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The UAW, both foreign and domestic

Bob King, President of the United Auto Workers, has announced a new strategy to increase members. On the “foreign” side he has decided that it is neigh onto time that Americans in this country making Nissans, or Hondas or Mercedes join the union.  Never mind that all attempts to unionize these workers in the past have failed (mostly because pay at these plants is on par with those of unionized plants), to Mr. King it will now be full steam ahead.

Early this year he sent a set of “rules” to each foreign manufacturer, and, if the company didn’t agree,

[t]he UAW, he said, would hold demonstrations at the corporate headquarters of these companies outside the U.S. as well as at their U.S. plants. In addition, it would picket their dealerships in the U.S. and abroad, and sports events globally that are sponsored by the car companies.

When that demand basically fell on deaf ears, Mr. King is now huddling with the UAW leadership to decide which foreign manufacturer should be the  “target” of his protests.  And, yes, it’s ok for the UAW to use that word because, well, they are a union.

So, it matters not to Mr. King that your spouse (who wouldn’t be unionized in any event), but happens to sell cars, for example, at your local Honda dealership will lose much needed income during these protests. It’s all about the union.

UAW President Bob King said he thought a target would have already emerged by now… 

We’ll keep you posted on that emerging target.

Moving on to the domestic front, it seems that US auto manufacturers have actually turned a profit this past fiscal year.  And, the big three’s union contracts expire this year. To that, Mr King says,

Where we’ve given concessions, we’re going to try to get as many of those back as we possibly can.
Would those be the same concessions that kept Ford afloat, made it somewhat easier for the American public to swallow the GM/Chrysler government bailouts, and, enabled those companies to actually turn a profit?

Here’s an idea, Mr. King…any profits made by GM and Chrysler must first be used to pay back the American taxpayer in full.  Then you can claw back whatever concessions you want.

Will the government treat Toyota different than … let’s say Chrysler?

It’s a fair question to ask, especially since Americans now have billions and billions of dollars invested in GM and Chrysler. The feds becoming a player in an otherwise private industry – while writing the rules – probably should be a concern.

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Ford sales up 33% – GM and Chrysler not so much

Take this for what it is worth. Ford sales were up 33 percent in Dec. 2009 as compared to Dec. 2008. Toyota and Subaru’s sales also increased by a third, and Honda and Nissan sales were up 24 percent and 18 percent respectively. GM and Chrysler sales below the fold, but how is the Ford quality for you buyers out there?

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Pay Czar to GM … Pay cut – Video

I really don’t like this guy. I didn’t like him when he was appointed and I like him less now. But … GM and Chrysler begged for the money, they got it, and now … well …

The Obama administration will soon order the nation’s biggest bailed-out companies to drastically cut pay packages for their top executives, according to several reports published Wednesday.

Kenneth Feinberg, who was named the White House’s so-called “pay czar” in June, is expected to demand that the seven largest bailout recipients lower the total compensation for their top 25 highest paid employees by 50%, on average, according to reports in both the New York Times and Wall Street Journal.

For the past two months, Feinberg has been reviewing pay plans at Citigroup (CFortune 500), AIG (AIGFortune 500), Bank of America (BACFortune 500), General Motors, Chrysler, GMAC and Chrysler Financial in an effort to put these firms in a position to pay back bailout money as soon as possible.

It’s not new.We knew it was coming, and this pay czar is not going away anytime soon.

Interestingly enough, Senator Alexander chimed in on this on Cavuto, reminding people we wouldn’t be debating this if the Democrats had not shot down his idea when the bailout was first proposed.

Eleventh hour stay of execution

Monday the Supreme Court granted a stay of the Chrysler bankruptcy court’s order approving the “sale” of Chrysler to Fiat.  In layman’s terms, that means no “sale” will occur until the Supreme Court says so.

The case arrived at the Supreme Court because the Attorney General of Indiana filed an appeal on behalf of three  Indiana pension funds who will lose $6 million if the “sale” is approved.  Each of these funds lent money to Chrysler, and, in return for their loan, they received a secured lien on the assets of Chrysler.  In case of bankruptcy, a secured lien means that the secured creditor, i.e., the Indiana pension funds, would be the first to be paid.  The government’s plan in the Chrysler bankruptcy, however, put the the secured creditors last.

As a matter of law, that is wrong.

I have no idea whether the Supreme Court will hear this case.  The stay is only in place temporarily.  If the Supreme Court decides not to hear the appeal, the stay will be lifted, meaning the “sale” will go through, and, the three Indiana pension funds will have to look elsewhere to make up this $6 million loss.

But, here is what disturbed me most.  The Solicitor General, the chief attorney for the government in Supreme Court cases, filed a brief opposing the stay.  The Solicitor General argued that,

the losses to the Indiana funds “cannot outweigh” the potential broader problems a collapse of Chrysler would present.

Accepting that argument is the judicial equivalent of  embracing Marxism.  And, according to that argument, the law matters not if it gets in the way of the “greater good”.

So, what laws can we be assured of, and for how long?

According to the Solicitor General, apparently not many, particularly if they get in the way of the “greater good”.

 I saw this in today’s USA Today, and just had to add it to my post.

Rep. Joe Donnelly, D-Ind., said he remains “very hopeful” the sale will be approved. Chrysler has three plants employing about 5,000 workers in his district. “There’s been no indication that the pension funds have suffered any damage,” he said.

Huh?  Perhaps Mr. Donnelly should speak with the Attorney General of his own state.

Dealergate (Cont): 28 days to sell everything

This is just the latest in a series of posts on the autocrats taking over and sinking auto dealerships across the country. But this comes with a twist guaranteed to make your blood pressure rise. Read more

Dealergate – alternate media diggs through Chrysler franchise mess

I’m not one for conspiracy theories when it comes to the list of Chrysler dealers who lost their franchise last week, but you’ve got to admit when one of the top 2 percent of dealers in the country is shut-out, questions need to be asked.

The alternate media seems to be on top of this, but remember that all blogs are part opinion, part fact and definitely biased. We’re not impartial journalists, but then again if the major media outlets ignore the story, are they impartial journalists? Probably not…

On May 27, Jim posted about the story and was skeptical, but it won’t go away as more data and facts are providing more questions and fewer answers.

Do consider that small and medium business owners – including car dealerships – are more likely to be registered Republicans in the first place, plus the “donation” totals provided reflect cash from individuals who work for the dealerships – not exclusively from owners.

Also consider that the dealers who must close shop need to ditch their entire inventory and sell to other dealers. This includes all of the parts on hand which they must sell below cost to get rid of it.

Will their be any transparency concerning how dealerships were targeted?

Here are a few links to other sites that have information including Google Maps mash-ups of the data in some cases. Take the information for what it’s worth, but what it comes down to for me is the car guys at Chrysler seem to be completely shut out of the decision making, and politicians or political appointees are making the decisions. Not a good idea.

Jim Hoft (a.k.a. the Gateway Pundit) has quite a bit on the subject, as do others including Malkin and  Doug Ross.

Update: AJStrata at The Strata-Sphere blog also has a good round up posted this morning.

Did Obama shut down Chrysler dealerships based on politics UPDATE: Not so fast

Update: As I caution below … while this is a post worthy story to be sure, be careful with this one. It’s way too early to be drawing conclusions … and Michelle Malkin not only makes the same point but cites some interesting evidence of Republicans who were shut down who might have deserved to be shut down.

Florida GOP Rep. Vern Buchanan is on the list. What no one has mentioned, though, is that he has a record of financial shadiness and his dealerships have been embroiled in fraud lawsuits.

Then there’s Illinois/Missouri car dealer James Auffenberg, Jr., who was recently acquitted by a Virgin Islands jury in a massive tax and wire fraud case — but stillmay face civil action to collect millions in alleged unpaid taxes.

Of course this alone doesn’t mean there isn’t a correlation … but read with an open mind.

A number of bloggers have been doing some digging into the criterion for shutting down various Chrysler dealerships. The reason is pretty easy to understand. The closings seem arbitrary, rather than economics and is bolstered by this Neil Cavuto interview from last week … courtesy of Gateway.

The evidence that politics might be at the heart of which dealerships lived and which ones died is beginning to pile up and the results, while preliminary, are scary, and the kind of stuff I might expect from old style Chicago politics but not today. I hope I am wrong.

Doug Ross has a round up of the research being done on line right now and links to the folks doing the leg work. Again it’s preliminary, and all bloggers are cautioning … wait until all of the research is out … BUT … they are looking for help with this.

To quickly review the situation, I took all dealer owners whose names appeared more than once in the list. And, of those who contributed to political campaigns, every single one had donated almost exclusively to GOP candidates. While this isn’t an exhaustive review, it does have some ominous implications if it can be verified.

However, I also found additional research online at Scribd (author unknown), which also appears to point to a highly partisan decision-making process.

Consider the partial list of Chrysler dealership owners, listed below. You’ll notice that all were opponents of Barack Obama, most through sponsorship of GOP candidates and organizations, but a handful through Barack’s Democrat rivals (Hillary Clinton and John Edwards in 2008, for example).

For a partial list go to Doug Ross’ site.

Meanwhile “RedState“takes it a bit farther:

The list is heavy with influential Republicans and libertarians. Another name on the list is Ray Huffines, who owns a large dealerhsip in the Metro-Dallas/Ft. Worth area. The Huffines family have been major contributors to Rep. Ron Paul (R-TX) over the years.

Chrysler maintains that “sales volume, customer service scores, local market share and average household income in the immediate area” were among the factors the company considered to determine which dealerships should be closed. However:

“In fact, there may have been other criteria involved: politics may have played a part. If this data can be validated, it would appear to be further proof that the Obama administration is willing to step over any line to advance its agenda.”

Another notable link: chrysler dealership shutdown.

Let me just caution … that this is still a partial list … but it don’t look good for free marketers.

Once again, to be repetitive, thanks to Instapundit foir the tip, who by the way has links to some other government motors shenanigans.

Car Dealers on Obama’s Chopping Block

Wednesday, John, one of the regulars in the chat room, said that he heard Chrysler was about to cut 700 dealers.  He wanted to know if anyone in the room had heard the same.  As no one had, I decided to do a bit of digging.  Well, John, if you are reading this you are not going to like the answer.

Chrysler has about 3,200 dealers and Obama’s car czar is “leaning” on Chrysler to trim those numbers rapidly.  Approximately 50% of those 3,200 dealers account for 90% of all Chrysler sales.  So, I suppose it safe to say that 1,600 dealerships will remain in business.  And, it is anyone’s guess what will happen to the other 1,600.  But, I wouldn’t want to be one of them right now, nor would I want to be employed by one of them right now.

The same article also spoke about the fate of GM’s dealers.  GM’s plan, announced in February, was to cut 1600 of its 6200 dealers at the rate of 400 per year through 2012.  The administration wasn’t happy with that either.  So it now insists that GM cut 2,600 of its dealers within 18 months.  According to the National Automobile Dealers Association,

Speeding up that process will only dump 180,000 more workers onto unemployment rolls in a recession…

The strange part is that the dealers cost the manufacturers nothing.  They are, for the most part, small businessmen who simply sell Chrysler’s and GM’s cars and send Chrysler and GM money for every sale.  So, why Obama wants to shut their doors, driving many dealers into bankruptcy, and more workers onto the unemployment rolls, will, no doubt, forever remain a mystery.

I suppose, an even deeper question is how can the government, who is merely an unsecured creditor of Chrysler and GM, dictate things such as this?  Perhaps the book Obama received from Cesar Chavez was titled “Government By Intimidation”.  If so, Obama has learned well.

Chrysler’s Creditors Cave

Last Friday, the small group of Chrysler’s secured creditors, who had thus far refused to buckle under to the pressure, decided to throw in the towel and withdraw their legal protest to the Obama administration’s plan to resuscitate the failed auto company.  In a move more symbolic than meaningful, the group has decided that although it will not support the President’s plan, it won’t raise any further legal objections.

Thomas Luria, lead counsel for the “dissident” creditors, put it this way:

Being such a small group trying to fight the force of the government made [the funds] very uncomfortable.  In the end, they just concluded that the political cost to their institutions was too high to bear.

The group became “small” months ago, and, it should come as no surprise why it did.

The White House’s success at dividing and conquering the creditors began even before the April 30 bankruptcy filing, when it persuaded four large banks acting as Chrysler’s top lenders to accept the deal. The White House used as a cudgel the more than $100 billion in bailout funding given to the banks since last fall, including JP Morgan, Citigroup, Goldman Sachs and Morgan Stanley.

So, in the end, Chicago style political muscle trumps both fairness and the law.

Going forward then, Chrysler will be sold to Fiat, although, given the circumstances, “sold” is a term only this administration could use with a straight face.  In reality, Fiat will be given up to a 35% interest in Chrysler in exchange for Fiat’s “automotive expertise”.  (That, too, is hard to say with a straight face.)  And, the UAW will own 55% of the new company.  The problem, of course, is when this new Chrysler emerges from bankruptcy it will find the same world as existed before bankruptcy.  Labor contracts will still make Chrysler vehicles uncompetitive with foreign manufacturers, folks that didn’t like Chrysler products before still won’t like them, and the plan to build “little green” cars will still be met with the same public disdain as it always has.

So, as taxpayers, brace yourself for a very long “ride” of government subsidy after government subsidy until the majority of some future Congress puts a stop to the madness.