Gas-tax hike looks good to GM chief David M. Dickson (Contact)
Wednesday, March 18, 2009
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Rick Wagoner
[/align]In a surprising turnabout, General Motors Corp. Chief Executive Officer Rick Wagoner said Tuesday that increasing the federal gasoline tax to guarantee a minimum price of $4 a gallon is an idea "worthy of consideration."
Few industries have been more vigorously opposed to hiking the gas tax than automakers. But GM, which is betting its future on high-priced, energy-efficient cars, has switched its historic view and is now open to the federal government setting a new, higher floor on fuel, which would act as an incentive for consumers to buy hybrid and electric cars.
"It's great that smart people are talking" about ideas to conserve energy, Mr. Wagoner told reporters Tuesday. He was referring to recent comments by Michael Jackson, the chief executive of AutoNation, who recommended a huge increase in the gas tax to encourage American consumers to buy fuel-efficient vehicles.
"Michael Jackson is a smart guy," and his idea deserves to be considered, Mr. Wagoner said at a briefing sponsored by the Christian Science Monitor.
When the price of gasoline jumped above $4 a gallon in July, AutoNation, the nations largest chain of new-car dealers, had a two-day supply of Honda Civic gasoline-electric hybrids. By the end of the year, when gas prices dipped significantly, AutoNation had a 148-day supply of hybrids.
"I have fuel-efficient vehicles parked at my dealerships as far as the eye can see," Mr. Jackson was quoted as saying in the Wall Street Journal on Tuesday. "I can't give them away."
Gas priced at $4 a gallon would be "a good start," Mr. Jackson said. The chairman and CEO of General Motors did not disagree.
The average price for a gallon of regular gasoline was $1.91 on Tuesday, according to the Energy Information Administration. To reach $4 a gallon, the federal gas tax would have to increase from 18.4 cents a gallon today to more than $2 per gallon.
A GM spokesman acknowledged that the automaker is thinking about the price of gasoline as an incentive to buy hybrids. "Everybody talks about $4 a gallon because, until gas prices hit $4, nobody saw any shift in consumer behavior," said Greg Martin, GM's Washington, D.C., spokesman. "Only then did people put fuel efficiency front and center."
The Energy Independence and Security Act of 2007 mandated an "aggressive increase in mileage standards," Mr. Martin said. As a result, GM is building fuel efficiency into its entire fleet. However, a lot of factors that raise fuel efficiency "are not particularly sexy," he said, adding that it would take $4-a-gallon gas for the market to shift consumer behavior.
GM has been struggling to stave off bankruptcy. It has laid off thousands of workers and borrowed $13.4 billion from the U.S. Treasury's Troubled Asset Relief Program to maintain operations. To qualify for another $16.6 billion in aid, which the automaker requested last month, GM must prove to a government task force by March 31 that it can be viable over the long term.
Mr. Wagoner downplayed the idea of a GM bankruptcy filing. Debtor-in-possession financing, which GM would need to fund operations while in bankruptcy, would be "potentially huge" and only the government could provide it, he said.
Even the "fast, prepackaged" version of bankruptcy would "bring significant risk," he said. If it couldn't be completed in 30 to 60 days, "a long period of bankruptcy could bring about an end to the company," Mr. Wagoner said, citing research showing that consumers would hesitate to buy cars from a bankrupt company.
People who casually talk about bankruptcy have never been bankrupt, said Mr. Wagoner, whose company lost $38.7 billion in 2007 and $30.9 billion in 2008.
To achieve long-term viability, GM is negotiating with its stakeholders, including the United Auto Workers, its dealers and its bondholders. "Everybody's got skin in the game," he said.
Mr. Wagoner declined to describe negotiations with bondholders, who reportedly have been balking at government demands that they take a 67 percent haircut. He did observe that GM's bonds are trading at about 15 cents on the dollar.
GM's stock, which closed at $2.41 Tuesday, has lost 94 percent of its value from its October 2007 peak of $42.84 per share.
Seriously!!! Does he think this will spark consumers to buy American. First GM asks for tax payers to bail them out because they have ran their company to the ground. Now they want a $4 a gallon tax fix so that we will buy their Volt???
Does Mr. Waggoner think that anyone will buy a vehicle at all with gas at $4 a gallon. Great idea GM!!!!
There is so much wrong with this idea I dont know where to begin.WTF is wrong with this administration.They seem to have no problem at all in using taxes as a weapon to get people to do what they want.Look at ammunition , mention of a 200% tax on it and people started stockpiling, theyve actually made it more expensive and harder to obtain in some calibers just by mentioning a tax increase.
AIG and its bonuses, same deal, they threatened to tax them 100% on these bonuses to get thier money back, I was opposed to the bonuses but Im more opposed to the govts actions in the matter.
A $2+ a gallon tax on cars to make people buy cars they dont want to begin with is a fricking crime, theres a reason people arent buying these cars, they dont want them.Obamas only been in office a couple months and hes already made a bad habit of extorting the public through taxes to get them to comply with thier wishes.
Im not sure if he noticed but the last time gas was around 4$ a gallon was also just about the time the economy took a crap in this country, Im not suggesting it was the sole reason for it but it damn well didnt help people that were already struggling or on the edge of going under.Now we have how many more million people without jobs, far fewer options for credit for loans for things such as new cars, more and more people on the verge of losing thier homes every day, and they want to raise the gax tax to levels that already pissed off the entire country once.Its like pouring gas on a fire, any increase in sales that were taking place for retailers will be wiped out by this and I got a feeling its not gonna help GM or anybody but the govt out in the long run.
There was a post on here not long ago about what it would take to get the American people to revolt, at the time I said we were a long ways from it.I may have to reconsider that statement at this point, if the govts going to use taxation as a tool to extort the public and do it regularly as they have been since Obamas election than theyre going to see some very pissed off people in the near future, this gas tax might do the trick.People were upset when OPEC jumped gas to 4$ a gallon but most had a vauge understanding it wasnt really in our control, our own govt screwing us over on the other hand, thats gonna make a lotta people snap.
Im not sure if he noticed but the last time gas was around 4$ a gallon was also just about the time the economy took a crap in this country, Im not suggesting it was the sole reason for it but it damn well didnt help people that were already struggling or on the edge of going under.Now we have how many more million people without jobs, far fewer options for credit for loans for things such as new cars, more and more people on the verge of losing thier homes every day, and they want to raise the gax tax to levels that already pissed off the entire country once.Its like pouring gas on a fire, any increase in sales that were taking place for retailers will be wiped out by this and I got a feeling its not gonna help GM or anybody but the govt out in the long run.
I work at a foreign auto manufaturing plant and I can tell you what the price of gasoline did to sales. Once gas went over $2 sales started going down. Once it got to $3 sales were almost non existent. I have no clue what this guy is thinking. GM must really be swinging for the fence on this one. Do they really think the Volt is going to save their company??? If this happens you can count on losing all American automakers. I would be safe to say all foreign auto makers that produce in the U.S. This is ignorance at it's best.
Gas has to be way north of $5/gallon in order for the renewable energies to look attractive. Don't think Obama doesn't already know this. Why do you suppose they have been canceling all the new oil leases that were opened up at the end of Bush's term as well as reinstating the offshore ban?
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The economy will never fully recover if gas stays over $2 a gallon. If Obama passes this and we see gas stay over the $5 mark, well...... the riots will commence. They better start training just more than the Marines for domestic crowd control.
Civil unrest will increase to headline news status late summer/early fall, as the stimulus and bailouts fail, prices of goods skyrocket, unemployment passes the double digit mark, and further Obama socialism takes money from the productiveand gives it to leeches.
Bet he owns oil stock !!!!!!!!! ME ME ME thats all that matters to such a BOZO
Actually, it sounds more like to me that GM CEO Wagoner is trying to build up some stock in the Obama regime, and reap some of the dividends that would come with that. Surely, he is smart enough to know that Obama wants the price of gas to go up enoughto make the renewables viable. Being able to sell the hybrids nobody obviously wants is just one benefit. Letting Obama know that he is on board with the plan to do what it takes to raise the price of gas would probably earn him of the title of "Car Czar"on Obama's team.
Between a huge federal gas tax, and Cap and Trade, I think we can only hope for $4.00 gas. Cap and Trade would have a much bigger impact on the whole energy sector than a federal gas tax hike would.
It will all be blamed on "Big Oil." The ironic sad truth is that evil "big oil" is providing a great service to the country that many are soon to see was a great bargain.
C. Davis
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I knew GM had some idiots, but wow!
