AutoExtremist is Wrong. Again. Still. 61% Oppose Motown Bailout
Ken Elias just emailed me, asking why I’d neglected to blog Peter DeLorenzo’s Wednesday rant. Ken was irked by Sweet Pete’s claim that a 20 percent decline in car-related California sales tax proves that America ought to bail out his pals in Detroit. DeLorenzo writes: “‘This is very bad for states,’ Donald Boyd, senior fellow at the Nelson A. Rockefeller Institute of Government told the Times, who went on to point out that sales taxes are the first or second most-important revenue source in almost every state. And to think there are people still out there who suggest that the collapse of the domestic automobile business somehow ‘won’t affect them.'” I also thought that passage was a pan-Pacific-sized stretch. But its was the self-styled Autoextremist’s “the fat lady done sung” triumphalism that caught my attention. “In just this past week, the true value of the domestic automobile industry is coming to the fore, and people all across this country are starting to take notice.” You bet they are—but not in the way that Pete fervently desires and hysterically promotes. A new CNNMoney poll suggests that 61 percent of Americans are opposed to a federal bailout for the AutoExtremist’s hometown heroes. And that’s not all . . .
“A full 70% of respondents indicated that a bailout is unfair to taxpayers. In addition to being unfair, the poll showed that a majority of those surveyed think a bailout would not help the economy.”
Common sense? Bailout fatigue? Blind, pig-ignorant Detroit hatred? Whatever the reason for those numbers (and you can guess which one Mr. D would choose), that’s a $40 billion bucket of not good for the D2.8’s call on the public purse. Politicians are politicians; there are only so many times their going to vote against an opinion held by 70 percent of the electorate. Especially if they think this thing is going to blow up good. Which it will.
Ken reckons we’re looking at “a [bankruptcy] with an expedited reorganization with a Government trustee to speed things up given that the money is coming from the Feds.” Hell Congress might even tell Chrysler and their private owners to go fuck themselves (although Ken would NEVER let those words escape his lips). Bottom line: this is going to be one Hell of a show. And no matter what happens, someone’s gonna get hurt. And everyone knows it.
Pch101 on Dec 04, 2008Automotive News data shows CHEVROLET ALONE outsells Toyota, 1.92 million units to 1.81 million units so far this year. Your numbers don't match the figures reported by the manufacturers themselves. GM reports Chevrolet sales of 1,663,440; Toyota reports 1,729,209, excluding Scion and Lexus. But in any case, even that isn't relevant when GM can only hit those numbers by losing money. They have to give the cars away in order to make those numbers. That "market share" (if we can call it that) is a curse, not a blessing, because it isn't a profitable piece of the market. GM was losing money when the economy was booming, and it is losing money now that it isn't. A good economy provides no assurances that GM can become profitable. Obviously, the loss of market share shows that they can't keep their customers. They might benefit from figuring out why they have such problems doing that.
Yankinwaoz on Dec 05, 2008
Derm81.... Do you really think that these loans have a snowball's chance in hell of being paid back? I think it is just money being poured down the toilet that we will never see again. If you loan someone money knowing that you have almost zero chance of seeing it repaid, then it is a grant. The fact that no commercial entity will loan them money should convince you that this is not a loan. There are plenty of funds and people looking for investments now... a place to stick money that has a safe chance to grow. Loaning it to GM is not a risk even they are willing to take.
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