Archive for December 22, 2009

Chrysler Says It Won’t Pay U.S. (Us) BackSeparation of “Old Chrysler” and “New Chrysler” Leaves Some Unsatisfied

Posted in Global Warming, Hate, politics on December 22, 2009 by spikestl

Reilly Brennan
Editor-in-Chief, AOL Autos
If you’re keeping a list of who’s been naughty or nice, you might want to sharpen your pencil for Chrysler and GM.

In a special message of holiday cheer, Chrysler announced through filings last week that its pre-bankruptcy self doesn’t appear to want to make good on its $3.7 billion loan from U.S. taxpayers. The money went to the old Chrysler (now called, officially, the “OldCar Co”) through the Troubled Asset Relief Program (TARP) in April of 2009 when the company announced its “fast track” Chapter 11 bankruptcy.

Counter that against the letter then-CEO Bob Nardelli wrote to stakeholders before the money came through:

“Our viability plan demonstrates that Chrysler will repay the U.S. government loans in full, with a premium beginning in 2012,” Nardelli wrote. “As we have indicated all along, shared sacrifice is necessary for Chrysler’s survival.”

Nardelli, long gone, doesn’t have to answer why, but we hope he blushes when he looks at himself in the mirror in the morning. The announcement also appears to fly in the face of TARP’s marching orders, which counted recoupment as a major factor in its passage through Congress. The thinking was that no TARP funds would ever add to the national debt. At least from what we’ve heard from Chrysler, that doesn’t appear to be the case.

When we reached out to Chrysler for comment, spokesperson Shawn Morgan told us: “First, the “Chrysler” you are talking about is now called “OldCar Co” and that company is still in bankruptcy. That company, “OldCar Co” made a filing last week however, you’d need to speak with that company for a comment.” The nuances of the “old Chrysler” and “new Chrysler” as created by the bankruptcy filing are likely to be lost on most in the American public.

To paraphrase Gertrude Stein, $4 billion is $4 billion is $4 billion. Especially when it’s public money.

As commenter “hillsamurai” duly noted in our comments section, “If ‘OldCar Co’ is not going to repay my money that it was given, will “OldCar CO” give me a new car as reimbursement?”

Journalist Chris Woodyard, author of USA Today’s DriveOn blog, describes the awful conditions in which Chrysler is operating as a reason for its inability to pay back the loans made to the “OldCar Co.”

“Chrysler is on track to post the worst sales performance of the 10 largest automakers this year,” Woodyard writes on his site. “Sales tumbled 38% during the first 11 months of the year. In November, sales were still down 25% even as Ford and General Motors had largely swung back to even compared to the same month a year ago, Autodata figures show.

“Not bleak enough? Consider this: Underscoring its lack of product, Chrysler, Dodge and Jeep have no press conferences scheduled for the all-important Detroit auto show where new models are typically unveiled amid lots of hoopla. There used to be one press conference for each brand before its bankruptcy reorganization earlier this year. Dealers are stuck selling the same tired models that have gone without updates for years now. Even Fiat CEO Sergio Marchionne, with a controlling stake in Chrysler, sounds pessimistic about about a turnaround.”

This flies in the face of Chrysler’s last major government bailout, of course. Back in 1979 the company took $1.5 billion in government-backed loans (while only $1 per year went to pay CEO Lee Iacocca’s salary at the time) but was able to repay it ahead of schedule, something that the Heritage Foundation notes as a “favorite example cited by proponents of national industrial policy who call for massive and costly federal efforts to revive what they describe as a deperately ailing American economy.” The foundation was not an advocate of the 1979 bailout (or that of last year, either), citing amongst other things that the current and future laid off Ford and GM workers never understood that their tax dollars were being used to destroy their own jobs in order to save jobs at Chrysler.

GM, on the other hand, is making news from the announcement that it will not only pay back its $52 billion loan, but do so early. Of that $52 billion, a good portion of it went into equity in the company ($45.3 billion in shares, which is why we now say that U.S. taxpayers own about 60 percent of GM) while the rest was a straight cash loan to be repaid over a period of time. The company said it will present the government with a payment of over $1 million by the end of this month, while the remaining $5 billion or so will be paid back by mid next year. This is different from Chrysler’s news, however, because it constitutes the “new GM,” whereas the GM’s version of “OldCar Co” is separate. Confused yet?

Rep. Parker Griffith switches to GOP

Posted in Cool Beans, politics, Tea Party with tags , , , , on December 22, 2009 by spikestl

By JOSH KRAUSHAAR | 12/22/09 10:57 AM EST

POLITICO learns Rep. Parker Griffith will announce today that he’s switching parties to become a Republican.

POLITICO has learned that Rep. Parker Griffith, a freshman Democrat from Alabama, will announce today that he’s switching parties to become a Republican.

According to two senior GOP aides familiar with the decision, the announcement will take place this afternoon in Griffith’s district in northern Alabama.

Griffith’s party switch comes on the eve of a pivotal congressional health care vote and will send a jolt through a Democratic House Caucus that has already been unnerved by the recent retirements of a handful of members who, like Griffith, hail from districts that offer prime pickup opportunities for the GOP in 2010.

The switch represents a coup for the House Republican leadership, which had been courting Griffith since he publicly criticized the Democratic leadership in the wake of raucous town halls during the summer.

Griffith, who captured the seat in a close 2008 open seat contest, will become the first Republican to hold the historically Democratic, Huntsville-based district. A radiation oncologist who founded a cancer treatment center, Griffith plans to blast the Democratic health care bill as a prime reason for his decision to switch parties—and is expected to cite his medical background as his authority on the subject.

While the timing of his announcement was unexpected, Griffith’s party switch will not come as a surprise to those familiar with his voting record, which is one of the most conservative among Democrats.

He has bucked the Democratic leadership on nearly all of its major domestic initiatives, including the stimulus package, health care legislation, the cap-and trade energy bill and financial regulatory reform.

He was one of only 11 House Democrats to vote against the stimulus.

“Look at his voting record – he’s had substantial differences philosophically with the Democratic agenda here in Congress,” said an Alabama ally who is familiar with Griffith’s decision. “It’s something that’s been discussed for the last several months… talking to people in his family. And it genuinely is a reflection of where he feels. It’s his own personal conviction.”

Read more here

Schiff For Senate – Who Is Peter Schiff? A True Patriot

Posted in politics on December 22, 2009 by spikestl

The muscle car world will have a moment of silence…..

Posted in Global Warming, Hate, My E-mail, politics, terrorism on December 22, 2009 by spikestl
TONAWANDA, N.Y. (AP) — General Motors on Friday marked the end of the line for a class of V-8 engine that’s been in production for 51 years.The auto maker’s western New York plant stopped production of the latest variation of the “big block” V-8 engines. Plant manager Steve Finch called it “the end of a remarkable era.”The big engine was developed in 1958 to keep up with the growing size and weight of American automobiles. Over the years it’s been redesigned, with the latest version, the L18, going into production in 1999. Made only in Tonawanda, it powers full-size trucks like the Chevrolet Avalanche and some boats.
Its end puts about 150 employees on indefinite layoff.“Although it bears older technology by today’s standards, the reliability, ease of maintenance and the overall quality of this engine have made it a steady performer for many years,” Finch said before the last engine rolled off the line at GM’s suburban Buffalo complex.It was the second time in a year the western New York plant has stopped work on an engine. Over the summer it wrapped up production of a “high value” V-6 engine, which accounted for about 43 percent of the site’s total production volume last year. The company will continue manufacturing smaller-displacement “small block” V-8s at other plants.The large V-8 was the plant’s longest-running engine line, but has accounted for only about 3 percent of total volume lately as emphasis has shifted to smaller, more fuel-efficient vehicles.The phaseout of both engines was announced in June as part of the auto maker’s bankruptcy restructuring, which spared the plant from closing but not from the loss of 25 to 30 percent of its work force.The Tonawanda engine plant — which 20 years ago employed 4,350 people — currently has about 663 hourly and 140 salaried workers, spokeswoman Nina Price said.
The facility’s main engine line now is the L850, a four-cylinder, 2.2-liter engine found in the Chevrolet Cobalt and Malibu.