The Headline Read...
What The Hell Is Going On Here?
GM bails out French automaker?
You bet your bippy that headline caught my attention in light of the fact the Government Motors (GM) still owes the US tax payer $25 billion that they have failed to pay back when we they were bailed out compliments of our incompetent lawmakers, Obama being the leader of that band. So off I went thinking to myself, "Self! This couldn't possibly be true!" It appears that it is though.
I have already sworn off ever again buying a GM product after the federal government intervened and basically ended up giving the company away to the United Auto Workers (UAW) who had such a significant hand in running the US auto industry into the ground in the first place. Now with this, Obama could give me a free Chevy Volt with the packets of free contraceptives they want to give away and I'd turn that down flat too. So now for the rest of the story.
GM has decided that it wants to mimic the bad investment decisions made by the Obama administration, You know - like Solyndra and all those other belly up alternative energy companies with junk bond ratings. So they plunk down $400 million of what could be, no probably is, our tax dollars that they still haven't paid back to obtain a 7% stake in French auto maker Peugeot. Peugoet makes the Citroen. The auto making branch of Peugoet lost $123 million last year. Connecting the dots here yet?
Ever hear of Moody's? Most people have after the recent down grading of the US government's credit rating. The story got worse as I read along and did more research. It turns out that on March 1st Moody's downgraded Peugoet's credit rating to junk bond status and slapped a "negative outlook" on it to boot. Moody's did that one day after GM divvied up the $400 million to bail it out. So continuing on with the connecting the dots we go.
The US tax payer owns about one quarter of GM to this day because of their failure to repay the $25 billion they still owe us. So instead of at least forking over the $400 million to help repay the debt in question, they decide to invest our hard earned dollars in a company with "junk bond" status? So now "we" own more junk bonds. Doesn't that just make you want to jump for joy? Top off what is going on with the fact that Government Motors is sitting on $34 billion in cash and we have yet to be repaid. I don't usually write too much about the auto industry but recently I also wrote this about GM. Lots of information, facts and figures available here too.
More Wise Waste Of Our Tax Dollars
- The Chevy Volt - A Bust
The Chevy Volt is a bust and the jolt in the wallet is again at the tax payer's expense. Fuzzy math seems to swirl around the Obama administration and all this alternative energy nonsense.
The thinking behind GM's decision, if there was much thought involved, doesn't appear too rational to me. They surmised that this move would give them access to Peugeot’s “expertise in small car and hybrid vehicle technology” and will allow both GM and Peugeot to “save money by pooling their resources." That comes out of the report of ABC News written by Jonathan Karl. Correct attribution is important here on the Hub. What the hell are they thinking? If Peugeot has such "expertise" in the technology, then why did they end up on the losing end of the stick last year at a loss of $123 million? I reckon all those belly up alternative energy companies Obama threw our money at had that same kind of expertise.
Completing the circle of dots goes like this. GM was able to free itself from some rather shoddy production costs and deal with its labor rates more effectively by giving the UAW ownership of the company and stiffing the investors who had a stake in the company in the first place by putting their paw out and having the federal government (read: US tax payer) bail them out of their incompetence which allowed them to take cash they still owe on the initial bail out and bail out a foreign automaker with a junk bond status. Throw in the "negative outlook" attached to the company and what have you got?
All I can say is that if there is any more bailout talk by our federal government there needs to be one of the largest marches on Washington DC this nation has ever witnessed. This latest episode is right out the "blind leading the blind" chapter of how not to conduct business. The market place needs to pick the winners and losers and not our federal money munching monster or the likes of Government Motors which has already proven itself to be run by incompetents.
The Frog Prince