GM, Chrysler Suing Taxpayers with Taxpayer Money
Can hubris like this go unpunished?
For a modern-day example, we can turn to the automakers. They are the mortals; President Obama, the god. Except this is no myth.
Earlier this week, Obama instructed the EPA to reconsider the case of California's existing proposal to raise fuel-efficiency standards. The automakers have been fighting California and other states in court for several years. Last week, they pledged to continue that fight - despite the president's instructions and, to a larger extent, his consistent and unequivocal insistence on a "green" auto industry. Except, as it stands now, the automakers are basically using their bailout money -- from taxpayers -- to turn around and sue…the taxpayers themselves.
Last month, General Motors (GM) and Chrysler LLC begged the federal government for $14 billion to stay afloat. They got it - and now they're biting the hand that feeds them. As arrogance goes, not even Ovid could have crafted a finer tale. What remains to be seen is how the offended god will respond.
As California's attorney general, Jerry Brown, pointed out on NPR:
"The irony here is the auto companies want a bailout, in many ways because they weren't building the kind of cars that were compatible with today's energy market – and at the same time, they want to keep going with their lawsuits, which have already cost millions and millions of dollars."
During the Big 3's testimony before Congress, several politicians asked the executives why it made sense to provide them with money: Wouldn't they just use it to continue fighting old battles. The heads of the Big 3 dodged the question, saying they'd prefer a single national standard. Well, they have now answered Congress's question, and in the affirmative.
"Keep in mind that the money that was given was to 2 manufacturers [GM and Chrysler]," Charles Territo, a spokesman for the Alliance of Automobile Manufacturers, which is a party to 2 of the lawsuits, told The New Yorker. "And all manufacturers have opposed the standards. Those lawsuits were brought by the entire industry, to protect the longstanding federal law that says that fuel-efficiency standards should be set at the federal level and not by individual states."
According to The New Yorker, the auto manufacturers have so far lost all the cases that have gone trial.
Mr. Territo and the rest of the industry refuse to see the forest for the trees. Do they actually believe the federal government won't eventually codify higher emission standards, following California's lead? Gone are the days when the industry could deny climate change and break promises to voluntarily cut emissions. Waging a public-relations battle against the Obama administration -- especially given the Big 3's well-documented tone-deafness to public opinion -- is just asking for harsh retribution. Just like in ancient mythology.
So how will Obama enact his revenge? I found one hint from his inaugural speech: "What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long, no longer apply."
The mortals of the Big 3 should watch where they're walking.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter