Today’s White House blog post documents the revival and resurgence of the American auto industry that was once believed to be on the verge of extinction. The whole story is explained in the following three simple gifs.
Image courtesy: Whitehouse.gov
Image Courtesy: Whitehouse.gov
Image Courtesy: Whitehouse.gov
(Source: Detroit Free Press)
Mike Thompson of Detroit Free Press (Freep.com) has nicely captured the sentiments of the American public (at least, the sensible ones) about Chrysler repaying the $5.9 billion bailout money. God knows how much bickering will happen when the political leadership decides to spend it on other programs.
Image courtesy: Free.com - Mike Thompson: Taxpayers get their money back from Chrysler
Note: For what it is worth, I’d also add this: It is nice to see the taxpayer $$ safely return to the government’s coffers, unlike what happened with some of the Wall Street beneficiaries. This timely intervention from the U.S. Government not only prevented an American icon from vanishing without a trace, but it also saved thousands of jobs in a city that is already reeling from some really bad economic decisions.
(Sources: White House.gov & Freep.com)
Watching GM turn the corner from a disastrous dud and morph into a Detroit’s Stud and a Wall Street darling, no could’ve been happier than President Obama and his team of economic advisors at the White House, who advised him on the bailout that rescued thousands of jobs and the iconic brand from a collapse. The stunning turnaround culminated with a successful IPO debuting in the marketplace today. General Motors stock closed at $34.19 today, just above the $33 price of the initial public offering.
An elated President Obama convened a press conference this afternoon and shared his sentiment and belief in GM’s recovery strategy.
Today, one of the toughest tales of the recession took another big step towards becoming a success story.
General Motors relaunched itself as a public company, cutting the government’s stake in the company by nearly half. What’s more, American taxpayers are now positioned to recover more than my administration invested in GM.
And that’s a very good thing. Last year, we told GM’s management and workers that if they made the tough decisions necessary to make themselves more competitive in the 21st century — decisions requiring real leadership, fresh thinking and also some shared sacrifice –- then we would stand by them. And because they did, the American auto industry -– an industry that’s been the proud symbol of America’s manufacturing might for a century; an industry that helped to build our middle class -– is once again on the rise.
Our automakers are in the midst of their strongest period of job growth in more than a decade. Since GM and Chrysler emerged from bankruptcy, the industry has created more than 75,000 new jobs. For the first time in six years, Ford, GM and Chrysler are all operating at a profit. In fact, last week, GM announced its best quarter in over 11 years. And most importantly, American workers are back at the assembly line manufacturing the high-quality, fuel-efficient, American-made cars of tomorrow, capable of going toe to toe with any other manufacturer in the world. Click here to read the president’s entire speech.
Freep’s awesome cartoonist Mike Thompson charts this wonderful recovery from a dud to a darling with a series of cartoons on his blog. He also adds the following to go with his nice drawings:
As if this weren’t bad enough for auto bailout critics, the Ann Arbor-based Center for Automotive Research has released a report that validates the logic behind the bailout. As Free Press business writer Greg Gardner reported, “The CAR study says the federal government would have spent $28.6 billion more than it did on unemployment benefits, Medicare, Social Security and other programs had the automakers liquidated. So the entire rescue will pay for itself if the government can generate $38 billion from selling its shares.” But perhaps the most chilling details in the story were the report’s conclusions that liquidation of the two auto companies would have meant the loss of 1.4 million jobs and $121 billion in personal income.
Whew! This above facts-full paragraph must be making many of the naysayers, like the conservative columnist Mr. George Will feel like throwing up. A couple of days ago, he wrote an op-ed titled , Toxic Volt, on Washington Post saying a whole lot of negative things about the President’s Bailout for GM. The President and Steven Rattner, the brains behind the execution of the bailout plan, should be chuckling over the phone talking about how bad they feel for George Will. Sadly enough, the doubters still continue to find a way to question the legitimacy of success. Fox Business News in an article on its website says massive dilution from existing shares, warrants and grants, as well as unfunded pension costs. And GM’s cash flow is still heavily reliant on tens of billions of dollars in tax breaks and taxpayer-backed loans from the Dept. of Energy.
Image Courtesy: Freep.com
If this is not victory enough for the President, today GM notched another impressive feat, which is more like a beautiful foil to the wonderful present inside – the IPO. The Detroit Free Press reports that the Chevrolet Volt extended-range electric vehicle has won Green Car of the Year, beating out the pure-electric Nissan Leaf, hours after General Motors returned to the stock market. The award, decided by judges that include environmental enthusiasts and Green Car Journal editors, comes the same week as the Volt won MotorTrend Car of the Year and Automobile Magazine’s Automobile of the Year. How awesome could that for a man who was chided constantly by his opponents for the decisions he made to save the brand and the thousands of jobs associated with the existence of the brand.
I bet tonight the President of the United States will have a drink to celebrate one of his biggest victories since assuming office. He will probably sleep a little better tonight with one less thing to worry about.
Business Week’s David Welch throws a lot of interesting arguments about the Government’s decision when things looked ominous for the auto industry a year ago.
President Obama served up red meat for his hard-core supporters in Detroit yesterday, proclaiming that the government’s bailout of General Motors and Chrysler to be a success. Had he not intervened and invested in the two companies, Obama said, they would have fallen into liquidation and 1.1 million jobs would have evaporated. In the past year, the auto industry has regained 55,000 of the 334,000 jobs lost, he went on. “The fact that we’re standing in this magnificent factory today is a testament to the decisions we made,” Obama said while visiting Chrysler’s Jeep Grand Cherokee plant in Detroit. His comments were aimed clearly at the critics on the other side of the political aisle who opposed the bailout 18 months ago and who still criticize government ownership of GM and Chrysler to this day.
So far, it is tough to argue that the bailout hasn’t worked. GM is in the black, having reported an $865 million profit in the first quarter with black ink looking likely for the rest of the year. GM’s results are strong enough that the company is preparing for an initial public offering that should start selling stock in November. Chrysler is at least making an operating profit, which puts the company in much better shape than most analysts thought it would be a year ago. With much lower costs, both companies should be able to make money going forward. Let’s not forget that GM, Chrysler and cross-town rival Ford cut out 2.9 million cars worth of production capacity during the crisis, according to the Center for Automotive Research. That was a quarter of capacity in the U.S., Canada, and Mexico. Cutting out the fat has allowed them to post profits even though sales are slow.
(Source: CNNMoney.com Video: MSNBC via YouTube)
White House and GM sources had told CNN Sunday that Wagoner would resign as part of the federal government’s bailout strategy for the troubled automaker.
“On Friday I was in Washington for a meeting with Administration officials. In the course of that meeting, they requested that I ‘step aside’ as CEO of GM, and so I have,” Wagoner said in a statement posted to the GM Web site.
He is being replaced by GM’s president and chief operating officer, Fritz Henderson. Kent Kresa will serve as interim chairman.
“Having worked closely with Fritz for many years, I know that he is the ideal person to lead the company through the completion of our restructuring efforts. His knowledge of the global industry and the company are exceptional, and he has the intellect, energy, and support among GM’ers worldwide to succeed,” Wagoner said.
Click here to read the entire article.
(Source: Baltimore Sun/Investigative Voice via Jalopnik)
First Daughter and current South Baltimore teacher Jenna Bush‘s Secret Service detail vehicle was towed away this week because of unpaid parking tickets… and karma.
According to Investigative Voice, the Baltimore Parking Authority towed one of the vehicles in Jenna Bush‘s Secret Service detail because of several unpaid parking tickets. Click here to read the rest.
TransportGooru’s musings: I wonder if the tax payers have to bailout another Bush mess?
(Source: Jalopnik.com).
TransportGooru adores the creative thinkers at Jalopnik and Gizmodo. And here is what our lovely friends at Jalopnik have to say about GM’s state of affairs, with a funny twist.
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