GM and Ford, Have Faith in Obama?

In case you haven't noticed, Ford and GM are setting new standards in losing money. GM just announced that they managed to lose over $15 billion dollars in the 2nd Quarter, of which, over $6 billion was from ongoing operations. That means that even if they weren't having to pay off everyone they had to lay off, they'd still have lost over $6B. Ford lost close to $9B, but only $1B of that was from ongoing operations. Both companies are in big trouble... Can Obama save them?

Although Barack has never actually worked in the auto industry or in business strategy of any kind, he easily determined that the failure was due to "domestic automakers for focusing on garnering profits with large gas-guzzling SUVs rather than developing small, fuel efficient cars." (Motor Trend's words, not mine, or Obama's for that matter, but close enough).

To help Detroit get back in the game, Obama has pledged to make "changes". First, he plans to "invest" $150 billion over 10 years into the development of alternate energy domestically. A big chunk of which would go to upgrading domestic auto plants so they can make Priuses... uh, I mean Hybrid Malibu's. Additionally, Obama "wants to adjust tax credits and loan guarantees for domestic auto plants and parts makers so fuel-efficient cars can be built in the United States rather than overseas."

Let's break this down a bit. So first off, Obama says Detroit made bad business decisions that have caused them to go down the toilet. So now, he's going to "invest" $150 Billion of YOUR money in these companies? Umm, don't we already have a system in place that allows investment to occur in GM and Ford? Maybe those stocks are going down the drain because investors actually don't WANT to invest in companies that make bad business decisions! But then again, maybe throwing a few tax credits and loan guarantees will do the trick? Those sound like more tax funded subsidies to me.

Why must we continue keeping these guys afloat? This isn't Freddie Mac here. If GM blows up, so what? You won't be able to buy a Malibu or a Hummer anymore - I bet that really wasn't on your to do list anyways, eh? The domestic auto industry is a mess because they're overloaded with debt, are not innovative, have no clue what American and overseas consumers want and they move too slowly to adjust when they figure things out... I won't even go into current infrastructure and unions.

No matter how many billions we are forced to invest in GM and Ford, consumers will continue to buy whatever cars they want. Right now, Toyota and Honda are figuring that out efficiently at a low cost. Obama, I understand you want to win Michigan and Ohio (a democrat winning Ohio goes into the White House, always), but please stop managing my investment portfolio. Things are bad enough without you.