The Search Continues

CBS Detroit is reporting that Federal agents believe that they are about to uncover the remains of former Teamsters Union Boss Jimmy Hoffa. Hoffa disappeared in July 1975.

The article reports:

CBS News has confirmed a suspicious concrete slab was retrieved by investigators from the Oakland Township field where they have been digging for any sign of Hoffa. It’s too soon, however, to know whether the slab is anything more than part of an old foundation for a barn.

The dig — the latest in what’s been nearly a 40-year search — is reportedly the result of extensive FBI interviews with former mobster Tony Zerilli.

As someone who was living in New Jersey during the1960’s, this story amazes me. The rumor in New Jersey was that Jimmy Hoffa was buried under the goalposts in Giants stadium. I guess we are all about to find out whether that rumor is simply not true.

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How Much Are The Taxpayers Actually Going To Lose In The General Motors Bailout ?

Today the Detroit News posted a story about the General Motors exit strategy announced today by the Treasure Department.

The article reports:

The Detroit automaker said it will purchase 200 million shares of GM stock held by Treasury for $5.5 billion — or $27.50 per share — nearly $2 above the stock’s closing price on Tuesday. GM shares jumped sharply on the news and were up 6.7 percent to $27.10, or $1.59.

The U.S. Treasury — after more than a year of refusing to say when it might start selling its remaining stake in GM — said it will announce a written plan in January to shed its remaining 300 million shares over the next 12 to 15 months — likely in a series of small stock sales.

The Treasury’s move is intended to minimize the impact of the stock sale on the share price.

The article states that there will be serious government losses in the General Motors bailout:

The exit plan may prove to be a boost to GM’s lagging stock price and to some car buyers, who have avoided GM because of the “Government Motors” label.

Still, taxpayers will almost certainly lose billions of dollars in the $49.5 billion GM bailout. If the government sold the rest of its stock at current prices, taxpayers would lose more than $13 billion.

Bailing out General Motors was not a good idea. A controlled bankruptcy would have been a better idea. What the bailout did, other than cost the taxpayers serious money, was to protect the unions and ignore what was good for the company in the long run. Even after the amount of taxpayer money spent and the losses taken, there are no guarantees that General Motors will exist in five years.

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What Are They Doing To My Car ?

When I bought my latest Mustang convertible two years ago, I planned on keeping it forever. I added a number of accessories that I normally would not put on a car. Detroit has just convinced me that I made the right decision.

Yesterday the American Spectator posted an article about what Detroit is about to do to the Mustang. It’s not pretty.

The article reports:

Ford‘s new “Evos” concept features gull-wing doors, a rounded, aerodynamic body, and a smaller design clearly inspired by Europe. When Ford officially unveils its new Mustang in 2014, company insiders insist it will embrace this visual transformation.

More pertinent than its changing look will be its changing feel. Rumors abound, to the chagrin of drag racers, regarding the introduction of independent rear suspension. The five-liter engine supposedly morphs into a two-liter one. There is even talk of a hybrid Mustang.

This is the rendering of the new Mustang from their Facebook page. It took me a few years to get used to the look of the 2010 Mustang, but at least it looked like a traditional Mustang. This just doesn’t look right. And just for the record–my convertible is a six-cylinder. On the open road, it gets about 24 miles per gallon. If America would develop her own energy resources and stop cowtowing to OPEC, that wouldn’t be a problem.

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Where Is The Accountability To Taxpayers ?

Breitbart.com is reporting today on where some of the stimulus money went.

The article reports:

A portion of an $11 million grant to help 400 low-income Detroit citizens purchase “business attire” for job interviews helped exactly two people, a city audit reveals.

The audit revealed that the clothing program was supposed to help 400 people. Instead, two people were helped. The people asking for the clothing were required to have a job interview scheduled. Part of the audit included an investigation into the purchase of $182,000 worth of high-end furniture for a department office. In 2009, the department received more than $11 million in stimulus funding and created a service center. 

The article reports:

The center, at 1970 Larned, included the Customer Choice Pantry, the New Beginnings Clothing Boutique and a call center that had the capacity to service 60,000 families in need. The boutique was to provide business attire for low-income residents for job interviews. 

This is sad. The money could have been used to help people out of poverty. Instead it is used to build government infrastructure. Until we have a poverty program that has incentives for government bureaucrats to get people out of poverty instead of building their own facilities and job security, we will never end the poverty cycle.

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An Interesting Perspective On The Auto Companies Bailout

Today’s Wall Street Journal posted an article on the auto bailout and the cost to American taxpayers. The article mentioned the fact that in order to get taxpayers’ money back, shares of General Motors will need to rise to $53 from their current $26 to recoup the Bush-Obama investment. But that’s not the real cost of the bailout.

The article reminds us:

However things shake out, it will be only a fraction of the true costs in precedent and politicized investment. The bailouts signaled that major companies with union labor are too politically big to fail and undermined confidence in the rule of law. More troubling, the conversion of Detroit from an indirect to transparent Washington client continues to distort the auto market.

Last November, Mr. Obama’s enviroteers tightened fuel economy regulations again, jacking them up to 54.5 miles per gallon by 2025—well beyond the standards Congress set in 2007. The auto makers agreed despite their misgivings because as wards of the state they had no political choice. So Chrysler, GM and Ford will still be forced to make cars that dealers struggle to sell profitably, only many more of them.

The rule of law was not followed in the bailouts, and that will create problems for the companies in the future.

The article concludes:

The point is that the auto bailout isn’t an example of enlightened government revitalizing an industry after a market failure. It is a bailout in the wake of failed government policies and bad management that may keep going and going as Washington does whatever it takes to make sure Detroit keeps doing its political bidding.

Government meddling in the private sector is never a good idea.

 

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Even The United Auto Workers Union Is Struggling !

Red Volkswagen Bug

Image via Wikipedia

A website called thetruthaboutcars.com posted a story on Thursday about the financial situation of the United Auto Workers Union (UAW).

The article points out:

In many ways, the UAW resembles the companies it opposed for so long. The UAW is America’s richest union. One of its biggest assets is its strike fund, which stood at $763 million at the end of 2010. If push comes to shove, a union is as strong as its strike fund. The trouble is: The UAW spends more than it takes in. Increasingly, the union has to dip into the strike fund, the Reuters report says. According to government filings, the UAW liquidated $222 million of investments from 2007 to 2009 to cover the shortfall between expenses and revenue.

The article has charts that illustrate the financial problems of the UAW in recent years. One thing mentioned in the article is the fact that the UAW membership fees have dropped to $30 a month. At the same time, the union is having to spend a great deal of money on organizing as some car manufacturers are no longer in Detroit and are no longer unionized.

A Reuters new story reports:

“Volkswagen AG is paying newly hired workers at its Chattanooga, Tennessee plant $14.50 per hour. That is almost exactly what a second-tier UAW worker would make in Detroit. In a sign of demand for jobs at that pay level, the Chattanooga plant had 85,000 applications for more than 2,000 jobs. VW workers have been promised $19.50 after three years on the job. That is just above the $19.28 per hour maximum that entry-level workers at GM would make over the term of the four-year contract now before workers for ratification.”

That is not good news for the future of the UAW.

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The Weekend In Chutzpah

CNS News posted an Associated Press story on a Labor Day Rally held in Detroit yesterday.

The article reports on the President’s statements:

I’m going to propose ways to put America back to work that both parties can agree to, because I still believe both parties can work together to solve our problems,” Obama said at an annual Labor Day rally sponsored by the Detroit-area AFL-CIO. “Given the urgency of this moment, given the hardship that many people are facing, folks have got to get together. But we’re not going to wait for them.”

“We’re going to see if we’ve got some straight shooters in Congress. We’re going to see if congressional Republicans will put country before party,” he said.

My first thought upon reading that quote is “How come only the Republicans have to put country before party?” Up until January of this year, the President held majorities in both the House of Representatives and the Senate. It is rather disingenuous on the part of the President to accuse the Republicans of obstructing his programs. For the first two years of his administration, they couldn’t have blocked anything if they had wanted to. Also, during the time, Congress never even bothered to pass a budget.

The rhetoric at the rally did not lend itself to cooperation between the political parties. This is a quote from Teamsters President Jim Hoffa who spoke at the rally:

“President Obama, this is your army. We are ready to march. Let’s take these son of b*****s out and give America back to an America where we belong.”

Tacky, over the top, but not really all that unusual. However, if the President truly wants bipartisanship, he does need to tone down his own rhetoric. Everything that has ever gone wrong in Washington is not the Republicans’ fault, and negotiations cannot be successful if the President begins with that premise.


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