Chrysler is Flushing $4 billion of Your Dollars Down the Toilet

January/10/2009 18:40PM
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Poof, now you see it, now you don’t . The reason casinos use chips is to make the gamblers feel like it’s not real money they are losing. TARP is like chips. It’s not real money. It’s so much like chips, Paulson and the banks refuse to tell congress how they are spending the $300 billion they have. It’s like watching the circus and laughing at the clowns fall down. Except, at the circus, you pay for a ticket and that’s it. With the circus in Washington, you pay and pay and pay. Way too much for the value of the laughs. Some solace, two of the biggest clowns, Bush and Paulson are exiting stage left. Can’t be too soon.

The biggest clown, Bush, does Chrysler a big favor and gives them a $4 billion loan in December. Chrysler responds quickly by placing some $300 thousand in ads thanking the big clown for the money. How’s that for using your tax dollars wisely?

Not 30 days later financial experts are writing Chrysler’s obituary. Why? Chrysler sold almost no cars in December. My guess, even less than almost none in January. They are laying off thousands. Wait, we gave them the money not to lay off people. Chrysler’s parent also is a big owner of GMAC. How is GM thanking the big clown for their $9.4 billion loan plus the $3 billion to GMAC? By advertising zero down and 0% interest to buy a car. Let’s see, Ford and the foreign car companies that did not ask for a handout must love that. Take the government money and use it as a competitive advantage.

Chrysler is done. We are in for a penny in for a pound. How does Obama deal with Chrysler? Does he throw more at them to tide them over longer so we can flush more tax dollars down the drain? Of course, unions are involved. What would any self-respecting community organizer do in these circumstances? Throw more of your money at a company that is so broken it can’t be fixed. 

It’s just the beginning of good money after bad. Barney Frank wants a big chunk of the remaining TARP money to go for bailing out homeowners who are going to be foreclosed. Facts show that a very large percentage of mortgages where banks have re-done the mortgages to reduce payments are failing again. No problem to Barney, King of Entitlements. main perpetrator of the mortgage mess and the recession. Barney charges ahead. It would be unfair to call Barney a clown. No one in America, not even Rod Blagojevich, needs to go to jail more than Barney Frank and his sidekick Chris Dodd. The two of them make Ken Lay and Jeffery Skilling look like amateurs. They make Barnard Madeoff look like a piker. We should be so outraged as a country that Barney should be called what he needs to be called, a convict.

Until we taxpayers and voters call Barney and Chris to account for what they did to shareholders of Freddie Mac and Fannie Mae, the banks, foreign investors who bought tainted investments, and others who were ruined by his actions, we will just keep getting more of the same. Example, the GMAC car loans are being made to people with credit ratings in the low 600’s. Sub prime car loans with your tax dollars.

One simple question. If Chrysler can’t sell cars anymore, how can they stay in business?

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Comments (2)

  1. RE: New York’s 1.2 Billion Subsidy to AMD-Emirates of Abu Dhabi?

    Please see grass roots proposal and commentary as represented by the letter below.

    [ Proposal Letter Reshaping NY State’s Subsidy for AMD Chip Fab Plant ]

    Albert P. Carey, President and CEO
    Frito-Lay North America
    7701 Legacy Drive
    Plano, Texas 75024

    Dear Mr. Carey,

    I would like to make a proposal for Frito Lay to consider. Please bear with me as I ‘Lays’ the ground work.

    If your not aware, New York State is offering upwards of a 1.2 Billion dollar subsidy for a chip fabrication plant to be located in Saratoga New York. We the citizens of New York, are led to believe this is an effort to bring new jobs to the State –roughly 1,400 jobs. The State has been in lengthy discussions with Advanced Micro Dev ices (AMD) ab out a prospective chip plant. AMD has for a long time waffled despite the fact that the subsidy would be worth, by some estimates, $1 Million p er new job. There is concern that the useful life of the chip plant is ten years typically and the subsidy would amount to $100,000 per year, per AMD job.

    Many taxpayers, rightly so, are trouble by the fact that AMD has shed over 25% of it’s work force in 2008 and AMD stock has lost roughly 70% of it’s value in the last 12 months. Not to mention the fact that the majority ownership in AMD is now held in the Emirates of Abu Dhabi. And, the the incentives have now been transfered to the AMD spinoff: "The Foundry Co. backed by the Advanced Technology Investment Co. of Abu Dhabi and Mubadala Investment, an investment arm of the Abu Dhabi government."

    While business continues to leave the state and organic growth is treated with the herbicides of taxation and regulation -the citizen is left to wonder what the next niche industry might cost?

    Frankly, if this deal goes through, it looks as if the New York State tax payer is ‘Toastitos’.

    First, let me say, as we all know: “Frito-Lay is the undisputed chip champ of North America.” Further, the products of Frito Lay and that of your parent company Pepsico Inc. are American icons.

    Having stated that above, my proposal is simple. I’d like to call it the Frito Rule, but we can call it something else if you insist. Anyway, the classic Frito chip is unique in that it has four sides…think Frito Factor equal to 4; and, Frito Ratio equal to one fourth.

    Here goes. We suggest Frito Lay seek to construct a chip fabrication plant in Saratoga New York. Frito Lay would receive one fourth of the AMD subsidy, or roughly 300 million dollars, furnished by the State of New York. In exchange, Frito Lay must create four times the jobs that AMD is proposing. And, one fourth of those jobs must be in food science, product testing, or otherwise technically skilled –surely this is part of the work force at your current snack chip plants.

    Note the benefits are not only in the form of incentives, this is also a green initiative. Note that Railex USA operates what is commonly referred to as “the produce train” between Wallula, Washington and Rotterdam, New York. Rotterdam is approximately 20 miles from the proposed site in Luther Forest and a railroad spur to the site may be feasible. Or, the chip plant might be located in Rotterdam as the surrounding area actually needs economic development, better yet!

    Back to the railroad, there are actually two trains per week crossing the country in five days carrying produce from the West to the East. It is likely the backhaul (the return trip) capacity is under utilized. This backhaul might serve as a backbone of distribution supplying the entire western United States with Frito Lay products. As the recent advertising would suggest, the railroad could move one ton of ‘Sun Chips’ 436 miles on one gallon of diesel fuel. Considering the packaging requirements, you can ship Frito Lay chips at much high density than AMD chips.

    Now you may have a very real concern about corruption and graft given the reputation of New York politicians. Indeed, we’re tempted to call them ‘Cheatos’. For that reason we strong suggest this proposal be presented to the public directly, thereby avoiding the circumstances that facilitate moral hazard.

    Ultimately, it appears the State is set on subsidizing a new employer at the site. In the spirit of foregone conclusions, as opposed principle, we must endeavor to reshape this subsidy. As you know, a majority of New Yorkers enjoy (value) Frito Lay products often, if not on occasion. The suggestion that a value judgment between AMD chips and Frito Lay chips by the few legislators is appropriate, represents exactly the type of central planning that has saddled the citizens of New York with the current deal.

    Please note I am seeking nothing for myself. I am, however, available for product testing on a work at home basis. I’d like to specialize in the ‘Cool Ranch Dorito’, with which I have some experience already. Hey, we can talk.

    Thank You for your consideration,

    Citizen’s of NY

    PS: Would Frito Lay consider adding a chip branded as “the Bruno” if it would close the deal? Give it some thought, and I’ll explain later.

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