Is The Government Deliberately Bankrupting The Auto Industry?

Fact #1: The federal government is going to buy thousands of cars to 'stimulate' the industry.

President Barack Obama said the U.S. government will buy 17,600 new, fuel-efficient vehicles from ailing American automakers by June 1.

Obama made the announcement Thursday in a statement issued by the White House, saying the General Services Administration will spend $285 million of Recovery Act Funds to purchase the vehicles for the government fleet.

The decision was made to buy the vehicles on the short timetable to help give a boost to the economy, as well as demonstrating the Obama administration’s support of the U.S. auto industry.

Fact #2: Due to additional costs from union strangulation, GM and Chrysler lose money on every car they sell.

Honda and Nissan make a pretax operating profit per vehicle of around $1,600; Ford, Chrysler and GM make a loss of $500 to $1,500. That's to say, they lose money on every vehicle they sell.

If you do the math, that works out to as much as $26 million of additional debt for these companies! Can there be any other conclusion here than that the government -- by buying thousands of cars -- is actively trying to bankrupt these auto companies before taking them over?

Hey, it's working for his takeover of the financial industry and the stock market...

There's my two cents.


PS - other fun facts:
1. The government doesn't need those 17,600 cars, so wouldn't a normal person understand that it's a waste of taxpayer money?
2. Remember that little prediction of the government's intent to 'green' the auto industry? This is nothing more than a taxpayer-funded subsidy of 'green' cars that wouldn't otherwise be purchased because people don't want them.