By Rick Manning
The final numbers are in, and according to Reuters, we, the taxpayers, lost $11.2 billion on the General Motors bailout.
However, the bigger question is if Obama officials who were involved in the oversight of operations at GM, were aware of the decade old faulty ignition switch problem that has created a new, gigantic liability for the automaker, prior to dumping the GM shares on the market?
It seems hard to believe that Obama Administration officials were unaware of the problem and the liability associated with it, given their purported direct involvement in the running of the company.
And now that the stock has been sold to unsuspecting saps, the company is being subjected to an alphabet soup of agencies conducting investigations including the Justice Department, various auto safety regulators and even the Securities and Exchange Commission.
A private investor in a similar circumstance would be in big trouble facing probable jail time. After all, Martha Stewart went to the pokey for a lot less.
However, it is unlikely that deposed Treasury Secretary Timothy Geithner will be held accountable, as we know he is too unskilled at even the basics of personal finance (can’t figure Turbo Tax out) to know that a massive recall for a product that caused more than thirty deaths would be a bad thing for a company’s stock price.
The same federal government that went hard after Toyota on trial lawyer driven accusations about sticking gas pedals, apparently was unaware that the company that they were the largest shareholder was concealing a much more deadly and real problem.
But now that the stock has been dumped, the current shareholders who should have felt assured that the auto giant had a clean bill of healthy based upon the federal government’s ownership and direct oversight find themselves holding the bag.
In other auto news, the Toyota Corporation announced that they are moving their U.S. headquarters to Plano, Texas, abandoning their decades old commitment to the state of California, and a state of the art headquarters building. Just a few years earlier, Toyota officials had assured everyone that they were California lifers, after Nissan moved their headquarters from the Los Angeles area to Nashville, Tennessee.
Automotive News reports that the suburban city of Torrance will lose approximately $1.2 million a year in tax revenues due to the move.
With both Nissan and Toyota gone, one wonders how long it will take for the Honda Corporation to abandon Torrance as well.
The coastal corridor south of the Los Angeles International Airport once headquartered many of the defense and auto industry giants. Now towns like El Segundo, which recently lost Raytheon Space and Airborne Systems to Texas, are struggling to make up both the lost revenue and the prestige of being home to some of the world’s largest corporations.
Yet, as those local towns suffer, the engineers, accountants and other high skilled workers who are having to choose between moving with their job or finding a new one in a job market where fewer employers need their expertise are the real victims.
At one point, California was known as the golden state. Now in a perverse kind of reverse alchemy, the state’s politicians are turning that gold into lead. At some point the citizens may figure out that elections have consequences, but it is more likely that they will never connect the dots on why a company would even consider moving from the beautiful California coastline to the flat, dreary town of Plano.
Rick Manning (@rmanning957) is vice president of public policy and communications for Americans for Limited Government. He is a native southern Californian, and has been to Plano, Texas on multiple occasions.
