From listening to the Democrats crow at their National Convention, one would answer that question as a resounding yes. Billions of dollars in US Taxpayer money saved General Motors.
General Motors Is Headed For Bankruptcy – Again
Forbes: President Obama is proud of his bailout of General Motors. That’s good, because, if he wins a second term, he is probably going to have to bail GM out again. The company is once again losing market share, and it seems unable to develop products that are truly competitive in the U.S. market.
Right now, the federal government owns 500,000,000 shares of GM, or about 26% of the company. It would need to get about $53.00/share for these to break even on the bailout, but the stock closed at only $20.21/share on Tuesday. This left the government holding $10.1 billion worth of stock, and sitting on an unrealized loss of $16.4 billion.
Right now, the government’s GM stock is worth about 39% less than it was on November 17, 2010, when the company went public at $33.00/share. However, during the intervening time, the Dow Jones Industrial Average has risen by almost 20%, so GM shares have lost 49% of their value relative to the Dow.
While The New York Daily News reports that General Motors’ sales are up 16 percent from this time last year, the National Legal and Policy Center pointed out that government purchases of GM automobiles rose 79 percent in June. The Detroit Free Press reports that retail sales of GM vehicles rose less than eight percent.
To continue with the Forbes Article: “It’s doubtful that the Obama administration would attempt to sell off the government’s massive position in GM while the stock price is falling. It would be too embarrassing politically. Accordingly, if GM shares continue to decline, it is likely that Obama would ride the stock down to zero.”
Will GM profitability decrease? Forbes indicates that the trend is likely because they’re moving metal right now with big incentives and a dismal future (5 years out in the case of the Malibu) will force that trend to continue:
Chevrolet is not a premium brand, like Mercedes or BMW. Since the 1920s, Chevy’s essential market positioning has been “more car for your money”. Unfortunately, the 2012 Volkswagen Passat is more car for the money than is the 2013 Malibu. There will not be anything that GM will be able to do about this for the next five years other than to reduce the price of the Malibu by offering “incentives”. This will eat into the company’s profitability, which is already weak. (Forbes)
What is the chance that GM will (against all logic) recover?
One way to answer that question is to compare the 2013 Chevy Malibu against the 2012 Volkswagen Passat, as Car and Driver did. Results: VW, first out of six; GM, dead last. (Forbes)
Obama DID NOT save the auto industry. He saved union jobs. Had he not bailed out the failing auto industries, they would have declared bankruptcy and been allowed to reorganize. Ford, which didn’t take a bailout, is doing better than the other companies.
Newt was right, its simple. Its not high-finance, its not difficult economic theory, it doesn't take an expert. Obama is treating it as a win, the media thinks that is not debatable (like Global Warming), and Mitt needs to take it to Him…
Without unions, the American worker would be in big trouble.
With unions, the American worked is in big trouble.
And to put a still finer point on it, the DNC and the Mainstream Media have painted absolutely everything that Obama did as a big win for 'them'. Maybe it was. It was clearly not a win for We the People.
I'm not anti-union.
But neither should the tail wag the dog.
Concur, he wasn't saving GM, he was 'buying' votes…
Repeat after me, "Buying Votes!" Obama gives money to the unions (Via GM Bailout), and the unions donate to his campaign. It's a marriage made in Chicago.
The votes were 'free' to Obama. He paid for them with YOUR money.
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