What's So Wrong with Obama Motors? [Mark Steyn]
Re my post below, a reader writes:
I accept the proposition that some car dealers are seeing their investments ruined, though I don’t know the details.Obama is the "villain" because he prevented the legal bankruptcy procedures in order to create (to the severe detriment of the company's bond and stock holders) two union/government-owned automakers.
But it’s entirely unclear to me how the Obama administration is doing wrong in this. These car companies are failing. Without government support, they will collapse...
With government support, some dealerships will survive. That’s the best anyone can hope for. And the fact that the government demands an ownership stake for its many billions of dollars in capital is – as best as I can tell – simple, straightforward economic fairness to the government and the taxpayers...
How again is Obama the villain in this piece – unless you insist that Obama magically transform the auto industry and save every job, every dealership, etc.?
Under traditional bankruptcy restructuring, the various GM/Chrysler brands — Chevy, Dodge, etc — would have wound up in the hands of new owners, domestic and foreign, willing to make a go of them.
Instead, Obama and his car czars have delivered these marques into the formal control of the unions (the ones who got the companies into this mess) and of the government — which cannot run a car company.
Why? Because it will make decisions for political rather than business reasons.
And unions will make decisions for the "workforce" rather than the market.
At the moment the GM/Chrysler unions cannot make a car at a price anyone is willing to pay for it. Why give them the companies?
Those of us who've lived with government car companies know how this story ends: see Iain Murray's column today — and, for a precis of life under a union/government alliance, ask Iain to explain the British expression "Beer and sandwiches at Number Ten."
I love American cars. I have a Chevy truck, Chevy SUV, the whole Steyn fleet. But I will never buy another Chevy until it is restored to private ownership. When GM sneezes, America catches a cold. When GM is put on government life-support, it's America — and the American idea — that's dying.
05/22 03:22 PM
You Can't Get out of Dodge, but Dodge Can Get out of You [Mark Steyn]
The great thing about the whole Obama hopeychangey vibe is that once again America is beloved around the planet. Well, unless you're a Canadian car dealer:
A car dealer in Outlook is wondering what to do after being told by General Motors they were terminating his franchise. GM is chopping 40 percent of its dealerships in Canada...Actually, 42 percent. But don't worry, Americans are getting a piece of the inaction, too:
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them...Get real, man. If you're a Yemeni jihadist whose lawyer is now Assistant Deputy Associate Deputy Assistant Attorney-General, you're entitled to the full protection of the U.S. Constitution. The rest of us have to take our chances. Be thankful your refurbished showroom isn't being confiscated to re-house Gitmo detainees*.
Our facility was recently totally renovated at Chrysler's insistence, incurring a multi-million dollar debt in the form of a mortgage at Sun Trust Bank.
HOW IN THE UNITED STATES OF AMERICA CAN THIS HAPPEN?
THIS IS A PRIVATE BUSINESS NOT A GOVERNMENT ENTITY...
The Dodge dealer may be a "private business" but Chrysler isn't.
Good luck pleading your case to an entity that's 55 percent union-owned, eight percent U.S.-government owned, two percent Canadian/Ontario-government owned, with a 20 percent stake held by an Italian manufacturer that brings no serious cash or knowhow to to the table but will supposedly rescue Chrysler by inflicting on the U.S. multiple small-car models that even non-Italian Europeans won't buy.
Meanwhile, the new GM is 89 percent government/union-owned.
Nothing good will come of either of these legally dubious enforced "restructurings."
In 15 years, if any of the once glorious marques survive, they won't be owned by these entities, or manufactured by them. My advice to the Dodge guy is to convert his showroom into an ACORN dealership.
(*Although, come to think of it, that makes as much sense as anything else.)
On Thursday, May 14, 2009 I was notified that my Dodge franchise, that we purchased, will be taken away from my family on June 9, 2009 without compensation and given to another dealer at no cost to them...I expect Kia to blossom in all this. If such a thing should happen, it will be of little benefit to America's economy. Koreans often bring in "their own" to work at their dealerships. Most of those blue-collar workers send most of their money back home.
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