A class action lawsuit has been filed against General Motors aka 'Government Motors' (GM) for channel stuffing dealer inventories at their dealers. In the mean time, their dealers have been double dipping tax credits to increase their profits. The Federal Gov't says since they are buying fleet vehicles from GM & cannot use the tax credits, the dealers can pocket them.
GM is one of the prime examples of 'crony facism' in the US, only this time the owners of GM are not benefiting, rather the labor unions that received sweetheart deals during the GM bankruptcy. Who suffers? Why of course, you do as the 32% common equity taxpayer 'owner' of this company, for propping it up so union bosses can profit, for paying for the $7,500 tax credit to purchase a Chevy Volt, for paying for the tax credits to the GM dealers, and for paying for the vehicles produced by GM sold to the Federal & municipal Gov'ts. A sure fire loose-loose situation at every turn for the underlying 'owner,' YOU. Moreover, Obama wants to increase the subsidy on the purchase of a Chevy Volt to $10,000 per car that would increase the cost to taxpayers to 10 billion dollars!
Outraged yet? Let's not forget the individuals, mutual fund, institutional & individual shareholders and bondholders of pre-bankruptcy GM that were either wiped out or faced 'cram downs' on their bonds as the Gov't under Obama circumvented existing & well established bankruptcy laws to favor a result for their labor union cronies. Are you tired of paying your "Fair Share" yet?
First,let's get to the background with the underlying 'con' of this cronyism debacle:
Next to the facts from two sources, the National Legal & Policy Center (NLPC) and Bloomberg News. From NLPC:
