"Grand Theft Auto" - How Auto Dealers Fought Back and Won

By Alan Caruba

We are all aware that one of the bail-outs that occurred on Obama’s watch was the takeover of two of the three major auto manufacturers, General Motors and Chrysler companies. As both faced bankruptcy, the Obama administration stepped in to become the owner of these companies.

Among the first to discover the arrogance and ignorance of those selected to direct its Automotive Task Force were hundreds of dealerships for both companies. On May 14, 2009, Alan Spitzer was among them. He was informed that his company, begun by his grandfather, expanded by his father, and one he expected to hand on to his own children had been arbitrarily disenfranchised by Chrysler.

The worst aspect of this was that, while franchises are protected by state law, federal law trumps this long established business relationship. Chrysler had been instructed to divest itself of a quarter of its dealer network and General Motors was as well. Some 2,000 dealerships were affected by the regimes demands.

As Spitzer and his daughter, Alison, spell out in their new book, “Grand Theft Auto: How Entrepreneurs Fought for the American Dream” (http://www.newyearpublishing.com/), “Dealers are completely independent business people, not owned by the auto manufacturers as many believe. Dealers are the manufacturer’s only customers. They are the face of their brands. Without them there are no sales.”

One might have thought that the last thing to do would be to decimate a quarter of General Motors and Chrysler’s vast network of dealers, but that is exactly what the Obama task force did “as a condition for securing the federal funding they needed to stay afloat.” While “saving” the companies essentially was a sop to the auto unions, the task force cut loose the dealers who were the lifeblood of the companies, plunging many of them into economic destruction along with their thousands of employees.

Worse yet, “hundreds of franchises were stolen from their rightful owners and re-assigned or ‘gifted’ to other dealers.” Additionally, anyone who owned GM’s and Chrysler’s securities were informed that neither company would honor them under their new management, defrauding them of their investment. Both companies were required to add union representatives to their board of directors.

They had to have been extraordinarily stupid to do this, but the task force did not include a single person with any experience in the auto industry. If they had they would have known that “States earn about 20 percent of their sales tax revenue from auto dealers.” What’s more, “dealerships comprise as much as 7-8 percent of all retail employment.”

Critical to this extraordinarily thuggish decision was the fact that the dealerships did not cost the auto manufacturers one dime. They were given less than a month to close their doors. Contrary to the belief that the decision of who would be closed was not based on their political affiliations. Indeed, there appeared to be no rational reason for who was chosen for destruction.

The takeover was an example of a gangster government intervening in the private sector; making sure to not “let a crisis” go to waste as it pursued its socialist agenda.

For Alan Spitzer, it was apparent that “the only avenue for justice would be for Congress to enact another federal law that, presumably, would leapfrog the bankruptcy statues and overturn the terminations. In my view, these actions represented a threat, not just to the nation’s 18,000 car dealers, but to our entire franchise system that is so fundamental to the way business is conducted in America.”

The most astonishing aspect to Spitzer’s story is that he literally created a grassroots movement to overturn the government’s illegal and outrageous terminations and that he got a bill passed through a bitterly partisan House and Senate!

The grassroots effort “was directly responsible for saving hundreds of dealerships and tens of thousands of jobs,” said Spitzer. In the end, after Obama signed the legislation that was part of a larger bill, Spitzer actually got to meet the President who still did not give any evidence of understanding what his administration had attempted to do.

The GM and Chrysler takeover was just one more example of how ruthless, ignorant, and incompetent the Obama regime has proven to be with its reckless spending and idiotic “cash for clunkers” programs that achieved nothing more than to get the nation’s historic AAA credit rating reduced and lines around employment fairs that stretch to the horizon.

© Alan Caruba, 2011

My "Interview" with Al Gore

By Alan Caruba

The mainstream media have been trying to find Al Gore in order to interview him about the revelations that the research data supporting “global warming” was cooked—pardon the pun.

Here is my exclusive "interview" with him. You will find the source of his quotes at the end of this Q & A.

Q: Is it true that you lost your bid to become president because of the media?

A: I don’t want to leave the impression that the media’s unwillingness to focus on the global environment was the only reason why the issue failed to ignite serious debate during the campaign.

Q: A lot of people thought you have made too much about an environmental crisis. What do you say to them?

A: For me, the environmental crisis is the critical case in point: now, every time I pause to consider whether I have gone too far out on a limb, I look at the new facts that continue to pour in from around the world and conclude that I have not gone nearly far enough.

Q: Do you still maintain that human beings are causing global warming by burning fossil fuels, driving automobiles, and such?

A: One doesn’t have to travel around the world to witness humankind’s assault on the earth. Human civilization is now the dominant cause of change in the global environment. Humankind is now changing the climate of the entire globe to a degree far greater—and faster—than anything that has occurred in human history.

Q: So, despite the fact that it’s been revealed that scientists in England, America and elsewhere; those affiliated with the United Nations’ Intergovernmental Panel on Climate Change, were falsifying their data, do you still believe in global warming?

A: The theory of global warming will not be disproved, and the skeptics are vastly outnumbered by former skeptics who now accept the overwhelming weight of accumulated evidence.

Q: So you’re still convinced, eh?

A: Siberia is one of the regions of the world that seems to be warming most rapidly.

Q: It’s that bad, eh? What role does capitalism play in all this?

A: The partial blindness of our current economic system is the single most powerful force behind what seem to be irrational decisions about the global environment. Modern industrial civilization, as presently organized, is colliding violently with our planet’s ecological system.

Q: That sounds serious, Al. What can we do?

A: The United Nations might consider the idea of establishing a Stewardship Council to deal with matters relating to the global environment.

Q: But, Al, aren’t the Kyoto Protocols based on the data provided by the United Nations Environmental Program and its Intergovernmental Panel on Climate Change? If the IPCC has been using phony scientific data all these years, maybe it isn’t a good idea to turn the environment of the Earth over to the UN. Well, let me finish up by asking how you feel about automobiles?

A: We now know that their cumulative impact on the global environment is posing a mortal threat to the security of every nation that is more deadly than that of any military enemy we are ever again likely to confront.

Q: Really? What do you propose we do about automobiles?

A: It ought to be possible to establish a coordinated global program to accomplish the strategic goal of completely eliminating the internal combustion engine over, say, a twenty-five year period.

Q: So capitalism is bad. Automobiles are bad. And human civilization is bad. No disrespect Al, but you sound loonier than a spotted owl.

All the quotes attributed to Al Gore were taken directly from his book, “Earth in the Balance: Ecology and the Human Spirit”, published in 1992.

The Earth is in a new, natural cooling cycle that began in 1998.

So far, Al Gore, winner of the Nobel Peace Prize and an Oscar for his documentary, has not been available for interviews.

The US is Committing National Suicide

By Alan Caruba

Growing up as a teenager in the 1950s, I could not wait to get my license to drive and I liked the sporty look of the British MG. These days I drive a Volkswagen. In that short tale can be found the seeds of the end of the American auto industry.

Here’s some history. In 1952, the merger of several British auto companies resulted in the British Motor Corporation. It was the largest of its day with 39% of British output. Despite established dealerships for the various models, a series of poor management decisions resulted in the loss of market share.

By 1968, British Leyland was formed out of British Motor Corporation and became British Leyland Motor Corporation Ltd. In 1975, it was partially nationalized and the government became a holding company. UK market share barely changed and despite brands such as Jaguar, Rover and Land Rover, the government motor company continued its decline.

By 2005, the MG Rover Group went bankrupt, bringing to an end the production by British owned companies. The MG became part of Chinese Nanjing Automobile.

The 1970s were difficult economic times for the United Kingdom and its Labor government (1974-1979), as noted above, created a holding company with the government as the major shareholder. At that point British Leyland employed 159,000 people in its many divisions that included a bus and truck operation.

In 1984, Jaguar Cars became independent once more through a public sale of its shares, but the Leyland truck and bus operation was sold to Volvo in 1988. The Rover Group was sold by the government to British Aerospace that in turn sold it to BMW. Suffice it to say, the British auto industry is now largely owned by companies in other nations or operating as a mere shadow of its former self.

Anyone who thinks that General Motors will revive is wrong. As Larry Kudlow, the radio-TV business maven, recently wrote, “Taxpayers won’t get their money back” and that figure now stands at $50 billion.

Both GM and Chrysler should have been allowed to choose bankruptcy months ago, but the U.S. government in its infinite wisdom has thrown our money down a rat hole created by bad management and excessive labor union demands over the past four decades. Meanwhile, as was the case in the UK, Chrysler is now owned by an Italian auto manufacturer.

The U.S. government now owns GM, AIG an insurance company, and billions in housing mortgages through the government entities of Freddie Mac and Fanny Mae. Kudlow said, “We’re talking about hundreds of billions of taxpayer dollars that will never be repaid.”

That news is bad enough, but consider now that the U.S. government has just increased the standards of how much mileage must be achieved from a gallon of gasoline at the very same time it demands that more of that gasoline be mixed with ethanol. Ethanol reduces mileage. President Obama has already made clear that he wants GM to manufacture “green” automobiles. No one will buy them.

The Telegraph, a British newspaper, recently did the math on the price of “green” cars, noting that the present UK models cost the equivalent of more than about $5,000 US than a comparable non-green model. “To benefit from the difference in fuel efficiency, you would have to drive 198,000 miles, the equivalent of driving around the world eight times.” The same will apply to comparable American-made “green” cars.

Here in America, the biofuels industry receives a 45 cent tax credit for every gallon of ethanol or biodiesel it produces or about $3 billion a year. The US government requires that 10% of all gasoline be blended with these biofuels whether consumers want it or not. This mandate is scheduled to double by 2015.

Not only will the automobiles cost more and get less mileage per gallon, but the Congressional Budget Office last month reported that “the increased use of ethanol accounted for about 10% to 15% of the rise in food prices.” That’s because the main ingredient of ethanol is corn. That is insane.

At the same time, the government refuses to permit exploration and extraction of known oil reserves in the nation’s interior and off its continental coastal shelf despite estimates of literally billions of barrels of untapped oil.

In the Bakken Formation under North Dakota and Montana, there are an estimated 3.0 to 4.3 billion barrels of undiscovered, technically recoverable oil. And we’re not even talking about the billions of barrels off the coast of California, Florida and other coastal states. The U.S. by some estimates has eight times as much oil as Saudi Arabia, eighteen times as much as Iraq and twenty-two times as much oil as Iran.

There is one, single reason why we can’t get at those oil and natural gas reserves, as well as being denied access to the massive amounts of U.S. coal reserves. It is the environmental organizations that maintain a campaign against energy use in the nation.

The government is to blame, of course, but you can thank Greenpeace USA, Friends of the Earth, the Sierra Club, the Environmental Defense Fund, and the United Nations Environmental Program, among countless others that have fought against any and all development, any and all economic expansion and growth.

This campaign is coming to a head with a “Cap-and-Trade” bill making its way through Congress that would impose a huge tax on “greenhouse gas emissions” by every industry and business that produces or uses energy. It has no scientific justification. Even the Environmental Protection Agency’s Office of Transportation and Air Quality has released a study demonstrating that the reduction of CO2 emissions would be minimal at best, but such reductions are absurd because there is no global warming.

Reducing greenhouse gas emissions in the midst of a historic economic crisis, at a time when such emissions will continue in other nations around the world, and when such emissions are known to have no effect whatever on a totally bogus “global warming” or “climate change” is a program for national suicide.

Government control of the auto industry is now merely a prelude to its eventual end. Jobs will disappear forever. “Green jobs” are a myth. The economy will suffer a grievous loss. And, if you draw the lessons from the British experiment, you can accurately predict the future of our auto industry.

Only if control of Congress by the Democrats is ended can measures be taken that will permit the nation to turn away from the destruction being inflicted upon it. Vote in October 2010 as if your life, your children’s lives, and your grandchildren’s lives depend upon it, because it does.

Obama Motors!

By Alan Caruba

What legislators at the federal and state level don’t seem to understand is a fundamental law of thermodynamics. You cannot get more mileage out of a gallon of gasoline than it possesses. Every form of energy, oil, coal, natural gas, has a specific amount of energy it can produce when used.

When you add moonshine like ethanol to a gallon of gasoline, you actually reduce the amount of mileage you get for your dollar.

Meanwhile, the producers of the ethanol are lining their pockets with federal subsidies. Without the subsidies—taxpayer dollars—they would not be able to make a profit and since the ethanol fantasy has managed to drive up the cost of corn—normally a food product—some ethanol producers have already gone out of business because they couldn’t afford it!

California, home to more truly bad ideas about the environment than any other State, has enacted a “California Car Standard” to cut tailpipe emissions of “greenhouse gases.”

There is NO global warming and carbon dioxide has NO impact on the Earth’s climate except to show up in slightly higher amounts hundreds of years after a warming cycle has occurred. What Governor Schwarzenegger hasn’t figured out is that the Earth is well into a cooling cycle since 1998.

In California, all vehicles, cars and trucks, sold in the State will have to average 34.5 miles per gallon by 2015. Recent new standards for trucks, most of which would have to be retrofitted, means that fewer and fewer goods will be delivered in and to California because the cost of retrofitting is so high most truckers and fleet owners will simply decide to avoid doing business there.

Meanwhile, with the U.S. government imposing more and more emission demands on the auto manufacturers, they will ultimately have to start making cars out of paper mache in order to lighten the vehicle enough to achieve utterly meaingless mileage standards.

On top of that, the U.S. government is requiring automakers to make cars that very few people can afford or even want. Pretty soon we’ll have a new auto company, Obama Motors!

Isn’t it communism when the central government gets to decide what must be manufactured?

The effect of putting carbon dioxide emission limits in place on American cars ignores the fact that CO2 is being produced daily in China, India, Russia, Europe, and everywhere else in the world. Let’s not forget, too, that every human being on Earth emits about two pounds of the stuff every day.

The California standard has the effect of banning, not just SUVs, but midsize cars like the Honda Accord and the Toyota Camry. Just how dumb is this?

It is interesting to note that Ford Motor Company has refused to line up for a government bailout. Back in the 1930s when the FDR administration passed a law requiring manufacturers to collude to set higher prices, Henry Ford refused to participate. He believed that competition was the best economic policy. People actually went to jail back then for selling a product or service for less than the price set.

Your President, elected by just barely 6% over the Republican candidate and accompanied by a huge Democrat majority in Congress, is pushing this nation into a deeper recession which in time, if nothing is done to reverse the process, will develop into a full blown depression.

You might want to keep this in mind in 2010 when it comes time to vote for members of Congress. Americans put the Republicans in control in 1994 and we can do it again. At this point, I would vote for a chimpanzee if it was a Republican!

The next politician who, like Al Gore, tells you that the Earth is facing a global warming calamity because of greenhouse gas emissions, should be voted out of office and into the nearest soup kitchen line.

Put Me in Charge of the Auto Companies!

By Alan Caruba

Assuming the Detroit auto manufacturers will get their multi-billion dollar bailout, the question arises whether the men in charge of General Motors, Chrysler, and Ford should continue to run these companies or whether some elaborate government system of oversight and direction should be imposed.

I have the solution to this question. Put me in charge of one or all of these three auto companies.

The reason is obvious. I know nothing about running an auto company and, therefore, I would be ideal for the job.

Ridiculous, you say? Do you think a bunch of government bean-counters know any more than I do? Do you think a bunch of bureaucrats whose chief skill is the writing of an adroit memorandum can do a better job?

As a list of my qualifications, I would like to point out that I have been a licensed driver since the age of 17 which was over a half-century ago. I have, moreover, owned a number of cars over the years. Having always owned Cadillacs, for the past five years I have owned a Volkswagen Rabbit. The Rabbit goes forever on a teaspoon of gasoline.

Some people will complain that my qualifications are too slim, that lots of people own and drive cars. They will demand more experience to run an auto company. Well, I don’t have any experience. If the government put me in charge, it wouldn’t make any difference because I would have the same problems that the guys that do have experience are facing.

That means that every “solution” I would put forth would be met with either polite silence or open derision. This is why the presidents of these companies were forced to participate in the show trials before Congress.

Let’s understand one thing. Four out of every ten jobs in America today are tied in some fashion to the auto industry. That’s a lot of jobs. Suppliers, assembly line workers, the engineers, the sales force, accounting, dealers, advertising agencies, and all manner of other jobs that depend on a healthy auto industry.

We do have a healthy auto industry, except that it is in the southern States where unions do not suck the guts out of it as is the case of Detroit where a union “job bank” pays workers who are not working.

Part of the problem, aside from the unions, is the way Congress has insisted on requiring U.S. auto companies to meet a vast array of standards and even to build cars no wants because they are too expensive and are based on idiotic environmental notions that the world is running out of oil, that oil is bad, and that cars are bad because they pollute the air (cows pollute it far more), et cetera, et cetera, et cetera!

Charlie Wilson, the tenth president of General Motors and a long forgotten Secretary of Defense in the Eisenhower administration, once said, “I always thought that what was good for our country was good for General Motors.” He got into trouble for saying that, but now it appears that what’s bad for General Motors is bad for the United States.

Complicating Life

By Alan Caruba

There was a time when getting the oil changed, along with the filters, and checking the air pressure in the tires of one’s car could be done easily in less than an hour. That was before cars came equipped with more computer power than the original Lander on the Moon.

Thus this otherwise ordinary task turned into a second hour of “interface” with a computer today because some dashboard light was not cooperating. My mechanical skills are largely limited to opening a can of corn for dinner and the mechanic at the service station was serious as a heart attack about solving the problem, but I just wanted to go home.

When I did get home, I had a message from my Internet domain provider and it took a call to customer service to access my account because, for reasons known only to them, they would change my password, but not tell me what my ID name was.

Intellectually, I know that life has improved greatly over the days when the milk was delivered in a wagon drawn by a very large horse to the front of our home. It was World War II and gas was in short supply, but there was something about how that horse knew where the stops along the way were that delighted me as a very young child.

I read a commentary in my local daily about how a large percentage of people in my generation and older don’t know how to use a computer and do not connect to the Internet. That’s a shame because I suspect most newspapers will end up as websites and little more. That’s the route the Christian Science Monitor has taken.

Every time I contemplate how “complicated” life has become from a purely technical point of view, I am also reminded of my Mother telling me how excited she and her sisters were to listen to a radio for the first time in the 1920s. It was just a device in a cigar box with earphones attached, but they could hear a voice coming out of that box and it was extraordinary at the time.

I remember hot summers without the benefit of air conditioning because it hadn’t been invented to the point where you could plug one into the window and turn it on to cool the room. I can remember when there was no such thing as television.

As a writer, I went from a manual typewriter, to an electric one, to one that had a bit of memory, to a computer. I could not write anything these days without the computer.

Technology is a wonderful thing for the way it has enhanced our lives in so many ways, but it often serves to complicate it because we now need an army of people who know how it works when it fails to work. It tends to be less and less forgiving.

When people say, “Life was simpler then”, it was true. A lot of things about life in the era before and after World War II were simpler because there were understood rules of conduct and behavior. They were also more demanding because many tasks were still done by hand. A burst of innovation and productivity after WWII provided clothes washers and dryers, television sets in every home, air conditioners, and every manner of labor-saving device.

The best part, though, was that families really did sit down together at dinner time and mother made the meal from original ingredients. Conversation existed as opposed to text messaging. Life may be “easier” in many ways today, but it is a lot more complicated in others. The rules seem to be missing and the interface with the dashboard computer is not working as it should.