Freedom of BLEEP

The Obama Power Grab, Part IV

The Associated Press reports that “General Motors Chairman and CEO Rick Wagoner will step down immediately at the request of the White House.”

Perhaps Wagoner should have stepped down long ago. But the problem is that this sets a terrible precedent. Since when does the President have such authority over a publicly traded company? Why don’t the other creditors and shareholders have a say?

While the executives at GM have consistently underperformed, it’s the labor union that really drove this company into the ground. Obama even cited the lack of union concessions as a primary fault with GM’s restructuring plan. It’s the union leaders that control this! Yet the CEO was made his scapegoat, and this is only one facet of Obama’s anti-business repertoire.

Just last week, Obama and other democrats were calling for executive salary capping - of all publicly traded companies. Do they not understand the implications of this policy? The best executives will leave the US for higher paying jobs, thus strengthening foreign companies. We’ll be stuck with mediocre leftovers. Read any book on corporate philosophy and it will tell you the same thing: a great company has a great CEO behind it.

This week Barney Frank is proposing government control over all employee salaries, not just top executives. It looks like the government may soon determine our wages.

Obama’s power grab doesn’t stop there. He also wants the government to be able to seize any financial institution. This isn’t limited to banks. This isn’t limited to institutions that have received government bailout money. Any financial institution will be subject to seizure, basically at the whim of Washington officials. This could represent the largest permanent expansion of government regulatory power in the history of the US.

Every day Obama becomes less like FDR and more like Hugo Chavez.

Instead of developing a plan to save their company, the brainiacs at GM spent their last resources on a huge ad campaign to increase support for their initial bailout. And they are already asking for more money!

If you checked your Gmail or AOL account prior to the first bailout, you might have see ads that looks like this:

In the end, their efforts only served as another reminder that this company is a sinking ship, and the first 17 billion they received only delayed the inevitable. Now they want a second bailout for twice that amount - another $39 billion!

How is GM losing so much money? Well for one thing, their workers currently make about 44 percent more than Toyota workers in the United States. The average worker wages at GM amount to $69 per hour, while American-based Toyota facilities average only $48 per hour. Toyota doesn’t allow unionized labor.

While bailout bargaining, the United Auto Workers have repeatedly said they would be willing to renegotiate their current contracts. But truth be told, all concessions the unions have made are trivial. They’ve only agreed to reduce medical benefits for retired workers by less than 10 percent, and temporarily suspend pay to laid off workers (who previously got 95% of their pay indefinitely). This policy was muscled in by the union and basically made it impossible for GM to cut their payroll. Now the company finally won’t have to pay for workers that aren’t working… Yeah, those union leaders are really bending over backwards.

Fearing that they will lose their power, the unions have also propagated a myth that filing for bankruptcy won’t help GM. In reality, chapter 11 allows companies to restructure their contracts and internal organization. GM would no longer be obligated to provide extravagant benefits to their overpaid employees, and they would not have to fulfill supplier contracts they can’t afford to meet. Just look at United Airlines - they emerged to be an even stronger company after filing for bankruptcy.

Bankruptcy would probably help GM even more than the measly $17 billion band-aid, especially since they lost $39 billion in a single quarter last year.

Still, many are worried about what could happen if GM goes completely out of business. People seem to love bad news, and so the media has been reporting that a total of 2.5 million jobs will be lost if GM disappears. These projections are greatly exaggerated, however. First of all, the derivations assume that all of The Big Three go out of business (not just GM), which is unlikely since Ford has enough cash to last a year and a half.

Additionally, several innovative American car companies have been able to rise in the wake of The Big Three Failures. Carbon Motors, for instance, will have their E7 on production lines this year. This vehicle is essentially a ready-made police car that’s loaded with features and offered at a price that beats the competition. For years, state governments have been purchasing Big Three models only to transform them into police cars and emergency vehicles. So why didn’t GM, Ford, or Chrysler come up with this idea?

In her conquest to nationalize every corporation in America, Nazi Pelosi is now pushing a massive bailout for General Motors.

Here’s a news flash: GM stock has been dropping for more than 10 years!

This company is not a victim of an economic crisis; GM is a failing enterprise that has proven it can’t compete with the market. Okay, so they had a huge loss this quarter. It’s not the first time. What about the $21 billion loss in first quarter 1992? What about the $10 billion loss in 2005? What about the $4.8 billion loss in forth quarter 2006? What about the $39 billion loss in the third quarter last year? Did the government consider buying them out then?

Let’s consider why GM consistently performs poorly in the market. A huge contributing factor is the outrageous healthcare and benefits package they offer to employees, which hikes up the price of their vehicles. GM is a company that spends more than $17 million on erectile-dysfunction drugs such as Viagra and Cialis every year. This is just a small part of their $5.8 billion dollar a year luxury healthcare plan. There are plenty of other reasons why GM is nose diving, but I’ll let you look into that on your own. This company doesn’t need a bailout… They need to get their act together!

But why is the government even considering this bailout when labor unions contracts have not been revised? There is no reason that American tax dollars should pay for Viagra. It’s pretty obvious that the union organizers just want to screw us.

“GM has many hard workers.”