The Catch 22 That I Think Prevented Taxpayers From Recouping GM Money

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1st Gear: I Have A Crazy Theory


Bryce Hoffman has a piece in The Detroit News today about how shares of GM and Ford are way up, which only seems to support a suspicion I've long held about the bailout: The biggest impediment to a GM that could make money for its taxpayer owners was the taxpayer itself.

The stigma of "government motors" and what it meant for GM, despite any underlying economic conditions, was too strong a deterrent, thus the government lost about $10-12 billion on the sale of all its stock.

What happened the day all the stock was sold? GM reached $41 a share, the highest level since returning to public trading.


Ford is also doing well, it should be noted, which I think is more proof that nothing was wrong with GM before the Treasury unloaded all of its shares. Perhaps aware of this, GM also timed out all their big news after the announcement that they were free of the yoke of the government.

2nd Gear: The Japanese And Chinese Stock Markets… Not So Much


While U.S. carmakers and suppliers are feeling a surge, the Asian markets are stumbling along to open this week.

Per Bloomberg, the Japanese can blame a yen that's going up and patience that's going down for the Federal Reserve to decide what to do.


Honda dropped about 2.8% as both the Topix and Nikkei hit big lows.

A little further west, Chinese companies like SAIC dropped on news that Tianjin decides to restrict car ownership via a plate auction/quota system.


3rd Gear: How To Order A Tesla In China


The Tesla Model S is kind of the perfect vehicle for a China that's restricting car ownership but trying to encourage EV use. It's nice enough and sedan-y enough to appeal to the status conscious party functionary, but not so conspicuous it draws unwanted attention.

Thus, as Techinasia notes, the Chinese Tesla site is live. The name Tuosule is a phonetic transcription of "Tesla."


4th Gear: Dodge Not At Fault In Viper Crashes


An investigation by the National Highway Traffic Safety Administration in 2003-2010 Vipers determined that the reports of crashes caused by rear suspension knuckle failures were exactly backwards.

as David Shepardson reports, it was the crashes that caused the suspension knuckle failures.


The fact that older Vipers are crashing is merely proof that they're being driven.

5th Gear: Brazil Is Where It's At


For various reasons I don't entirely understand, the company that bought Jalopnik Brasil is shutting it down. That's truly unfortunate because the guys running it were good people and I always enjoyed seeing my articles in Portuguese.

It's also dumb timing because, while the overall economy shrunk in Brazil, those luxury cars everyone likes to look up to are still doing great.


As Bloomberg uncovered, founder of mega U.S. auto dealer United Automotive Group (which became Penske Automotive Group) is now investing in luxury dealership in the countries.

"Assuming no growth in cars, not a single unit more, by raising service by 8 percent, to 16 percent, I can literally double the profit of every dealership we buy," said Cogan, who plans to take his local company, Autogroup do Brasil, public in London, New York and Sao Paulo in the future.


I invite any of our Brazilian readers to set up a Kinja dedicated to Brazilian cars.

Reverse: Malaise Era Begins

On December 16, 1979, the night before the Organization of Petroleum Exporting Countries' annual price-setting meeting in Caracas, two member states (Libya and Indonesia) announce plans to raise the price of their oil by $4 (Libya) and $2 (Indonesia) per barrel. (The resulting prices—$30 and $25.50 per barrel, respectively—were among the highest they had ever been.) These diplomatic maneuverings were intended to keep OPEC's "price hawks" from raising them even further; nevertheless, by the end of 1979 the cost of oil had more than doubled since the end of the previous year.



Neutral: Taxpayer GM Theory Am I crazy? I think, eventually, the stock price would have gotten to a point where the U.S. would have broken even. But it's faster without the U.S owning GM.


Photo Credit: Getty Images

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