleets, and overhaul their business models in exchange for government assistance. The President’s actions helped to save more than 1.4 million jobs and prevented personal income losses of nearly $97 billion over two years—and as of June 2011, the auto industry has added 113,000 jobs while GM and Chrysler have become profitable once again.
- Read the Wall Street Journal article on the jobs saved by the auto industry rescue
Advisor to the Secretary of the US Treasury Ronald Bloom said bankruptcy judges found the auto rescue plans to be reasonable and in accordance with bankruptcy law.
- Read Ronald Bloom’s congressional testimony
The President’s auto rescue required shared sacrifice from management and labor unions. According to the Chicago Tribune, “the Obama task force has been able to wring extraordinary concessions from GM management, the United Auto Workers union and a large group of creditors to eliminate many of the costs that made it vulnerable to foreign competition.” These concessions include changes in the United Auto Workers healthcare plan and a pledge from the union not to strike.
The information they chose to provide to contrast the quote they pulled from post is telling. Notice there’s not word one about my claim that it was, a) Other people’s money and, b) involved a huge union payoff.
Luckily, I’m here to watch attack watch.
The quote that they’ve identified as “misinformation” basically has two parts which I’ll dissect below.
Paying Off the Unions with Shares of the Company
When the time came for Super Obama to swoop in and rescue the auto industry from its over-pensioned insolvency, the UAW was more than happy to hold the door open for him, and for good reason.
General Motors Corp. plans to give the United Auto Workers union 17.5 percent of its common stock, $6.5 billion of preferred shares and a $2.5 billion note to fund a trust that will take over retiree health care costs starting next year.
GM got off easy though. UAW positively gutted Chrysler:
The United Auto Workers union would eventually own 55% of the stock in a restructured Chrysler LLC under the deal reached by the union and the auto maker, according to a summary of the agreement that was reviewed by the Wall Street Journal.
Recent GM/UAW negotiations reveal that members will receive signing bonuses as large as $5,000 each. This new model has been heralded by the UAW as the guiding framework for its ongoing negotiations with other auto manufacturers. Sounds like all the unsustainable benefit programs that bankrupted the industry the first time are making their way back.
And remember this quote from above that Attack Watch used?
…the Obama task force has been able to wring extraordinary concessions from GM management [and] the United Auto Workers union…
Turns out there was a very good reason that they made these so-called “concessions.”
Did the United Auto Workers know when they negotiated concessions on their VEBA in exchange for ownership in General Motors and Chrysler that the their friends in Congress and the Obama Administration would make it up to them with the health care bill?
Bloomberg has uncovered a portion of the health care bill that is trulya sweetheart deal for the unions and provides an even bigger bailout to the United Auto workers. And, in so doing, may have uncovered one of the greatest swindles of all time in the making about to be committed by a government on its people.
Legislation overhauling U.S. health care includes $10 billion to pay some of the most expensive medical costs for millions of autoworkers, steelworkers, schoolteachers and other early retirees with coverage.
The provision, embedded in legislation passed in July by House and Senate committees, may help offset health-care concessions made earlier this year by the United Auto Workers as part of a government rescue of General Motors Co. and Chrysler Group LLC and related cost-cutting at Ford Motor Co.
The UAW cited the provision in an e-mail this week urging its members to support a health-care overhaul, President Barack Obama’s top domestic priority.
Call me crazy, but when you have a CEO that was literally appointed to the board by the Obama administration at the helm of a company that was bailed out with taxpayer funds which then funneled that money to special interest unions that historically vote for candidates like Barack Obama, it sounds like a payoff to me. I think the evidence is on my side.
Billions of Dollars of Other People’s Money
When the GM inevitably collapsed under its unsustainable pension program, the U.S. government under President Bush and then President Obama, decided to help. This is where the “other people’s money” comes into play.
The article that Attack Watch links to is a WSJ article which cites a May 2009 Center for Automotive Research Group (CAR Group) study as evidence that the bailouts were a total success.
Yes, in order to prove that the bailouts were totally awesome, Obama has to go back more than 2 years to mere months from the payouts in order to make its case. GM didn’t even file for bankruptcy until July that same year, and when it did, it received another $30.1 billion in subsidies (60% of the total $50 billion commitment).
I would assume that this study wasn’t capable of knowing how swimmingly things would go over the next few years as GM moved money from one pocket to the other to create the illusion of making good on its debts.
But the core issue here is, whose $50 billion was that? Was it other people’s money or not?
A report by the president’s National Economic Council noted that as Detroit automakers rebound, the taxpayers’ loss from the bailout will be about $14 billion, or less than 20 percent of the $80 billion that the Bush and Obama administration used to prop up the companies in 2008. The Treasury Department had expected losses closer to 60 percent.
Not so much.