Barack Obama yesterday announced that, as part of his plan for the automobile industry bailout, the federal government would back warranties offered by American car companies General Motors and Chrysler. The warranties are part of the restructuring pursuant to which the troubled companies will receive bailout money from the federal government.
This government action is supposed to inspire confidence in the American car industry. As Obama himself stated:
If you buy a car from Chrysler or General Motors, you will be able to get your car serviced and repaired, just like always. Your warranty will be safe. In fact, it will be safer than it’s ever been, because starting today, the United States government will stand behind your warranty.
The warranty is part of Obama’s plan to save the American auto industry, which we reported on here. As part of that plan, GM CEO Rick Wagoner was forced to resign, and was replaced by Obama appointee Fritz Henderson.
Now, apparently, the federal government is going into the car industry. As Michelle Malkin points out, Barack Obama, for all intents and purposes, is now running GM, and should roll out a new logo soon.
No Barack Obama quote has made me laugh more than, “the United States government will stand behind your warranty.” This is meant to inspire confidence in consumers? I’m supposed to go out and buy a GM car knowing that the vast, inept government bureaucracy will now provide my car with service and parts?
How exactly is this supposed work? Once GM and Chrysler go bankrupt (and they WILL go bankrupt), will the federal government open its own servicing centers for cars? And you thought the lines at the DMV were bad? Just wait until you have to get your engine fixed by a federal agency.
I am as patriotic a human being as you will ever meet. However, I will not buy an American car any time soon because I believe that the two fundamental principles that America was founded on were private enterprise and excellence. Neither apply to the American car industry now. GM is a bloated bureaucracy that is being propped up by YOUR money. It produces junk that people don’t want and is only alive thanks to hardworking taxpayers who are bearing the burden of their mistakes.
And, yes, I know the automobile bailout was proposed under Bush’s adminstration. I opposed it then, and I oppose it even more now.
See video on the government warrany for GM and Chrysler below:
Government Warranty for Cars
March 31st, 2009 at 10:18 am
I disagree with some of your logic and your imagery is obviously just for fun, but whatever. What I really want to say, is that America does make some great cars too. I’m really looking forward to the Chevy Volt next year. If they can price it right, it and its off-spring could save the company. Big “if” though.
March 31st, 2009 at 10:31 am
I agree with Ignatius here. The thought of filling out form 4048E in triplicate and bringing along a copy of my birth certificate and taking a drug test just to get my fuel injector fixed is a scary prospect.
Also Rob, I have to agree with Ignatius that the current state of American automobile manufacturing is pretty sad. While we have been bogged down for decades with collective bargaining agreements and an inability to fire union workers, the Japanese auto makers have been putting out quality products year after year. It’s hard for a company to give the customer the best possible value when the workers are lobbying for one more 15 minute break per shift all the time.
March 31st, 2009 at 10:36 am
Rob, if America made great cars, people would buy them. You think GM and Chrysler are dying because they are misunderstood?
If the Chevy Volt does everything Chevy says it will, then yes it will be a great car. However, like you said, that is a very big if. Given Chevy’s recent track record, the Volt will likely be a disaster.
I’m more inclined to believe in Tesla. That’s a company outside of Detroit, and who decided not to do things the old way. If any American company reinvents the American car industry, it will have to be from outside Detroit.
March 31st, 2009 at 10:37 am
Rhayader, you agree with me?!?! Wow! We bury the hatchet for one post
March 31st, 2009 at 10:48 am
Haha, hey what can I say, when you’re right, you’re right. Your misguided support of the drug war doesn’t make you wrong when you point out the problems with our wave of nationalization. Besides, I’m sure I’ll say something to get that hatchet out again!
March 31st, 2009 at 11:24 am
It’s probably helpful to remember that American car companies went broke fixing their junk on warranty, among other reasons. GM has been making 5 or 6 brands all with the same body style just different chrome for at least 50 years. Chrysler, at least, has been known for their engineering abilities until the foreign companies came along. Since then all the American makers have been behind the curve. The bleeding for all of them will continue until they’re dead (bankrupt).
Rhayader,
Should we make all drugs legal? Seriously.
March 31st, 2009 at 11:40 am
@Hondo: In a word, yes. This is coming from someone who has never tried, nor has any interest in, “hard” drugs like cocaine, heroin, or meth.
Drugs can be bad, but prohibition does not and will never work. It will just continue to cause more harm than any chemical ever could. End of story.
March 31st, 2009 at 11:42 am
I really really really wanted one of the new Camaros.
However, this “assurance” that the US government is backing manufacturer’s warranties has almost completely turned me off of the idea.
If a company is so bad off that the feds are stepping in and hiring and firing management, and backing the product with taxpayer resources, I’m no longer comfortable that the company is a viable source to purchase a product from - nor am I confident the company will be run better by government than by private interests.
I sadly say this as someone who has owned several Camaros and a Firebird over a period of about 25 years - but I work too hard for my money to toss it away on a company that is obviously so far gone….
March 31st, 2009 at 12:00 pm
Rhayader,
I understand the “prohibition argument” and it’s fanciful to think you can eliminate drugs from the culture. Hard drugs, soft drugs, Mary Jane, Horse, alcohol, Valium etc. are all mood altering chemicals. I don’t think I want my surgeon, pilot, boss, et.al. spacing out.
But the “war on drugs” is an unqualified failure. How about making them all legal but requiring anyone applying for a job or public benefits undergo a drug test? Drugs in your system = no job or benefits. Nobody really needs to be sh*tfaced to live life.
March 31st, 2009 at 12:09 pm
@Hondo: Eh, no thanks, I already get drug tested. There is enough of that going on as we speak.
How about this: let consenting adults do what they want in private so long as they don’t hurt anybody. I have no interest in heroin, but what do I care if Joe Schmo down the street wants some? We keep it away from kids, we don’t let people drive under the influence, we don’t allow it as an excuse for an (actual) crime. In short, we treat it like alcohol, only we don’t advertise it or sell it at every convenience store in the country.
You say nobody needs to be high (or drunk, or whatever) to live life. I agree. I just also think we don’t need to keep everybody else in the world from being high to live life either. Let’s all live our lives as we see fit, and be responsible for the choices we make.
March 31st, 2009 at 12:09 pm
“But the “war on drugs” is an unqualified failure.”
you do not know that.
the number of addicts that would exist if drugs were legalized is unknown.
in fact, from what i have heard meth can cause addiction from just one hit.
cocaine from just a few hits can cause addiction.
make them leagal and the number of people who would “just try them” would skyrocket, along with addiction rates.
i saw one addict on tv who said the first time she had meth she had an orgasm.
March 31st, 2009 at 12:11 pm
Guys, please take the drug discussion to another post, as this one is about car warranties. That’s site policy. Comments need to be on topic. Sorry.
March 31st, 2009 at 12:15 pm
Scottie, that’s exactly what I mean.
The “assurance” will have the exact OPPOSITE effect. Instead of assuring people, it will scare them off. If you need the government to step in for you, you’re obviously doomed.
March 31st, 2009 at 12:22 pm
Good point Ig. Have you ever visited a automobile production line? I grew up in Michigan and have. Most of the workers are on something and act like it. Maybe that’s why your car is designed so poorly and falls apart on your way out of the dealer parking lot.
March 31st, 2009 at 12:38 pm
Fair enough Ignatius. To be honest, I was just answering a question asked of me. I hear you though.
March 31st, 2009 at 12:41 pm
Aaaah ! Not the legalization debate again ?
Rhayader, take Hondo to the thread you and I discussed this at.
It pretty much got narrowed down there
March 31st, 2009 at 1:34 pm
No one even mentions the intent, here. The intent is to do something to keep the auto industry from failing in the short run. It would be really bad if the auto industry failed. Bush & Co. watched Lehman Bros. fail and did nothing. You do not just sit and watch the economy go over a cliff without trying to at least do something to stop it. To act otherwise is irresponsible, or to be a republican that is out of power right now–take your pick. And of course, you got all the facts wrong. They are saying they will back the warranties, not perform them. But lies and spin are de rigueur at rightpundits.com. I’ve learned to expect it.
March 31st, 2009 at 1:39 pm
Arch, how exactly do you back a warranty without performing it if the company goes under? If you back a loan, you pay it if the borrower goes under. If you back a warranty to fix and replace parts, guess what you have to do if the person you back goes under?
March 31st, 2009 at 1:43 pm
In other words, arch, you should look up some key words in the dictionary before accusing someone of lying. Essentially the government is saying it will perform the GM warranty or do the equivalent. What everyone said on this site is valid. If GM goes under, and your GM car breaks down, you will have to deal with a government agency to fix your car, or fill out countless forms to have the government reimburse you for your fixed car. Either way, this is a complete waste of time and money, considering no one is going to buy a GM car going forward anyway.
March 31st, 2009 at 1:56 pm
“No one even mentions the intent, here. The intent is to do something to keep the auto industry from failing in the short run.”
Not !
Obama just wants to hang on to the union vote for 2012
Its been calculated that for all this is costing we could take the funds and give each worker 500,000.00 and that would be that.
The bottom line is this.
If a companys product cant keep it in business then it has no business being in business. Period.
The only other reason you keep that company afloat is for the favor returned.
March 31st, 2009 at 6:44 pm
Ignatius, you have a good blog here, with substance and a point to make. This probably better than anything team obama has done to date raises up a socialization in progress spector. It basically says, that in America Capitalism, the one with the big C failed. John Bogle’s recent book Enough is worth a read if you want to look into the big C failing. I thought we could continue to financially engineer ourselves for years longer but had no idea it would come home to roost so quickly. I forget the author, but in Slate there is a writer who covers American Narcissism, and how the narcissist in spoiled home buyers with no capital came to the fore and how the narcissist in the mortgage origninators to rise to the top of their field came into play, and how the big boys who packaged these toxic assest on wallstreet’s narcissism came into play, ad infinititum. A nation and systme so wrapped into narcissism simply toxified its Capital system with everyones self perception of themselves till it all collapsed. Now we have team obama at the helm with a very different model.
April 1st, 2009 at 4:24 am
OK, everyone who’s discussing the warranty issue (as opposed to drug issues…lol) needs to keep a very important fact in mind.
GM does not manufacture every single component of their cars.
Let me repeat that. GM. Does. Not. Produce. Every. Single. Component. Of. Their. Cars.
What you have is an incredibly huge network of interconnecting companies, each with their own contracts both with each other and with GM, and each with their own contractual *relationship* with some branch of the union.
If/when GM goes under, and if/when the US government begins to honor the warranties on those GM produced vehicles, then the US government is going to have to be dealing with all of these individual company entities in a one-on-one basis to provide the repair parts necessary under any warranty work.
So, whether it’s Delco radios, Goodyear tires, or DuPont paint - or any of literally thousands of other products GM purchases to produce an extensive line of cars instead of producing those items in-house - those products are still required under warranty claims.
And the US government is the one who will be orchestrating those warranty claims since they will be guaranteeing the warranty now.
Is it clear now just how huge a mess this is going to turn out to be, and why it’s now stated that the US government will be handling warranty claims?
April 13th, 2009 at 9:20 am
Ignatius Reilly should reconsider his comments and consider a course in general business knowledge. Let’s just forget the US’s ability to be a strong manufacturing nation and support and protect itself. Ignatius is pointing the US to be services based country. Germany and UK as redoing a wonderful job as such ! 1 in 9 US jobs are based on a successful us automotive industry.
September 7th, 2009 at 7:51 am
insider auto secrets…
“ Multi Theft Auto (MTA) is an open- source software project that adds full on- line gaming support to Rockstar North’ s Grand Theft Auto: San Andreas PC game, in which this functionality is not originally found. It is the first open- source modifi…