Jalopnik: president obama

STUDY: Each New GM Vehicle Costs Taxpayers $12,200

Matt Hardigree — Thu, 19 Nov 2009 10:30:00 EST

A study by the obviously pro-government National Taxpayers Union claims each new GM vehicle costs the average taxpayer $12,200. Their bizarre assumptions and our analysis below.

GM has been given $52.9 billion in TARP/Federal loans and financing arm GMAC has been given $12.5 billion of which approximately 8.6 billion can be considered GM money. If total car sales reach 10.5 million in 2009 and 12.5 million for 2010 and GM has roughly equal market share next year as it did in 2008 then GM will sell roughly 5.06 million over the next two years. Add and divide and you end up with about $12,200.

Rather than point out that this money protects jobs and keeps American industry from faring worse than it already is, we'll just make a list of all NTU's assumptions used to come up with the $12,200 per car figure plus our own analysis of how many of their assumptions are full of crap:

GM will sell 5.06 million cars in 2009/2010 combined.
(NTU's numbers on GM sales for 2010 are okay based on a SAAR of 10.5 million, the reality is they'll possibly do worse than the 2.31 million cars and instead do 2.25 million.)
GMAC will loan no money back to finance a car to anyone who is also a taxpayer
(They will)
GM will have the same market share in 2010 it had in 2008
(Almost certainly not. It'll probably be worse)
Total vehicle sales will reach 10.5 million in 2009
(More like 10.7 million as of late October)
Total vehicle sales will reach 12.5 million in 2010
(Maybe.)
GM will not pay the $6.7 billion back
(GM's already said it plans to start paying back the loans at the end of this year and even GM's not that PR-illiterate. We think.)
GM will never pay any loan back
(See above.)
GMAC will never pay any loan back
(GMAC has an unfair advantage according to the NTU study itself, therefore we assume it'll remain in business long enough to pay some portion of the loan back.)
GM will not sell any cars after 2010
(OK, here's the real silly part of the study. We all know GM will more than likely still sell cars after 2010, even if they're cars we wish they wouldn't sell.)

So, to quote Pete Sepp of the NTU, "Every time someone in your neighborhood drives home in a shiny new Chevy Silverado, remember that it cost American taxpayers more than $12,200."*

*assuming everything above.

Study: Every GM Vehicle Sold Costs Taxpayers $12,200(Alexandria, VA) – The American taxpayer has put up $12,200 for every General Motors vehicle sold through the beginning of 2011, and $7,600 for every Chrysler vehicle sold as well, according to a new report issued by the 362,000-member National Taxpayers Union (NTU).
The report, The Auto Bailout – A Taxpayer Quagmire, authored by NTU Adjunct Scholar Thomas D. Hopkins, Professor of Economics at the University of Rochester, does the math on what the government bailout of the auto industry – including General Motors, Chrysler, and GMAC – actually means to American taxpayers, including how much each taxpayer has contributed to the auto industry since December 2008 and how much each vehicle is costing us.
"Every time someone in your neighborhood drives home in a shiny new Chevy Silverado, remember that it cost American taxpayers more than $12,000," said Pete Sepp, NTU Vice President for Policy and Communications. "I wonder if all those Americans without work right now could think of any better ways to spend that money."
The study found that the average American taxpaying family has invested roughly $800 in the auto bailouts so far. Moreover, the study found, the government support poured into General Motors, Chrysler, and GMAC – the financing subsidiary that supports sales at both – now stands at a towering $78.9 billion. Given that figure, and an estimate of how many vehicles GM and Chrysler will sell through the end of 2010, the study finds that each vehicle one of the bailed-out companies sells costs taxpayers $10,700.
Finally, breaking down the costs by company, the study reports that every Chrysler vehicle sold costs taxpayers $7,600, and every GM vehicle sold costs taxpayers $12,200.
The research is based upon a November study released by the Government Accountability Office (GAO), entitled Continued Stewardship Needed as Treasury Develops Strategies for Monitoring and Divesting Financial Interests in Chrysler and GM, " a follow-up report on the "Troubled Asset Relief Program," as well as statements and reports released from the U.S. Treasury.
Additional Findings Include:
• GMAC receives government guarantees not available to most private firms. Coincidentally, these are the same private firms that are forced to compete with GMAC taxpayer-assisted bank, Ally Bank. These guarantees save GMAC about $500 million annually in interest costs. During the first ten months of 2009, GM and Chrysler sales fell further than other major auto producers, down 33.4 percent and 38.9 percent, respectively.  While the prospect of repayment of GM and Chrysler loans might be expected, after bankruptcy the vast majority of the bailout funds are no longer legal obligations of the newly-structured GM and Chrysler. If Americans are to believe public officials' claims that the government will eventually reprivatize the auto industry, the necessity of a thoughtful exit plan is essential. However, at this time no such plan exists, making it likely that the Treasury will not recover its investment.
"[T]he bailout has created moral hazard problems, inadvertently handicapping the progress of stronger, non-subsidized producers," Professor Hopkins concluded. "The problems extend beyond just the auto industry, as favored status for one financial company and its bank necessarily complicates prospects for non-subsidized rivals. The time has come to stop such bailouts, and in an orderly way, to seek at least some recovery for taxpayers."
Note: To view the complete issue brief, The Auto Bailout: A Taxpayer Quagmire, click here.

About the Author
Thomas D. Hopkins is Professor of Economics at Rochester Institute of Technology. He served as Dean of the College of Business 1998-2005 and as President, U.S. Business School in Prague, Czech Republic, an RIT MBA program where he taught 1992-98. He was the Arthur J. Gosnell Professor of Economics in RIT's College of Liberal Arts, 1988-98. Hopkins held senior management positions in two White House agencies during the Ford, Carter and Reagan Administrations; in 1979 President Carter appointed him a charter member of the federal government's Senior Executive Service. In the early 1980s, he served as Deputy Administrator, Office of Information & Regulatory Affairs, in the Office of Management & Budget. His research on business burdens of government regulation has been sponsored by the Organization for Economic Cooperation & Development (OECD) in Paris and the U.S. Small Business Administration (SBA) in Washington. He has testified on regulatory policy issues before committees of the U.S. Senate and House, and Canada's House of Commons. He co-authored a 2001 SBA report, "The Impact of Regulatory Costs on Small Firms," as well as National Research Council reports on marine transportation, the Exxon Valdez oil spill, and trucking/rail/barge transportation. He previously was on the faculty of American University, University of Maryland, and Bowdoin College.
Background
The Auto Bailout – A Taxpayer Quagmire is based on data obtained from the Government Accountability Office and Treasury reports on the Troubled Asset Relief Program. The study was sponsored by the National Taxpayers Union (NTU), a nonpartisan, nonprofit citizen organization founded in 1969 to work for lower taxes, smaller government, accountability from public officials, and economic freedom at all levels. For further information, visit www.ntu.org.

[NTU via Carscoop]

Photo Credit: Brendan Smialowski/Getty Images

New York Airspace Closed Due To Walter Cronkite. Also, President Obama.

Ray Wert — Tue, 08 Sep 2009 19:00:00 EDT

NYC Airspace to close tomorrow because of Walter Cronkite. Seriously. [Mediaite]

Senate Passes Watered-Down Cash For Clunkers Bill, Heads To President Next

Ray Wert — Fri, 19 Jun 2009 09:00:00 EDT

In a 91-5 vote, the U.S. Senate passed a scaled-back $1 billion "Cash For Clunkers" bill. Democrats beat back a Republican attempt to strip the proposal from a $106 billion military spending package. President Obama's expected to sign it. [AutoNews]

President Obama: We Don't Want To Own The New GM

Matt Hardigree — Mon, 01 Jun 2009 13:00:00 EDT

President Obama stressed today he doesn't want to own the "New GM" or run the company. Also, they'll still support "New GM" warranties so have no fear, buy a Malibu.

Ballyhoed New CAFE Standards Riddled With Hummer-Sized Loopholes

Matt Hardigree — Fri, 22 May 2009 12:00:00 EDT

When Obama unveiled new fuel standards we decried the end of fun cars and pointed out how far most automakers are from meeting new-for-2016 fuel standards. It turns out, thanks to Hummer-sized loopholes like your car's air-conditioning, automakers should be able to meet them with little fear.

At issue is the federal government's twin towers of regulation power — the National Highway Transportation and Safety Administration (NHTSA) and the Environmental Protection Agency (EPA). What President Obama announced Tuesday was that the EPA and NHTSA intend to work together to regulate greenhouse gas (GHG) emissions and corporate average fuel economy (CAFE) standards at the national level. This avoids different standards being implemented at the state versus federal level, and to avoid unharmonized or inconsistent GHG emission and CAFE standards.

The problem is, as has been widely reported by everyone in the media, ourselves included, NHTSA is not proposing a 35.5 MPG CAFE standard by model year 2016. Rather, as we're now being told by analysts at Credit Suisse, the EPA intends to propose GHG emission standards that, based on its estimates of model year 2016 light vehicle sales at that time, would result in fleet average CO2 emissions (of vehicles sold in that model year) of roughly 250 grams/mile. This creates at least one huge loophole in the system for automakers to take advantage of.

The Air Conditioner Loophole
That level of CO2 emission per mile would equate to about 35.5 MPG in fuel economy parlance. However — here's the big loophole — it's expected by the EPA and NHTSA that most manufacturers would apply air conditioning improvements to reduce GHG emissions. Air conditioning improvements do not enter into the NHTSA's calculation of MPG fuel economy.

Thus, the improvement in MPG that is equivalent to the estimated 250g of CO2/mile will actually fall well short of the 35.5 MPG mark. The gap between what the fleet CAFE will be and the widely reported 35.5, would be made up by air conditioner improvements. So basically, when you buy your supposedly more-fuel-efficient vehicle in 2016, it won't have as high of a fuel economy as it could — thanks to your car's air conditioning.

Automakers Get Lower Standards The More Large SUVs, Trucks They Build
Credit Suisse also points out in a new report released today that another key component of the proposal yesterday is that the EPA and NHTSA both intend to propose separate footprint-based standards. This is consistent with NHTSA's current approach to CAFE standards and, as such, means that there will be no set standard, with respect to either CO2 or fuel economy, for any single manufacturer or in fact for the fleet as a whole. Any standards you hear about for a given manufacturer or for the fleet as a whole are estimates.

This is because the actual MPG or CO2 "standard" for every manufacturer will vary depending on what they build. Footprint-based means the amount of CO2 emitted and the level of fuel economy will vary depending on the vehicles wheelbase multiplied by its track width. Put another way, the area between where the tires touch the road.

This quote from the proposal addresses the implications for automakers: "Under a footprint-based standard, each manufacturer would have a GHG and CAFE standard unique to its fleet, with a separate standard for passenger cars and light-trucks, depending on the footprints of the vehicle models produced by that manufacturer. Generally, manufacturers of larger vehicles (i.e. vehicles with larger footprints) would face less stringent standards (i.e., higher CO2 grams/mile standards and lower CAFE standards) than manufacturers of smaller vehicles." This clearly favors the domestic makers.

Will That Be Cash Or Credit?
The EPA and NHTSA foresee flexibility in compliance with its proposed standards based on certain credits. Credits can be earned for fleet over-compliance in a given year, and applied in future years. Current consideration is to allow credits to be carried forward for at least 5 years.

In addition to credits at the fleet level that could be carried forward, the agencies intend to consider giving manufacturers the ability to transfer credits among its fleet. That is, if an automaker achieves over-compliance on the car side, it can transfer those credits to the truck side, and vice versa.

Air conditioning credits: AC units contribute to GHG emissions in two ways. First, through the leakage of hydrofluorocarbon (HFC) refrigerants, and second, by placing additional load on the engine, which causes the engine to produce additional CO2. The EPA is considering an approach that would enable automakers to earn credits by reducing GHG emissions (HFC and CO2) related to AC systems. Under the approach, reductions in HFCs would be converted to a CO2 equivalent reduction on a gram/mile basis that could be used as credits in meeting fleet CO2 standards. The EPA said it believes automakers would reduce HFC and CO2 emission through AC upgrades in order to take advantage of these credits.

Additional credit opportunities are being considered to help promote the commercialization of electric and plug-in hybrid electric vehicles. They are called "super credits", and they would take the form of a multiplier such that the number of hybrid/electric vehicles sold would count as more than one vehicle in the manufacturer's fleet average. Thus helping automakers achieve fleet compliance by offering such vehicles, and applying those credits as needed.

Who Comes Out On Top?
All of this doesn't mean the automakers won't have to make an improvement. There's still much work to be done to bring all the vehicles up to these standards, but as we learn more it becomes clearer why so many auto execs were willing to stand behind President Obama.

[Credit Suisse, EPA, Green Car Advisor]

Obama To Announce New Fuel Economy, Emissions Standard Tomorrow

Matt Hardigree — Mon, 18 May 2009 14:30:00 EDT

According to Politico, the Obama administration's announcing a new national auto standards policy for 2016. The plan supposedly marries U.S. fuel economy and emissions standards to California polices and be supported by automakers and policymakers.

Details of the plan are still vague, but it looks as though it will standardize both tailpipe-emissions and CAFE mileage standards so carmakers won't have to worry about meeting numerous and sometimes conflicting goals. We're being told auto executives from around the world plan to fly their private jets to Washington for the purposes of gathering 'round Obama and singing Kumbaya.

Because if this works, Obama will succeed where no president has before — do exactly what every auto exec's asked for from administrations for decades while simultaneously making them all his bitch. [Politico]

Photo: Scott Olson/Getty Images

Obama Knows... How Much Chrysler Should Spend On Advertising

Matt Hardigree — Tue, 12 May 2009 14:00:00 EDT

President Obama's Auto Task Force cut Chrysler's planned bankruptcy marketing budget, $134 million for nine weeks of advertisements, in half. Apparently the Obama Administration's like Bo Jackson from those old Nike "Bo knows" commercials.

The overwhelmingly desperate state the automakers are in, essentially living on the dole, has put them into a position where they're subject to the whim and will of the Obama administration and his task-force. Thankfully, Obama is an expert on everything. What else does Obama know?

Obama knows: Human Resources
Obama knows: Electric Propulsion
Obama knows: The History Of Cars
Obama Knows: The Future Of Cars
Obama knows: Elon Musk is a beggar
Obama knows: Presidential Protection

President Obama, Congress Reach "Cash For Clunkers" Agreement

Matt Hardigree — Tue, 05 May 2009 13:00:00 EDT

We're told the White House and Democrat Congressional leaders have reached an agreement on the so-called "Cash For Clunkers" bill, sending lovers of Malaise Era steel into a complete panic. [Reuters]

President Obama Laughs While U.S. Automakers Cry

Ray Wert — Mon, 23 Mar 2009 08:00:00 EDT

Last night on 60 Minutes, President Obama introduced a bit of laughter-as-the-best-medicine Gallows humor into the Carpocalypse. Here we thought we're the only ones laughing just to stop the heart-wrenching sobs. [CBS News]

Obama To Leno: Electric Cars Are The Future

Matt Hardigree — Fri, 20 Mar 2009 14:01:00 EDT

President Obama was on The Tonight Show talking cars with Jay Leno, who knows a little about the subject. The future of the American car industry according to Obama? Electric cars. Who knew?

ABC Detroit Affiliate Catches Obama's Task Force Driving Volt Mule

The Auto Insider — Tue, 10 Mar 2009 00:10:00 EDT

Channel 7 WXYZ, Detroit's ABC affiliate, managed to capture President Obama's auto task force driving the plug-in Chevy Volt mule during their visit to GM's suburban Detroit Technical Center today.

Click HERE to see the exclusive video from WXYZ's coverage of the event.

Not only did Obama's auto task force visit GM, but they also traveled down the street to Chrysler's Warren manufacturing plant. Both GM and Chrysler are ~~begging~~ asking for an additional $17.4 Billion in government loans, needing this money to survive throughout the coming months.

We're happy the Arizona Senator and Presidential hopeful, John McCain, isn't in charge based on his quote on CNBC today:

"I think the best thing that could probably happen to General Motors, in my view, is they go into Chapter 11. They reorganize, they renegotiate ... the union-management contracts and come out of it a stronger, better, leaner more competitive automotive industry."

Thanks, Senator McCain, for staying positive.

Both GM and Chrysler released statements regarding President Obama's auto task force visit which you can read below:

GM Statement:

"We were pleased to host the Task Force so they could experience firsthand the new products and technologies that are an integral part of GM's near- and long-term competitiveness. We look forward to continuing to support the efforts of the Task Force as they move quickly to address their critical tasks. We believe today's visit provided a constructive glimpse of GM people, their passion for their work, and the technology solutions that are behind the pages of our viability plan."

Chrysler Statement:

Chrysler was pleased to meet today with the Presidential Task Force on the Auto Industry here at our manufacturing plant in Warren, Michigan. Warren Truck Assembly Plant is home to 2,600 Chrysler employees and produces Dodge pickup trucks, including one of the company's best known products, the
Dodge Ram, winner of Car and Drivers' 2009 truck comparison.

We can confirm that on behalf of Chrysler LLC, the meeting was attended by Chairman and CEO Robert Nardelli, Vice Chairman and President Tom LaSorda, Vice Chairman and President Jim Press, and Chief Financial Officer Ron Kolka. In addition to meeting, the group toured the assembly plant and reviewed Chrysler current and future products, including electric and hybrid vehicles.

Beyond this, we are not commenting on the details of our meetings with the Presidential Task Force.

We're fully engaged with the Presidential Task Force on the Auto Industry, the U.S. Treasury and the White House during this process of ensuring the industry's viability going forward. We look forward to continuing our dialogue.

We'll see in the coming weeks how this visit helps our struggling U.S. automakers. Cross your fingers.

[via WXYZ]

Obama's Auto Task Force To Drive Chevy Volt Mule Tomorrow

The Auto Insider — Sun, 08 Mar 2009 23:30:00 EDT

President Obama's auto task force will drive a Chevy Volt test mule during a visit to GM's Technical Center in Detroit tomorrow to help decide if the company deserves more federal loans. [GM-Volt via AP]

Obama Thinks America Invented The Automobile

Ray Wert — Tue, 24 Feb 2009 21:57:27 EST

In tonight's mini-State of the Union, President Obama said the "nation that invented the automobile cannot walk away from it." One problem. We didn't. That would be Karl Benz, in Mannheim, Germany. Just sayin'... [NYT]

Obama's Auto Industry Task Force Drives Imports Like Everyone Else

Matt Hardigree — Mon, 23 Feb 2009 12:00:00 EST

Of the 10 members of President Obama's Auto Industry task force, only two are known to own American cars, two don't own a car, and at least one has a French car in the family.

The majority of the task force, tasked with saving the auto industry, drives Hondas, Mazdas or Volvos. Many of the Honda vehicles are actually built in the US and both Mazda and Volvo are, technically, owned by Ford. Despite the rather bland choices, there are two revelations we couldn't help but appreciate as car fans:

1. Our Vice President owns a 1967 Corvette, which he probably puts few miles on given his love of Amtrak.

2. Diana Farrell, the deputy National Economic Council director, is currently without a car but her husband has a 1985 Peugeot 505 S, which we take to mean a Peugeot 505 Turbo S and not the crappy gas/diesel 505 S. If it's the S Turbo we're talking about a crazy gearhead. If it's an S we're talking about someone who doesn't want to part with an old car. Or maybe it is a base S with an SR20DET swap (we look for hope where we can find it).

Those with high-level cabinet positions don't drive themselves around, typically, so the cars they own are rather old. What this list tells us about the group is they're mostly like the rest of us in their car ownership.

As shown above, Hillary still loves America. Thanks to everyone for the tip!

[Photo: Photo by Joe Raedle/Getty Images, Source: Detroit News]

Obama To Get New, Giant Truck-Based Cadillac Presidential Limo

Matt Hardigree — Mon, 10 Nov 2008 12:30:00 EST

UPDATE: Obama's New Cadillac Limo Officially Unveiled!
With a new president set to take the office, GM is working on a new version of "Cadillac One" for President-Elect Barack Obama — and it's a monster. According to our sources, the new President's state car may look like a stretched Cadillac DTS but is actually based on the GMC Topkick medium-duty truck platform underpinning Ironhide from Transformers. But instead of turning into an alien fighting machine, the Cadillac transforms into a portable bunker likely equipped with five-inch thick glass, cellphone-jamming equipment and blast-proof ceramics. Of course, this is all speculation as the Secret Service won't let anyone know the details of the system.

It's about time the Secret Service stepped up their game seeing as the current limo had a little bit of a break-down in Rome. Though Obama may want a million plug-in hybrids on the road by 2015, the likelihood is this über-heavy Caddy probably downs more fuel than a dozen Prius hybrids combined. What? Did you expect him to drive around in a K-Car? Drive slow, homey.

[Photo: EMMANUEL DUNAND/AFP/Getty Images, Source: Boston Globe]