This is GM under government management

I’m having a tough time with this whole notion of the Conservative government having a seat at the boardroom table of General Motors. Aside from the fact that I think we should be running, not walking, away from any taxpayer investment in this losing proposition, I can’t help but despair at the thought of a business (any business) being run by the same folks who manage to waste most of my tax dollars with such blithe ignorance of the concepts of accountability and value for money.

But the die seems to have been cast, so here are some of the implications of which you need to be aware.

GM Canada headquarters will be moved immediately to Calgary.

The company will be subject to the Official Languages Act. All documents, working papers, blueprints, etcetera will be translated into the second official language. All assembly line robots and senior level plant managers in Windsor must be able to converse fluently in French, English, and IRL (Industrial Robot Language) . 

All parts purchasing will now come under Public Works Canada, the department best known for its inability to get contracts in place in a timely manner – and for pissing off every potential supplier in the process. The “just in time” manufacturing methodology will now be known as the “just some time” manufacturing methodology.

All new model names must be vetted by the Canadian Human Rights Commission to ensure that they are not potentially even vaguely offensive to any obscure special interest group that may or may not exist, now or in the future.

To help “new Canadians” integrate, an appropriate ratio of right-hand to left-hand drive vehicles will be built based on the percentage of immigrants arriving from right-hand drive countries.  Once they become citizens, their vehicles must be immediately converted back to left-hand drive, else the owners risk being labelled “not real Canadians” by Jason Kenney.

Regional benefits will be mandated. GM’s Canadian operations will be split up so that at least 50% of the jobs go to Alberta, 30% to Quebec, and the rest are divided up between the other provinces on a per-capita basis except Newfoundland which has no sitting Conservative MPs. When the Harper Conservatives are given the boot, the allocations will of necessity change with Alberta’s share dropping to 0%.

The product line will be changed to better represent the Conservative’s new Canadian logo – From Sea To Sea To Sea. Consequently the highest production vehicle will be the electric Woodie featuring pine beetle lumber from British Columbia, seats made from PEI and Nova Scotia seal skins (Newfoundland skins are too thin), and batteries from… well, somewhere, ideally up North. A hidden agenda will replace the glove box. It will be available in any colour but red.

On the plus side, GM’s corporate colours are already blue, so that won’t have to change. At least not until the next election.

The water is getting a bit warm….

Like the proverbial frog in the pot of water that supposedly doesn’t realize how hot the water is getting until it is too late and it boils to death, our respective federal and provincial governments (Conservative and Liberal – this is a non-partisan rant) are sitting in a hot tub of epic proportions with the auto bailouts.

A mere 4 or 5 months ago, the total bailout amounts being discussed for Chrysler and GM were in the range of $3 to $4 billion dollars. And those amounts were greeted with howls of outrage from taxpayers and others.

Flaherty’s latest trip to the deficit cupboard was necessitated in part by a ballooning estimate of $10 billion required by GM and Chrysler from the Federal  and Provincial treasuries (i.e. taxpayers). And while McGuinty predicts that the current Ontario deficit should be able to handle the increased bailout funds needed, he also couches his confidence with this: “We're going to keep an eye on it.” In other words, expect to see us back for more later.

And none of this comes with any guarantees whatsoever. There’s nothing to say that $10 billion will be the end of it. GM will still likely go into bankruptcy, and will probably be broken up. Chrysler may yet end up consolidating operations in the US, leaving Canada with nothing but future loft condo properties where factories used to employ thousands.

Actually I misspoke. There is one guarantee, and that is that the taxpayer will never be repaid those billions in ‘loans’ to the auto industry. That you can bet on.

So one has to wonder what the current situation would be if the discussions back in the fall were about a $10 billion dollar (or more) bailout. Would our political ‘frogs’ have jumped right back out of the pot? Or would they have settled in for a nice, long soak?

“Canadians know nonsense when they hear it.”

Today on Adler Online, guest host Roy Green (true Conservative Blue pundit extraordinaire) tried to nail down ol’ Flim-Flam Flaherty on his stunning failure to accurately predict Canada’s budget deficit as recently as 4 months ago.

Green - But how do you miss the deficit numbers by as much as you did in such a short period of time?

Flaherty - Oh it’s not... But... But it’s not a significant change.

You got that right. Being off the mark by about 50% is “not a significant change”. Flaherty then proceeds to explain, one more time, just how we are in so much better shape than the US, the UK, Japan, never really answering the question (no surprise there).

So Green tries again.

Green - But Minister … that $50 billion still represents a huge change from what you projected in January. So where I’m going with this is how do you now stick with that $30 billion number for next year?

Flaherty - A large part of it Roy is the auto settlements. I have a pretty good idea what the General Motors arrangement is going to cost. It’s significantly more than was anticipated, so this is a one time, one year payment. It’s not a continuing deficit and it accounts for a good part of the increase in the deficit that I referred to yesterday.

Still no answer except that now we know that apparently the GM deal is going to cost way more than anticipated. Nothing to indicate he has clue one about next year’s fiscal situation, so Green tries one last time.

Green - Minister, what do you say to the Liberals and their finance critic John McCallum’s challenges that you’ve lost all credibility? What do you say to Mr. McCallum?

Flaherty - Well I look for credibility and all I see on the other side is hypocrisy quite frankly. We asked them for their ideas for the budget, they had none. Literally none. Not one idea for the budget. And the only idea that they’ve come up with the budget according to Mr. Ignatieff is that he has a plan to raise taxes. That’s their only idea. None of the opposition parties are saying to the government, please spend less. What they are in fact are saying is spend more, but don’t increase the deficit, which is nonsense. And Canadians know nonsense when they hear it. (emphasis mine)

No answer to the question, but finally something honest from Flaherty’s own lips. “Canadians know nonsense when they hear it.”  Let us hope that Canadians remember this nonsense when it comes time to vote in the next election and turf this ex-ambulance-chaser-cum-financial-wizard. He is an embarrassment. 

“Mr. Harper left his balls out West….”

The Globe and Mail reports that the GM/CAW agreement will, in fact, result in provincial and federal taxpayers forking over billions to protect the pensions of GM retirees. This in spite of Harper’s and Clement’s repeated assurances to the contrary.

In decrying the blatant about-face, Kevin Gaudet, federal director for the Canadian  Taxpayers Federation, provides one of the best quotes I’ve seen in a while, stating, “Mr. Harper left his balls out West when it comes to taking a principle stand…”. Truer words were never spoken.

I presented my thoughts on bailing out any pension plans in the following letter to the editor, published by the Ottawa Citizen April 27. It now appears more relevant than ever.

“While I certainly sympathise with retirees from Nortel, Chrysler, GM and others who are concerned that their retirement incomes will be impacted by the current state of their companies and the recession, I must protest in the strongest possible terms any government action to guarantee 100% payouts from those defined pension plans.

I am one of the vast majority of Canadians who never had a pension plan, who never had an employer making matching contributions (or better) to my retirement funds. Now retired, what I have to live on I saved from my own earnings. And over the past 2 ½ years, thanks to Jim Flaherty’s income trust fiasco and now the global recession, my retirement fund has slipped to slightly better than 50% of where it was projected to be today. To put it in even plainer terms, my income is now half of what I had expected. As a consequence many plans have been cancelled or deferred indefinitely, and total retirement remains elusive as part-time work supplements my modest retirement income.

There are many, many of us in similar situations, and to ask us to now use our tax dollars to augment the pension incomes of others is neither fair nor appropriate.

By all means provide support to those workers who might lose their entire company pension, but under no circumstances should we be topping up pensions that have unfortunately suffered a similar degradation in value as the rest of us have experienced.”

There’s an international banking problem alright

…and it’s not the overnight inter-bank rate.

We had to send 25 Euros to an agency of the German government. They would accept no form of payment but a bank transfer – no cheques, credit cards, money orders. It had to be a bank transfer to a specific branch and account.

So we paid our local TD Bank $30 in fees to handle the 30 seconds of paperwork (which itself is absurd in this era of electronic funds transfers) and waited for the transfer to work its way through the system.

When, after a few weeks, there was no response from Germany, we followed up to find that the recipient only got 5 of the 25 Euros sent. So it was back to our bank where we were told they “think” it’s because the transfer was handled by 2 banks in Germany, each of which took a 10 Euro fee, leaving just 5 Euros for the ultimate payee.

Our “helpful” banker offered to do some more research to confirm that, but indicated that would entail a further $10 service charge. Instead we could assume that’s what likely happened and just send the missing 20 Euros. For another $30 TD Bank fee. And keeping in mind that the German banks will skim off another 20 Euros when it gets there.

So at the end of the day, a 25 Euro ($40) interbank transfer to Germany cost:

• Funds to payee – 25 Euros ($40)
• TD Bank fees - $60
• German bank fees – 40 Euros ($64)

For a total of $164!

Now there’s a problem I’d like to see old Flim-Flam Flaherty try to fix – the usurious fee structure on the international movement of money in this so-called global economy.

“The greatest government theft of private wealth in history”

So says columnist Gerry Barker in this article in the Guelph Mercury.

Barker aptly likens Jim Flaherty to MAD’s Alfred E. Neuman (“What, me worry?”) and proceeds to articulate just a few of the boneheaded moves of this ex-ambulance-chaser now Finance Minister that make his judgement highly suspect when it comes to getting Canada through this recession with as little long-term damage as possible.

But the main thrust of his piece is focused on the Cons lies about income trusts. According to Barker, Flaherty and Harper were acting under pressure from senior corporate and insurance industry lobbyists whose companies were being negatively impacted by the growing popularity of the income trust investment vehicle. And so, without a shred of hard evidence and using highly suspect tax calculations, Harper and Flaherty reneged on a major campaign promise a mere 9 months into their mandate. As a consequence $35 billion or so of wealth in the  Canadian markets was effectively vaporized overnight, affecting thousands upon thousands of seniors and RRSP holders.

And the pain continues.  Now, current projections are that the government will lose billions in tax revenues annually as trusts (which were taxed in the hands of the taxpayer at rates of 40% or so) convert to corporations (which are taxed under the corporate tax laws at a maximum of 15%). However Flaherty still insists he made the right decision, and still refuses to provide the financial analyses that supported the decision in the first place. But let’s face it, he will never provide those figures for the simple reason that as soon as he does, everyone will see just how incompetent he and his “economist” boss really are.

As Barker says (MAD meets Pogo), “Alfred E. Flaherty met the enemy and, guess what? They is us!”

Danger lurks everywhere!

To prevent my cookie habit putting undue strain on the food budget, I started baking my own. And once I discovered that the number of cups of chocolate chips called for in any recipe is merely a conservative (of the non-political variety) suggestion, I was in cookie heaven.

But I needed new baking sheets because the ones we have all bake at a different rate so it’s 11 minutes on this tray or 13 minutes on that tray, and if you use them both at once an advanced degree in thermodynamics is required to figure out when and for how long each tray should be put in the oven so that all the cookies come out that perfect brown colour, crunchy on the outside with a soft, mushy inside.

So today I bought my new baking sheets. You know the kind - stamped metal, 12” X 20” or so, raised lip to keep the cookies from sliding off prematurely. They came with instructions. Detailed instructions. I’m not sure why we need instructions. I mean, they are cookie sheets. You put raw cookie dough on them, slide them in the oven, and then remove the tray of baked cookies after 12 minutes or so. But someone (or more probably, some LAWYER) decided that these baking sheets required instructions, which leads me to believe that it’s time we took some of those tax dollars out of law schools and put them back where they belong, in High School Home Ec classes. 

Anyway, once I got through reading the instructions (some men do, you know) I came to this warning. “Failure to follow these instructions can result in personal injury or property damage.” (“If you’re going to have instructions you’d better make sure they are followed” – another LAWYER.)

Personal injury? From a cookie sheet? Only if the spousal unit uses it to brain me after I take the last cookie out of the tin. (She too has a cookie problem, albeit not as serious.)

And property damage? There are no moving parts. It’s not flammable. Highly unlikely to explode. Not brittle. Unless I break the coffee table when falling after being brained – see above - what possible property damage could be done by a cookie sheet?

So now I’m worried because since I have been blissfully unaware of the potential lethality of these benign-looking baking tools, what else have I been missing that could, with extreme prejudice, prematurely terminate my cookie habit? Perhaps I’ll just go have a few cookies while I ponder that question and this one: How much chocolate in a chocolate chip cookie is too much?

Politicians as business leaders?

As Randall Denley says in today’s Ottawa Citizen, “Events of the past several months have certainly made private-sector executives look incompetent, but the corollary is not that politicians are better at business.”

He then goes on to describe how the public and private sectors have different motivators and drivers as well as different reward systems.  In short, a properly functioning marketplace operates on a financial risk-reward basis, while governments operate in a no-risk environment where they control the resources, the laws, the money-collecting mechanisms, and the money-printing equipment to be used once the taxpayers have been wrung dry.

And the irony of it all is that we now have politicians taking control of large businesses like GM and Chrysler, not because the politicians have better business smarts (you only need to look at Jim Flaherty to prove that point) but because the businesses had themselves become too big and unwieldy. “GM is failing because it is bureaucratic, unable to make tough decisions, can't control costs and doesn't have a compelling plan for the future. In other words, it was run too much like a government and not enough like a business.”

With few exceptions (across all parties) I wouldn’t trust the fiscal ability of any politician to balance my check book, let alone direct the day-to-day operation of a multi-billion dollar corporation dedicated to profits and wealth creation. Yet that is precisely what they are doing.

If GM and/or Chrysler are going to fail, they will fail for reasons beyond the scope of this (or any) government to fix, so by dabbling in an area they know nothing about, the politicians are simply delaying the inevitable and incurring huge taxpayer obligations in the process.

"I don’t have the brains for business. I want to go into politics." - Mao Xinyou

Where “no” means “yes”

As I blogged yesterday, the Conservative Party’s riding nomination process seems to have something of a democratic deficit, to the advantage of sitting MPs. Well it gets even stranger.

Under the headline “Tories c all nomination rules democratic” The Calgary Herald reports today that Conservative party president Don Plett finds it “very, very strange that somebody would even suggest that this is not democratic.”

His comment follows an explanation that ballots were mailed out to 94,000 party members, and that ballots not returned were counted as no votes.

In what kind of a democracy does a non-vote get counted? Is this what the Harper Conservatives are planning to do to save their skin in the next federal election? If you don’t show up on polling day your vote will automatically be tallied as a vote for the Con candidate?

Mr. Plett, that is not how a democracy works.

“The party of the grassroots just dug up the lawn.”

This just has to be the quote of the day, offered in a comment to this article in the Globe and Mail about the Conservative Party’s latest affront to democracy whereby sitting MP’s are shielded from nomination challenges unless a minimum of 2/3 of the members of a riding association call for a nomination race in their riding.

According to the article, Tories claim the change is “necessary to ease stress on their MPs and allow them to stay focused on the onerous demands of a minority government.”  Yes, that would be the onerous demands of jeering and clapping in the House like a bunch of trained seals (By the way, where is the seal hunt when we could really use it?), memorizing and parroting back PMO-provided talking points, and staying well out of sight (and sound) unless trotted out by his Harpiness to answer legitimate but potentially embarrassing questions directed at any sitting Cabinet Minister. I can see why they need all their energy for that.

Of course the big winner in all of this is Rob Anders of Calgary-West. When Don Martin, writing in his home town paper, The Calgary Herald, says this about Anders, “Raise his name with Conservative MPs and they wrinkle their noses like they've just taken a big whiff of the stuff spring uncovers in an off-leash dog park.”  you’d think the Cons would be desperate to dump him. But no, this ruling assures him of yet another run at representing the fine folks of Calgary-West who clearly would elect a stump if they painted it blue and stuck a Suncor sign on it.

However there is a small glimmer of light in all of this as apparently the change has pissed off at least one well known grassroots nutbar. Chuck McVety is not happy, claiming “The democratic deficit in this country is already large enough. We don't need the governing party to be sinking deeper into ... a culture of entitlement.”  Uh, yeah.