GM’s decision to pay off the loan signaled the automaker did not face “extraordinary expenses,” and that Treasury approved the loan payoff.
“The fact that GM made the determination and repaid the remaining $4.7 billion to the U.S. government now is good news for the company, our investment and the American people,” said Herbert Allison, assistant Treasury secretary for financial stability.
Strictly speaking, GM’s claim to have paid back all US Government loans is correct. The only issue is that GM’s ad touting the payback makes no reference to the fact that it still owes the Treasury upwards of $40b. If that misleads folks, well, apparently the Treasury Department isn’t going to do anything about it. Read More >
The Florida legislature gave final approval yesterday to legislation giving municipal governments permission to operate red light cameras in return for a significant cut of the profit generated. The state Senate voted 30 to 7 to adopt a bill that had been approved last week by the House by a 77 to 33 vote. Passage of the measure represents a significant victory for American Traffic Solutions, a firm that installed and operated red light cameras in violation of state law on the gamble that the legislature would eventually authorize photo ticketing.
Virginia Governor Bob McDonnell (R) signed into law last week a proposal that would create an entirely new form of automated ticketing machine, an “airport business” camera. The move followed his approval last month of legislation designed specifically to revive his state’s moribund red light camera program.
Last week’s announcement that had Chrysler turned a Q1 profit and GM had “repaid” taxpayer loans brought a flurry of political posturing about the success or lack thereof of the auto bailout. With Republicans laying into the auto bailout from several angles, President Obama dedicated his weekly address to a defense of industry assistance. Obama still frames the bailout as an unpleasant necessity, but argues that last week’s news means the chances that taxpayers will recoup their “investment” are improving. And apparently the Treasury agrees. According to the Detroit News, Treasury has revised its estimate of auto bailout losses (not counting GMAC) downwards, from $30.6b to $28b. Progress, sure, but hardly a sign that taxpayers can expect full payback from its state-owned automakers.
Red light camera program troubles continue to grow in South San Francisco, California. On Wednesday, the city council will meet to discuss how to pay the $250,000 bill submitted by the San Mateo County Superior Court to cover the administrative costs of processing $3 million worth of red light camera citation refunds. Because the city failed to properly ratify its contract with American Traffic Solutions, the company in charge of automated ticketing, the 6800 tickets issued between August 14 2009 and February 28, 2010 were declared invalid by the court.
With Senator Chuck Grassley (R-IA) already taking the White House and Treasury to task for possibly helping GM avoid paying the “TARP Tax,” Republican representatives Darrell Issa (R-CA) and Lamar Smith (R-TX) are attacking the auto bailout from another angle, writing a letter to nine automaker CEOs requesting clarification of the negotiating process that led to recently-passed final rules on a ramp-up of greenhouse gas (GHG) emissions standards. In their press release on the issue, Issa and Smith note:
It is unclear whether the Administration used leverage created by the possibility of a taxpayer bailout of GM and Chrysler to secure their cooperation and support for new fuel economy standards. Moreover, there is reason to believe Administration officials used inappropriate tactics to ensure broad based support across the industry. Given the clear conflict-of-interest issues at play, which naturally arise when the government is in a position to pick winners and losers and impact the future viability of private entities, it was imperative that the Administration act with the utmost transparency. Instead, the White House imposed an unprecedented level of secrecy.
Are Issa and Smith on to something, or is this simply a partisan dogpile on an unpopular policy? Hey, this is politics… does it even matter?
While the White House and most of the media spent the last two days parroting GM’s claim that it “paid back” taxpayers, Senator Chuck Grassley was busy writing a letter to the Secretary of the Treasury [letter available in PDF here]. The three-page note opens:
Dear Secretary Geithner:
General Motors (GM) yesterday announced that it repaid its TARP loans. I am concerned, however, that this announcement is not what it seems. In fact, it appears to be
nothing more than an elaborate TARP money shuffle.
No surprises there: TTAC has been all over this rusefor months now. Grassley does sum the situation up nicely, stating that “A debt-for-equity swap is not a repayment,” but the most interesting part of his letter is his theory for why GM and the Administration approved the tax-money reshuffle. Thus far, we’ve assumed that PR was the driving concern in this transparent deception. According to Grassley though, there may be another reason…
An intersection in Los Angeles, California is billing drivers nearly $500 for making a turn in the split-second before a permissive green turn arrow appears. Los Angeles hired American Traffic Solutions to operate thirty-two cameras in order to generate about $4 million a year in revenue. The cameras now pounce on drivers making technical mistakes on right-hand turns.
You might think that, when confronted with its first major quality crisis, Toyota would have responded by upping its spending on DC lobbying. After all, when Washington has painted a target on your back, it’s usually a good time to hire a few well-connected friends. But then, a good deal of the congressional scrutiny aimed at Toyota has focused on the company’s lobbying efforts in the first place, especially after the House Oversight Committee leaked Toyota briefing documents that showed the company had successfully negotiated away penalties for defects. Perhaps then, Toyota’s decision to reduce lobbying spending in the first quarter of this year was a reaction to accusations that the automaker manipulated the NHTSA. Or maybe the Japanese firm simply decided that its huge lobbying budget simply wasn’t winning it any friends. In any case, Automotive News [sub] reports that Toyota spent a mere $880k on lobbyists last quarter, down nearly a third from its $1.3m Q1 spend in 2009. And, according to the Toyota report cited by AN [sub], defect recalls don’t even enter into the equation, as Toyota merely
lobbied the House and Senate on such issues as making it easier for workers to unionize, patents, financial regulation and energy matters
Meanwhile, as the image above proves, Toyota wasn’t going to be able to match the lobbying power of a GM anyway.
Red light cameras in the state of California originally were first used to issue tickets to the owners of vehicles that entered an intersection after the light had turned red. In just the past few years, the cameras have shifted focus and now primarily ticket the owners of vehicles that make rolling right-hand turns on a red light. Assemblyman Tom Ammiano (D-San Francisco) wants to further transform the system by introducing green light cameras. The new system, which initially would only operate at a single intersection in Ammiano’s district, would target people who turn right while the light is green.
Be extra careful when you read Bloomberg this morning. It will make you think you had one too many last night. The financial news service reports that Chrysler posted a $143 million operating profit in the first quarter,“after cutting costs and introducing a big pickup.” It’s a miracle alright. Read More >
How cruelly ironic is it that the UK, home of the world’s most vibrant sportscar cottage industry and some of the most notorious “petrolheads” in Europe, is also the world’s leader in automated ticketing and surveillance? Oh, and before you try to answer, understand that Old Blighty’s Orwellian tendencies have just hit a new high/low. The Telegraph [via Jalopnik] reports that Britain’s Home Office is testing new average speed cameras which combine license number-reading technology with a GPS receiver. In contrast to previous generations of speed cameras, the new system, named SpeedSpike, can calculate average speed between any two points in a network, rather than just in a straight line. Read More >
When friends of the automobile think about environmental regulation, our minds tend to tend to leap towards emissions. Between energy independence, air quality and the specter of global warming, a number of political agendas focus auto regulations on the tailpipe and drivetrain, driving a number of changes in the industry. But, as the AP reports, engines aren’t the only automotive components that impact the environment. The state of Washington has voted to ban brake pads with more than five percent copper content by 2021, making it the first state in the union to address the accumulation of heavy metals in groundwater through automotive regulation.
Three California city councils debated whether to keep or discard red light cameras last week. In Loma Linda officials on Tuesday voted to drop automated enforcement while South San Francisco officials voted to keep it on Wednesday. The debates followed in the wake of a decision by the city of San Carlos last Monday to drop cameras after the duration of the yellow light at the camera-enforced intersection was extended by one second, eliminating the system’s profitability.
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