That was then: Over six years ago, then-vice president Joe Biden (D) was campaigning for a second term for the Democratic administration of Barack Hussein Obama and himself with this proud theme:
If you are looking for a bumper sticker to sum up how President Obama has handled what we inherited, it’s pretty simple: Osama bin Laden is dead and General Motors is alive.
He was referring, of course, to the assassination of terrorist Osama bin Laden, indicating a successful American foreign policy during the Obama administration, and simultaneously the government bailout of General Motors indicating a successful domestic policy of providing for American workers.
Image credit: Ancho.
At that time, after four years of Obama’s rule, the U.S. unemployment rate was 8%.
Well, the theme worked, and that dynamic Democratic duo – plus others – were re-elected for a second term in November 2012.
But a year later, Biden was relatively silent when (emphasis added):
U.S. taxpayers no longer own any of automaker General Motors. The Treasury sold the last of its remaining 31.1 million GM shares today. It started with 500 million shares in 2010.
The taxpayer loss on the GM bailout is $10.5 billion. The Treasury department said it recovered $39 billion from selling its GM stake, and had put $49.5 billion of taxpayer money directly into the GM bailout.
The total bailout rises to $51 billion, including another $1.5 billion that Treasury put into programs to keep GM suppliers afloat and to make sure owners’ warranties were honored, plus some into the old GMAC finance company that’s now known as Ally – separate from a much larger Ally bailout.
Oh. So GM was kept alive artificially until the election.
This is now: On Monday, GM announced:
Today, GM is continuing to take proactive steps to improve overall business performance including the reorganization of its global product development staffs, the realignment of its manufacturing capacity and a reduction of salaried workforce. These actions are expected to increase annual adjusted automotive free cash flow by $6 billion by year-end 2020 on a run-rate basis.
“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” said GM Chairman and CEO Mary Barra. “We recognize the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.”
Contributing to the cash savings of approximately $6 billion are cost reductions of $4.5 billion and a lower capital expenditure annual run rate of almost $1.5 billion. …
- With changing customer preferences in the U.S. and in response to market-related volume declines in cars, future products will be allocated to fewer plants next year.
Assembly plants that will be unallocated in 2019 include:
- Oshawa Assembly in Oshawa, Ontario, Canada.
- Detroit-Hamtramck Assembly in Detroit.
- Lordstown Assembly in Warren, Ohio.
- Propulsion plants that will be unallocated in 2019 include:
- Baltimore Operations in White Marsh, Maryland.
- Warren Transmission Operations in Warren, Michigan.
In addition to the previously announced closure of the assembly plant in Gunsan, Korea, GM will cease the operations of two additional plants outside North America by the end of 2019.
Perhaps GM is reducing its “salaried workforce” and unallocating (a fancy way of saying closing) plants necessitated by “market-related volume declines in cars” (a fancy way of lower car sales) because Obama didn’t buy the electric Chevy Volt he promised he would after he left office.
So – and oh, what a surprise! – taxpayer bailouts to save jobs not only don’t work, but are more costly and ultimately more painful to workers than letting companies succeed or fail or restructure naturally without government interference.
I hope the thousands of laid off workers to be will be able to find new jobs, as unemployment under President Donald J. Trump (R) has dropped to 3.7% and there is a shortage of workers. But realistically, many of the available jobs won’t be in the cities and towns housing the auto plants, and many of the workers don’t have the skills necessary for these jobs, so sadly, many of the newly unemployed and their families will suffer from numerous forms of dislocation plus a drop in income. Thanks Obama and Biden.
Oh, and while bin Laden is still dead, the carnage in Afghanistan continues. On Tuesday, three American servicemen were killed.
What do you have to say to all of this, Joe Biden? Are bin Laden’s successors dead? Is GM still alive?
Oh, you know how he’ll answer: “It is all Trump’s fault.”