The US Chamber of Commerce’s “On the Road with Free Enterprise” tour has quietly entered its second month. The main story currently on the “Free Enterprise” website is a piece titled “First Ever Sushi Tech Combats Fish Fraud.” The fact that General Motors is hypocritically co-sponsoring a free enterprise tour might bring to mind the words fishy and fraud as well.
“Beneath the deep purple cuts of healthy tuna and the smell of fresh wasabi, there lies a sushi underbelly in America that will make your stomach turn,” reads the first line of the all-important “fish fraud” story. Likewise, GM’s anti-free enterprise bailout process exhibited an underbelly of political cronyism that turned the stomach of those (like GM bondholders and Delphi non-union retirees) who saw there rights subordinated to the politically-favored UAW.
Merriam-Webster Dictionary defines free enterprise as: “freedom of private business to organize and operate for profit in a competitive system without interference by government beyond regulation necessary to protect public interest and keep the national economy in balance.” It rankles many taxpayers and others that were negatively impacted by the Obama-orchestrated GM bankruptcy process that a company which has been known as Government Motors would trumpet “a competitive system without interference by government.”
It is hard to see the point in the US Chamber’s tour, much less in GM’s involvement. It seems like a lot of effort and money being spent to expose the American sushi underbelly. Other highlighted stories include “Bathroom Baron Fights For Business Where You Do Yours” and “Swamp Savior,” a story about a 72 year old Cajun who is trying to “rescue the sinking bayou.”
Perhaps GM thought that its involvement would convince Americans that the company is a stalwart proponent of free enterprise. Instead, it just reminds many of us of all the ways that GM is still anything but pro-free enterprise. The company’s CEO, Dan Akerson, was appointed by President Obama. Besides the obvious conflict with non-interference of government, Akerson’s focus on Obama’s favorite car, the Chevy Volt, is at odds with the portion of the free enterprise definition regarding operating for profit.
GM has shown that it will do whatever it takes to prop up Volt sales and keep the Obama dream of electrifying America’s auto fleet alive. The Volt was already losing money for GM, but that didn’t stop the company from adding up to $5000 in incentives to create demand that otherwise is non-existent. The cost to GM comes on top of the $7500 per vehicle that taxpayers are subsidizing with federal tax credits. Even with all of the money being thrown away on the Volt folly, sales still did not even top 3,000 in June. The extra money spent by GM spurred about a thousand extra sales to a still paltry 2698 units. Assuming an extra $4000 in incentives on each vehicle, GM spent almost $11 million to reach the unimpressive sales results. That comes out to over $10,000 spent for each additional Volt sold. So much for focusing on profits.
In addition to the Volt fiasco, GM still relies on government-owned Ally Financial for most of its financing needs. Ally is doing its part, at the expense of taxpayers, to help GM out. Sub-prime loans for GM have grown much faster than the industry average as auto consumers with shaky credit are welcomed with open arms. Ally also provides the leases for the Volt so that taxpayers can pay to get the vehicles on the road for as short a period as two years.
Ally Financial’s involvement is not the only back-door way that the government continues to support GM at the expense of the taxpayer. On top of the approximate $10 billion that taxpayers are expected to lose on the sale of Treasury’s GM stake, Treasury granted GM tax write-offs valued at close to $40 billion. In another example of hypocrisy, the Obama Administration calls for all to pay their fair share while GM has been granted tax amnesty for years. In fact, the handout allowed GM to take a $35 billion credit for the tax relief which was added to its 2012 4th quarter results.
General Motors would like us to forgive and forget regarding the billions of dollars that were hoisted from taxpayers, creditors and non-union Delphi retirees in the auto bailout process. We are also expected to applaud GM’s efforts to spend billions of taxpayer dollars to promote “green” plug-in vehicles like the Chevy Volt, which have questionable feasibility. It will take a lot more than GM’s hypocritical sponsorship of a free enterprise tour for the spoiled-sushi stench of government’s anti-free enterprise intrusion into General Motors to dissipate.
Mark Modica is an NLPC Associate Fellow.