This is what happens when you make an inferior product and charge more than your competitors.

Dave007inVegas · Nov 26, 2018

General Motors to announce that it will shutter plants in Michigan, Ohio, Maryland, and Ontario next year.

The company said Monday that it will stop production at five plants next year. The affected plants are
Detroit-Hamtramck and Warren Transmission in Michigan, Lordstown Assembly in Ohio, Oshawa Assembly in Ontario,
Canada, and Baltimore Operations in Maryland.

The closures will affect some 3,300 workers in the U.S., and another 3,000 globally.

Could this be 2009 all over again?

SheriffJoe · Nov 26, 2018

Ah yes, more Obama "solutions"

festeringZit · Nov 26, 2018

Sheriff Joe said:
Ah yes, more Obama "solutions"

Everything that maggot touched was a complete failure.

[h=1]Cash for Clunkers Was a Complete Failure[/h][FONT=Montserrat !important]Scholars confirmed that the program didn’t have any long-run impact.
[h=6]Thursday, July 06, 2017[/h]

[h=6]Daniel J. Mitchell[/h]

Policy Consumption Government Intervention Cars
[/FONT]

[FONT=Montserrat !important]Keynesian economics is fundamentally misguided because it focuses on how to encourage more spending when the real goal should be to figure out policies that result in more income.
Consumption doesn’t drive growth, it’s a consequence of growth.

This is one of the reasons I wish people focused more on “gross domestic income,” which is a measure of how we earn our national income (i.e., wages, small business income, corporate profits, etc) rather than on “gross domestic product,” which is a measure of how our national income gets allocated (consumption, investment, government, etc).
Simply stated, Keynesians put the cart before the horse. Consumption doesn’t drive growth, it’s a consequence of growth.
But let’s set all that aside because we have new evidence that Keynesian stimulus schemes aren’t even very good at artificially goosing consumption.
The Impact of Cash for Clunkers
Three economists (from MIT and Tex A&M) have crunched the numbers and discovered that Obama’s Cash-for-Clunkers scheme back in 2009 was a failure even by Keynesian standards.
The abstract of the study tells you everything you need to know.

[COLOR=#636363 !important]The 2009 Cash for Clunkers program aimed to stimulate consumer spending in the new automobile industry, which was experiencing disproportionate reductions in demand and employment during the Great Recession. Exploiting program eligibility criteria in a regression discontinuity design, we show nearly 60 percent of the subsidies went to households who would have purchased during the two-month program anyway; the rest accelerated sales by no more than eight months. Moreover, the program’s fuel efficiency restrictions shifted purchases toward vehicles that cost on average $5,000 less. On net, Cash for Clunkers significantly reduced total new vehicle spending over the ten month period.

This is remarkable. At the time, the most obvious criticism of the scheme was that it would simply alter the timing of purchases.
And scholars the following year confirmed that the program didn’t have any long-run impact.
But now we find out that there was impact, but it was negative. Here’s the most relevant graph from the study. It shows actual vehicle spending and estimated spending in the absence of the program.

Bad Policy
For readers who like wonky details, here’s the explanatory text for Figure 7 from the study.

[COLOR=#636363 !important]The effect of the program on cumulative new vehicle spending by CfC-eligible households is shown in Figure 7. The figure shows actual spending and estimates of counterfactual spending if there had been no CfC program. Cumulative spending under the CfC program was larger than counterfactual spending for the months immediately after the program. However, by February 1 the counterfactual expenditures becomes larger and by April has grown to be $4.0 billion more than actual expenditures under the program. It is difficult to make the case that the brief acceleration in spending justifies the loss of $4.0 billion in revenues to the auto industry, for two reasons. First, we calculate that in order to justify the estimated longer-term reduction in cumulative spending to boost spending for a few months, one would need a discount rate of 208 percent. Given the expected (and realized) duration of the recession, it seems difficult to argue in favor of such a discount rate. Second, we note that Cash for Clunkers seems especially unattractive compared to a counterfactual stimulus policy that left out the environmental component, which also would have accelerated purchases for some households without reducing longer-term spending.[/COLOR]

By the way, the authors point out that Cash-for-Clunkers wasn’t even good environmental policy.

[COLOR=#636363 !important]One could also argue that this decline in industry revenue over less than a year could be justified to the extent the program offered a cost-effective environmental benefit. Unfortunately, the existing evidence overwhelmingly indicates that this program was a costly way of reducing environmental damage. For example, Knittel [2009] estimates that the most optimistic implied cost of carbon reduced by the program is $237 per ton, while Li et al. [2013] estimate the cost per ton as between $92 and $288. These implied cost of carbon figures are much larger than the social costs of carbon of $33 per ton (in 2007 dollars) estimated by the IWG on the Social Cost of Carbon [Interagency Working Group, 2013].[/COLOR]

So let’s see where we stand. The program was bad fiscal policy, bad economic policy, and bad environmental policy. The trifecta of Obamanomics. No wonder the United States suffered the weakest recovery of the post-WWII era.

https://fee.org/articles/cash-for-clunkers-was-a-complete-failure/

[/FONT][/COLOR]

Willie99 · Nov 26, 2018

I tried to buy an American car this year, but by the time I added the features I wanted, it was just as much, if not more than, the more reliable foreign cars

PatsFan1283 · Nov 26, 2018

Why is this big news?

A company is restructuring, it happens all the time.

rolltide · Nov 26, 2018

i smell a michael moore movie coming

rolltide · Nov 26, 2018

Willie99 said:
I tried to buy an American car this year, but by the time I added the features I wanted, it was just as much, if not more than, the more reliable foreign cars

love my 300 so no complaints with the car but I did go into the purchase understanding that i was sacrificing reliability over the foreign competitors. sucks when you have to do that just to "buy american"

rolltide · Nov 26, 2018

PatsFan1283 said:
Why is this big news?

A company is restructuring, it happens all the time.

because US taxpayers lost $11.2B to supposedly keep from GM closing more plants and laying off more workers and somehow escaped prosecution hiding the ignition defect that resulted in 400 deaths and injuries

other than that it's just a normal company restructuring, genius

PatsFan1283 · Nov 26, 2018

So their CEO has to clear business decisions with the federal government now? State governments, local reps because they were bailed out 10 years ago?

You gotta speak with the President if you wanna downsize now? Was that a condition of the bailout?

Lol @ "genius" coming from the snowflake that was pleading for civility in the poli forum just a few short months ago.

PatsFan1283 · Nov 26, 2018

https://www.cnbc.com/2018/11/26/she...mp-and-general-motors-over-restructuring.html

Seems like a reasonable response to a company restructuring. Sure.

StevieRay · Nov 26, 2018

I know it gets its knocks but KIA is coming out with a bad ass SUV in 2019 with suicde doors , 3rd row seating and reclining captains passenger seats

rolltide · Nov 27, 2018

PatsFan1283 said:
Lol @ "genius" coming from the snowflake that was pleading for civility in the poli forum just a few short months ago.

a snowflake would be someone that takes genuine offense at sarcastically being called a genius.

and nicely done dodging the facts that they blew through $11B of money handed to them by the govt via taxpayer money while ridiculously avoiding prosecution for killing Americans when the judge declared it is not illegal to sell defective vehicles that you knew could kill and injure people. You pretty much lose the independent company angle when the govt gives you $25B and you lose $11B+ of it and then do exactly what you said you WOULDN'T do if you got $20B+

got it now, genius snowflake? sorry to hurt your feelings

SheriffJoe · Nov 27, 2018

Watch: Six Years Ago Obama Promised to Buy a Chevy Volt. Now It Is Dead

Nov 20184,658

2:08

Six years ago, President Barack Obama promised to buy a Chevy Volt after his presidency.

“I got to get inside a brand-new Chevy Volt fresh off the line,” Obama announced to a cheering crowd of United Auto Workers activists. “Even though Secret Service wouldn’t let me drive it. But I liked sitting in it. It was nice. I’ll bet it drives real good. And five years from now when I’m not president anymore, I’ll buy one and drive it myself.”

Now it looks like Obama will not get his chance to make good on the promise. General Motors announced Monday that it would cease production of the hybrid electric plug-in Volt and its gas-powered sister car the Cruze. The announcement came as part of a larger restructuring by the car company as it seeks to focus production around the bigger vehicles in favor with U.S. consumers.

The Volt and the Cruze were two of the signature achievements of the partnership between the Obama administration and General Motors following the auto-industry bailout. Although the Volt was long-planned by GM executives, it received a lot of support from the administration. Obama described the Cruze as “the car of the future.”

Both cars reflected the policies of the Obama administration but never really caught on with the car-buying public. They initially enjoyed a brief bout of enthusiasm from consumers but this was short-lived. Particularly after the price of oil fell dramatically, American consumers moved on to larger vehicles such as SUVs.

The failure of both the Volt and the Cruze is instructive. The Volt was a very high-priced car that was heavily subsidized by government policies, both federal and state, favoring electric vehicles. Many thought its high-price tag doomed it, especially since the gas-powered Cruze was a very similar car at a lower price point. But neither achieved the expected sales. These were cars Americans did not want.

Obama, who once described the manufacture of these cars as “jobs of the future,” could not be reached for comment.

SheriffJoe · Nov 27, 2018

market forces > really REALLY smart people

Dave007inVegas · Nov 27, 2018

PatsFan1283 said:
https://www.cnbc.com/2018/11/26/she...mp-and-general-motors-over-restructuring.html

Seems like a reasonable response to a company restructuring. Sure.

That article is just spin to make it look like somehow Trump was involved.

Companies restructure because of bad decisions made by management. They
claim people aren't buying cars any longer, trucks and SUVs are the name of
the game now. Thing is you don't see any of the Asian manufacturers closing
plants because people aren't buying cars.

Like I said before inferior products that are overpriced tend to not get purchased.

PatsFan1283 · Nov 27, 2018

rolltide said:
a snowflake would be someone that takes genuine offense at sarcastically being called a genius.

and nicely done dodging the facts that they blew through $11B of money handed to them by the govt via taxpayer money while ridiculously avoiding prosecution for killing Americans when the judge declared it is not illegal to sell defective vehicles that you knew could kill and injure people. You pretty much lose the independent company angle when the govt gives you $25B and you lose $11B+ of it and then do exactly what you said you WOULDN'T do if you got $20B+

got it now, genius snowflake? sorry to hurt your feelings

Youre not gonna cry for civility again, are you?

Get back on your meds, son.

So they ran into business problems and now every politician in Ohio thinks they have a responsibility to their community? Are they forever indebted to the federal government and must inefficiently create jobs now? You just don’t have much of a point.

roadreeler57 · Nov 27, 2018

Ive always bought Fords & never had much trouble with any of them....This notion that foriegn cars are better maybe was true 20 years ago but American car quality has really gone up since then....Right now I have an 89 F-150 & a 14 Fusion....Problem is the Fusion was assembled in Mexico but I didnt buy the car brand new...

PatsFan1283 · Nov 27, 2018

Dave007inVegas said:
That article is just spin to make it look like somehow Trump was involved.

Companies restructure because of bad decisions made by management. They
claim people aren't buying cars any longer, trucks and SUVs are the name of
the game now. Thing is you don't see any of the Asian manufacturers closing
plants because people aren't buying cars.

Like I said before inferior products that are overpriced tend to not get purchased.

Reading the comments of people like Tim Ryan, Rob Portman, Kasich, media folks, pundits etc...I'm not sure some of these guys know what a corporation is.

The level of benevolence they're expecting GM to display is pure fantasy. It's a for-profit machine. Nothing more, nothing less.

Acebb · Nov 28, 2018

Somewhere along the way, our political and media classes decided that a union auto-worker deserves an overpaid job for life simply because they work in an assembly plant.

Just bizarre.

ABC was running with the "Trump let the workers down" angle this morning. I guess he was supposed to stop the restructuring somehow? At least according to the 2 workers interviewed Trump made promises that were not kept.

The economic illiteracy in America is just astounding.

WoodStool · Nov 28, 2018

Aren't you the same people that applauded Trump when he saved Carrier and all of the 12 jobs from going overseas by him giving the company tax payer money to stay? Yet this makes you upset?

This is what happens when you make an inferior product and charge more than your competitors.

Life's a bitch, then you die!

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