Another day, another administration spinning class:
WASHINGTON (Dow Jones)--A senior adviser to President Barack Obama waged a vigorous defense of the administration's auto-industry rescue Wednesday and said auto finance companies may need more government support. Speaking before an increasingly skeptical Congress, Ron Bloom said it would have been "irresponsible" for the administration to forgive tens of billions of dollars of taxpayer loans to General Motors Corp. (GMGMQ) without taking an equity stake in the company. He said all stakeholders were treated fairly, and he defended plans by GM and Chrysler LLC to cut employees and close thousands of dealerships."The administration's decisions avoided a devastating liquidation and put a stop to the long practice in the auto industry of kicking hard problems down the road," Bloom said in prepared remarks before the Senate Banking Committee.
Hence the preferential treatment of the VEBA claim, the biggest problem in the industry that has been kicked down the road since cars started travelling the road. While the pensioners have made some concessions, the over-employed union has not. From Ron Gettelfinger's letter to the UAW on the concessions the union made:
For our active members these tentative changes mean no loss in your base hourly pay; no reduction in your health care and no reduction in pensions. In addition we were able to slow the import of vehicles coming from China and other foreign sources and put some of that work in two US plants originally scheduled to close.
This isn't kicking the can down the road? Please.
Disclosure: Long GM and F bonds.