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Friday, July 6, 2012

Don't Wimp Out on the Auto Bailout

Romney, we are told made himself very wealthy with his brains and business sense. Lately on the campaign trail he and his staff have allowed Obama to take deep bows for the auto bailout without a word of rebuttal. If a blogger can refute the success of the bailout surely the Republican nominee should be able to make his case.
General Motors still has friends in Washington. As sales slumped the Obama administration increased government purchases by 79%. Ownership of GM stock is a source of embarrassment to the administration. Obama and company have watched as the value of its stock declined from the initial public offering price of $33 per share to $20.30 a few minutes ago meaning that the taxpayers have lost about 38% of their investment. Romney has the expertise to explain to the voters who are also shareholders, that trusting Obama to invest tax dollars is tantamount to fiscal lunacy.
What about GM's unfunded pension liabilities? he might ask. Right now they stand at $24 billion up from $21 billion less than a year ago. Had GM gone through regular bankruptcy as Romney had proposed the court would have trimmed those liabilities to something manageable. What about the Department of Energy's quietly gifting of $2.7 million of taxpayer money to GM to reduce energy consumption in its door manufacturing process by 50%? Okay that pales in comparison to the $45 billion the taxpayer originally put up but the public was told that GM was solvent, lean, and mean. And why, Romney might ask did GM quietly issue another $ 2 billion in stock to reduce it pension obligations? And why does this profitable, well managed, company have 135 day supply of trucks on inventory. And can the company ever recoup its investment in the Volt at present sales level? Can GM ever be profitable over the long run with its pension obligations or does it merely exist to pay pensions and health insurance premiums? Romney has the financial acumen to show the taxpayers how badly mismanaged the auto bailout has been. These are questions that should be asked and Romney is the man who should be asking them.

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