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Showing posts with label auto bailout. Show all posts
Showing posts with label auto bailout. Show all posts

Thursday, August 2, 2012

"General Motors' profits fell 41% in the second quarter..."

That's the news today. Was your first thought what this means for Obama? If so, isn't that crazy?

Here was Mickey Kaus, yesterday:
I don’t quite understand why President Obama has to claim that General Motors is a great success story (“back on top … [b]ecause America always wins when the playing field is level …” etc.). Why couldn’t he say: “We gave GM and its employees another chance, at a time when our economy was fragile and couldn’t absorb a massive shutdown. Now it’s up to them. They have the tools they need. They may make it–I hope they do. They may not. We aren’t going to bail them out again.”

Friday, July 31, 2009

The Clunker Clunker.

"Cash for Clunkers" got a lot of folks jazzed up, but it flamed out in 1 week.

Is this just some oddball quirk of a program, or should we see it as a sign that all those other programs loaded with money and big ideas are fatally ill-designed?

AND: Ha ha. Instapundit drives a clunker.

AND: "House seeks $2B more in cash-for-clunker aid." Rule of thumb: After a program goes into operation, the estimate of its cost will increase by >200%. Not fair? Why? Because it's too high or because it's too low?

Tuesday, June 9, 2009

The Supreme Court won't hear the Chrysler case.

Carry on.

"Lawyers for the Obama administration warned the court Monday against standing in the way. They said Chrysler was losing $100 million a day."

Okay. But, now, wait. $100 million. I forget. That's a lot of money, right? We're supposed to think that when we're supposed to think that. But at other times, $100 billion is hardly worth noticing.
Those holding 92 percent of the $6.9 billion in secured debt already approved a deal that would give bondholders $2 billion. Together, Indiana pension funds said they had $42 million invested in Chrysler, less than 1 percent of its secured debt. They paid about 43 cents on the dollar to acquire their share and, under Chrysler's plan, would get back 29 cents on the dollar.

The bankruptcy judge said, in effect, that these small players should not stand in the way of a deal that could save Chrysler and keep the company in business making cars and trucks.
So $42 million is chump change. And the rule of law? No time for that! It's an eeeemmmmerrrrrgenceeeeee.

Friday, December 19, 2008

We just brushed the snow off the top of the car....

DSC_0001

... and backed out.

***

That reminds me: Bush bails out the auto industry.

IN THE COMMENTS: Ron says:
Ah, snowy, silver Silvio...how we've missed thee!

No new wheels for you, Althouse? Not even a new TT? (I know you didn't like last year's!)

Maybe for Christmas...

The car is too perfect for me: beautiful, fun to drive, great in the snow and ice. I just can't think what could replace it. See what a 2009 Audi TT looks like. Men must have their mean car face, so Audi lost a customer. I'll be doing my best to preserve my 2005 car -- which has less than 40,000 miles on it and only one very tiny dent.

Thursday, December 11, 2008

"Auto bailout dead."

"Negotiations ended, no deal.... Until next year. Corker tried to make a deal with Dems, UAW wouldn't make concessions, so it will die on cloture vote with GOP opposing. Vitter held the line too, objecting to quick vote, forcing more debate. He was strong."

ADDED: "'We're not going to get to the finish line. That's just the way it is. There too much difference between the two sides,' Senate Majority Leader Harry M. Reid (D-Nev.) announced after 10 p.m., concluding a marathon negotiating session that ended in gridlock. Reid warned that markets could plummet when trading begins this morning. 'I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight,' he said."

So Reid deliberately sets off a panic. Thanks a whole hell of a lot.

"How is the government going to 'get its money back' if the [auto bailout] money has been spent and the firms are bankrupt?"

Mickey Kaus asks.
1) How is the government going to "get its money back" if the money has been spent and the firms are bankrupt? Only by liquidation, it would seem. So does the bailout deal eliminate the option of restructuring (as an ongoing enterprise) under the aegis of the bankruptcy court? Either the firms are saved under the "czar," or they are liquidated, apparently. 2) The big "stick" is to kill the firms, then. Isn't that too big a stick? Like a nuclear weapon is too big a stick? Come April 29th, if the choice is to approve a half-assed "restructuring" plan that has maybe a 35% chance of succeeding, or to kill General Motors, there's going to be an awful lot of pressure not to kill General Motors, no? The threat is so big it pressures the auto czar, not the executives, investors and union members. What's needed is an intermediate threat that's more credible. How about empowering the auto czar to declare the companies' labor contracts null and void? And to indefinitely delay payment of all executive salaries and bonuses? That would get the "stakeholders" attention, maybe. 3) Shouldn't there be a different "czar" for each firm? Having a single czar for the whole industry muffles what might be salutary competitive pressures. Maybe Chrysler's workers are so desperate they'll give up more in terms of pay and work rules than Ford's workers. Shouldn't that sort of choice be encouraged? Dueling "czars" would encourage this viability-enhancing reverse solidarity. ...
Good questions! As to #3, can someone explain why 3 car companies with 1 head isn't an antitrust problem?

Also, Mickey, don't say "auto czar." It's either car czar or auto autocrat. Poetry's important when everything is going to hell.

IN THE COMMENTS: AJ Lynch offers: Motor City Mogul. Campy says: Detroit Despot.

Sunday, December 7, 2008

Obama on "Meet the Press."

I'll link to the transcript when it becomes available. And here are a few idle observations:

1. He keeps talking about changing light bulbs! This reminds me of the old tire-gauge solution to high gas prices. What will he do about the economy? First, replace a lot of government light bulbs.

2. His biggest rhetorical tic: breaking up answers into "the short term" and "the long term." Anything he wants to do now is "the short term," and it doesn't much need to make economic sense other than to "jump start" the economy. To the extent that there are other things that we should be doing, he puts them in the "long term" category. Having the 2 headings helps make disparate things look coherent.

3. Obama's idea of the auto bailout is a little opaque, but it's clear that he wants to get the companies to make small cars. But how will he do that? How can they become economically viable on small cars, especially with the low gas prices of today? Brokaw suggests imposing a tax on gas to make the price $4 again. Obama won't go there, of course, but I don't understand where he will go.

AND: One more thing about the light bulbs. (First, watch the movie clip in the next post.) In yesterday's address -- the weekly radio address of the President elect -- he said:
Today, I am announcing a few key parts of my plan. First, we will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won't just save you, the American taxpayer, billions of dollars each year. It will put people back to work.
See? Light bulbs first. They're supremely important! They will save us all! Light bulbs!

MORE: Here's the transcript. Striking my ear the wrong way:
You know, tomorrow, you had mentioned earlier, is when we commemorate Pearl Harbor, and so I'm going to be making announcement tomorrow about the head of our Veterans Administration, General Eric Shinseki, who was a commander and has fought in Vietnam, Bosnia, is, is somebody who has achieved the highest level of military service.
Tomorrow? That sent me checking the calendar. (Brokaw, earlier, had said "today.") [CLARIFICATION: At the beginning of the transcript -- watching live, I'd missed the first few minutes -- Brokaw said the interview was recorded "yesterday." Later, he said: "Sixty-seven years ago this day, one of your predecessors, Franklin Roosevelt, faced Pearl Harbor." I guess he meant that 67 years ago to the day, FDR "faced" the events that would occur the following day.]

Also, this bugged me:
MR. BROKAW: ... Let me ask you as we conclude this program this morning about whether you and Michelle have had any discussions about the impact that you're going to have on this country in other ways besides international and domestic policies. You're going to have a huge impact, culturally, in terms of the tone of the country.

PRES.-ELECT OBAMA: Right.

MR. BROKAW: Who are the kinds of artists that you would like to bring to the White House?

PRES.-ELECT OBAMA: Oh, well, you know, we have thought about this because part of what we want to do is to open up the White House and, and remind people this is, this is the people's house. There is an incredible bully pulpit to be used when it comes to, for example, education. Yes, we're going to have an education policy. Yes, we're going to be putting more money into school construction. But, ultimately, we want to talk about parents reading to their kids. We want to invite kids from local schools into the White House. When it comes to science, elevating science once again, and having lectures in the White House where people are talking about traveling to the stars or breaking down atoms, inspiring our youth to get a sense of what discovery is all about.
The question was arts.

Finally, he gets to the arts, which by now, I'm convinced he cares little about:
Thinking about the diversity of our culture and, and inviting jazz musicians and classical musicians and poetry readings in the White House so that, once again, we appreciate this incredible tapestry that's America.
So that, once again, we appreciate this incredible tapestry that's America? Once again? Is there any reason to think that the arts events in that George Bush had at the White House were lacking in cultural or ethnic diversity? And Obama doesn't name even one artist, perhaps for fear of leaving someone out. Speaking of diversity: he merely ticks off the high-class categories: jazz, classical, poetry. Some incredible tapestry! Then he comes out with this:
I--you know, that, I think, is, is going to be incredibly important, particularly because we're going through hard times. And, historically, what has always brought us through hard times is that national character, that sense of optimism, that willingness to look forward, that, that sense that better days are ahead. I think that our art and our culture, our science, you know, that's the essence of what makes America special, and, and we want to project that as much as possible in the White House.
Nothing like specificity.

Wednesday, November 19, 2008

Mitt Romney: "Let Detroit Go Bankrupt."

A NYT op-ed:
Without that bailout, Detroit will need to drastically restructure itself. With it, the automakers will stay the course — the suicidal course of declining market shares, insurmountable labor and retiree burdens, technology atrophy, product inferiority and never-ending job losses.

Thursday, November 13, 2008

"The financial straits that the Big Three find themselves in is not the product of our current economic downturn..."

"... but instead is the legacy of the uncompetitive structure of its manufacturing and labor force. The financial situation facing the Big Three is not a national problem but their problem."

Harsh words from Senator Richard C. Shelby of Alabama
, "the senior Republican on the banking committee, [who] said he would not support legislation to aid the auto companies and seemed prepared to let one or all of them collapse."
Representative Jeb Hensarling of Texas, chairman of the conservative Republican Study Committee [said]... “They are producing high-cost products that consumers don’t want to buy. And so now we have Washington on the verge of giving them a bailout simply because we have all heard of them and they have high-priced lobbyists."
Fortunately, it looks as though there will be no auto company bailout. At least not until Obama and the new Congress take over.

Tuesday, November 11, 2008

"Too many jobs rely on the auto industry, and the psychological impact of losing one of the Big Three to bankruptcy..."

"... would have a real effect on economic confidence. But that doesn’t mean we should just peel off a chunk of the bailout to cover them," writes TNR's Clay Risen.
The $700 billion was intended for the financial sector; expanding beyond that risks a public backlash at a time when Washington needs broad support for more spending. And what’s to stop other industries from begging for a piece of the bailout? Moreover, any auto-industry bailout needs to be tailored as a reconstruction of the industry: Detroit has too much capacity, it has huge labor legacy costs, and it is still too oriented toward producing gas-guzzling super-cars. There is an opportunity here for the U.S. auto industry to refashion itself as a producer of highly fuel-efficient cars and trucks, but to do so while struggling with its enormous financial onus requires government assistance.

Obama should call for a separate bailout package for the auto industry. If the case is so strong, then it should be able to stand up to Congressional scrutiny. Fortunately, in this instance “deliberate” and “haste” are not equal imperatives: Unlike the banks circa late September, Detroit won’t implode tomorrow. We now have the time to slow down and have a debate--not just about keeping Detroit afloat, but making sure it doesn’t need another bailout down the road.
Yes, can we get some sober deliberation out of Congress for once?