The first rule of taking public money is that by doing so you invite public scrutiny.
General Motors CEO Daniel Akerson should have acknowledged that when Congress raked him over the coals because his government-designed flagship car, the Chevy Volt, has the habit of bursting into flames after accidents.
But instead he chose to imitate his own boss, car-designer-in-chief Barack Obama, and fire off angry, sulking whines that the public didn’t appreciate how great the car is.
“Volt is among the safest cars on the road, earning 5 Stars for occupant safety (with the NHTSA) and a Top Safety Pick from the Insurance Institute for Highway Safety,” he complained in a statement to Congress.
Had he left it at that, all would have been well.
Put then he had to go all incendiary.
“Unfortunately, there is one thing we did not engineer,” he continued. “Although we loaded the Volt with state-of-the-art safety features, we did not engineer the Volt to be a political punching bag.”
Sure he did. Or, more precisely, he should have.
The moment GM asked the US taxpayers to save their company and to save their union, GM made the company a target, and rightly so. If they didn’t design everything after that to be a political punching bag, especially the car they let the president of the United States design, they get an “F” in engineering.
If they’d like, the taxpayers- you know the rest of us that didn’t get a bailout- we can put the company right back the way we found it.
Because right now, legally, General Motors operates as a subsidiary of the US Department of the Treasury, not as a normal public company. US taxpayers and their representatives in Congress have every right, and every obligation to question every penny that GM spends.
As to being the safest car on the road: I suppose if you only measured car safety by gross weight on the road, it might qualify.
To date, the company had sold only about 6,800 of the Chevy Volts. The cars are so safe because they are so rare. They are even safer, in fact, because GM has offered to replace or buy back each one of the cars because of the fire hazard. Bloomberg reports “Nissan has said that it has had no reports of fires in its Leaf electric car. Tesla also said it hasn’t had a fire in its Roadster electric car.” Toyota Prius has had some fire incidents, but there are also 3 million of them on the world’s roads- and somehow, miraculously Toyota didn’t have to rely on taxpayer dollars to pull that off.
As to the money: GM has now slid to a closing price of $24.74 as of January 26, 2012, for an additional loss of $13 billion since the Initial Public Offering price of $33. The company trades at 5.4 times its earnings while non-bailout Ford Motor trades at 7.76 times its earnings. In other words, Ford enjoys a 43 percent premium to GM in the market even though it didn’t enjoy the preferential credit advantage that US government guaranteed financing confers on GM.
Toyota? It trades at 45 times its earnings, even after a tsunami knocked it about last year. Guess what? Toyota doesn’t operate as a subsidiary of the US Department of the Treasury.
I wonder what the stock market understands that Ackerson, Obama and Geithner don’t?
Plenty, I am sure.
Because GM doesn’t define success the way the rest of us in the marketplace do now.
They have a whole other ethos, inspired by Obama: “The Volt’s technology and its recent accolade from Consumer Reports make the Volt a marketing tool for Chevy,” said Alan Batey, vice president for Chevrolet U.S. sales, according to Bloomberg “This vehicle is about more than how many we sell,” Batey said. “This vehicle is a magnet around everything we are trying to do to showcase our brand.”
Ah, the old magnet ploy.
Gosh. Sales have become so passé as a way of measuring success
It’s nice to know from the guy in charge of sales at GM that actual sales really don’t matter, in the same way that Democrats want us to believe that Obama’s actual job performance doesn’t really matter either.
It makes sense, though, when you think about it.
The Volt and Obama: two brands best known for crashing and burning everything around them.
Akerson not included.
PS- If you friend me on Facebook you get sneak peeks of columns! Act now, because I'll only keep this offer open for a short period ;-)
The email function at the top of the page is working. So, let the Hate Mail begin!
Twitter http://twitter.com/#!/bamransom -See more top stories from Townhall Finance.
New Homepage, more content. ---Be the best informed fiscal conservative.
(An important interview) Saving the Net from the surveillance state (And Crony Media): Glenn Greenwald speaks up (Q&A) | Nick Sorrentino