THE CAR COACH REPORTS: WEEK IN REVIEW
The Feds Make Us Pay Edition
GM is buying back $5.5 billion in stock from the U.S. Treasury. Hooray, no more Government Motors! In fact, GM plans on untangling itself from the feds completely over the next year or so:
http://online.wsj.com/article/SB10001424127887324461604578189071250022486.html
This is great news for GM. They will no longer have the stigma of being controlled by the government, their executives will get pay raises and fly private jets again, and their sales could possibly increase because conservative car buyers will feel better that the company is once again sovereign.
We can now all rejoice over the fact that GM was able to emerge victorious from its darkest days just a few years ago.
Wait, I’m not so sure we should be rejoicing. There’s the pesky little matter that taxpayer dollars were used to bailout GM and the fact that the company is buying back the shares at roughly half the value of what the feds paid. All told, more than $20 billion will be lost at the taxpayers’ expense.
I am NOT okay with this but none of us have a choice. Does this seem right to you?
Speaking of not being okay, the fiscal cliff is looming and there doesn’t seem to be a solution in sight. Should we go over this cliff, we will experience the largest tax hike in American history and are likely to see another recession a la 2008-2009.
This means banks will once again restrict lending and the auto industry could go back into the doldrums. My advice for potential car buyers is to buy that car now. Don’t wait until after January 1—you may not get a loan. There are lots of end-of-the-year deals to be had, so take advantage of them.
What are your thoughts?
Post your comments at http://laurenfix.blogspot.com/
My Final Thought:
I’m going to break from tradition here and end this blog entry by saying that I truly hope everyone has a wonderful holiday, a merry Christmas, and a stupendous New Year!
Love your car! See you in 2013!
--Lauren Fix
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