When the Obama Administration took over General Motors, we were all assured that this was a “good thing.”
“American taxpayers are now positioned to recover more than my administration invested in GM, and that’s a good thing,” Obama said, speaking of the government’s $50 billion taxpayer-backed rescue of the venerable automaker.
Several years later, we have to ask ourselves: was this really a good thing?
The taxpayers now own 26.5% of the company.
GM can’t seem to get its shit straight, and once again has to turn to the government for help – this time to the DoD, which will purchase 1,500 pathetic Chevy volts at the bargain price of $40K each to make the military just a bit more “green” – something ordinary citizens obviously don’t see as a value.
GM loses up to $49,000 on every Volt it builds; it has sold only 13,500 Volts this year, 33.75% of its 40,000 goal; and the assembly plant that makes Volts will be closed for four weeks beginning September 17 due to low sales.
GM’s initial investment in the Volt was over $1 billion, and since its release, the company has spent even more trying to re-engineer the vehicle for a flaw which has led to it catching fire when charging overnight.
(As an aside, we apparently don’t have the resources to properly fund veterans’ health care, but it’s OK to purchase an expensive, possibly dangerous hunk of junk that might catch on fire, to prop up GM?)
The government has imposed pay restrictions on the company, limiting its ability to pay top dollar for top talent.
GM wants to buy back 200 million of the roughly 500 million shares that the government holds and ask Treasury to resell the remaining shares through a public stock offering, but at roughly $24 per share, the taxpayers stand to lose a lot of money. Hell, I wouldn’t want to purchase shares in a company that is known as “Government Motors” either.
So how was this a good thing, again?