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Bail Me Out . . . and I’ll Urge a Gas-Tax Hike for You

You hit up the taxpayers for an unpopular $50 billion loan, then tell them they’ll lose $14 billion on their investment. What do you do for an encore? Government Motors CEO Dan Akerson wants to hike your gas taxes.

Someone gets this guy a PR department.

In a wide-ranging interview with the Detroit News, Loose Lips Akerson — a telecom exec who is the latest CEO to come through GM’s revolving executive-suite door — let fly that he would like to see the “federal gas tax boosted as much as $1 a gallon to nudge consumers toward more fuel-efficient cars.” Akerson’s comments are more evidence of the cozy relationship between the Obama administration and the Rentseekers’ Roundtable. From banning light bulbs for GE to giant green loans for Dow and LGChem, Green zealot Obama and his corporate henchmen have pursued policies aligned with corporate interests — not consumers.

“You know what I’d rather have them do — this will make my Republican friends puke — as gas is going to go down here now, we ought to just slap a 50-cent or a dollar tax on a gallon of gas,” Akerson said. Trouble is, that attitude will make Akerson’s customers puke too. Is this really good business?

Akerson might have sympathized with his customers at a time when gas prices are pinching incomes and unemployment remains stubbornly high. Instead of explaining the folly of Washington’s ideological 62-mpg-by-2025 mpg fuel-economy mandates, however, the Government Motors chief colludes with Washington to steal even more money from taxpayer wallets.

But Akerson’s outrageous comments are not just harmful for his customers – they make no sense for his company.

Akerson knows full well that the reason GM and Chrysler have paid off their government loans early is because fuel prices have declined, boosting the SUV market and their high per-vehicle profits. America’s low gas prices and high disposable income are why companies like Fiat are so desperate to enter the American market — because they make more money here on Jeep Grand Cherokees than on fuel-taxed, econobox Fiat 500s.

This kind of nonsense has earned Akerson scorn among auto insiders. “This is Dan Akerson live and in living color, folks,” writes veteran industry executive Peter De Lorenzo on his blog, “bringing his remarkable arrogance and nuanced cluelessness to bear on key product decisions that will affect GM’s competitive stance for years to come.”

By dragging America towards a Euro-Asian model, Akerson sets GM up for failure. Green may be politically correct in Washington, but it is bottom-line suicide — especially for a company that is already at a disadvantage against foreign transplants since it’s hampered by the UAW in its shop.

“People will start buying more Cruzes and they will start buying less Suburbans,” with higher gas taxes, says Akerson. But GM makes $8,000 per Chevy Suburban sold and only $1,500 per Chevy Cruze. Does an auto CEO really want to make less money?

One only need look at last month’s sales reports to see how misguided Akerson’s small-car strategy is. Skittish over a stalling economy and high oil prices, customers went — not to GM for small cars — but to Hyundai, which saw its sales explode by 20 percent because it can make small cars cheaper than UAW-burdened GM

“Quite simply Dan Akerson is the wrong guy, at the wrong time, at the wrong car company,” adds De Lorenzo. But Ol’ Loose Lips laid one more goose egg before the News interview was over.

“Now, we need practical decisions,” Akerson said, bumbling into the debate over raising the federal debt ceiling. “I think you need to cut the hell out of the budget and you’ve got to increase taxes . . . on everybody — including the middle class and the rich people.”

Increase gas taxes AND income taxes? Maybe Government Motors CEO is a springboard to a Democratic Senate seat.

New on Planet Gore. . .


COMMENTS   9

EXPAND  

DOOM161
   06/08/11 07:58

Someone needs to explain to them the inanity of raising the gas tax with the intent of forcing people to buy less gas. Their desire is to raise taxes in an effort to get less tax revenue.

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 RTP
   06/08/11 08:07

That is stunning.

Of course, losses have been socialized so perhaps he doesn't fear disaster as much as the next guy.

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   06/08/11 08:36

I suppose you should expect this from a temporary "appointee" suitable to the company's government owners. You don't get a car company executive, you get a former telecom executive/leech trying to be a member of the President's Council of Economic Followers. Nothing to do with his job, but it fattens his wallet and his liberal resume for future government and academic non-work.

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Ryan Aaron
   06/08/11 09:33

If their goal is people buying more fuel efficient cars(Not that I approve of the market distortion) then the answer would be to arrange to make THOSE cars cheaper, provide a credit on the purchase of them, etc to move them into more customer's price range rather than trying to move gas OUT of people's price range that won't be able to buy a new car anyhow.

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   06/08/11 10:05

Wait a minute, IIRC the rent seeking GE light bulb ban was signed by the compassionate conservative Bush in a spirit of bipartisanship. There's enough insanity around to blame on Obama and his rent seekers, but let's not forget that rent seeking insanity knows no political bounds.

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nmh
   06/08/11 11:28

Why is this shocking?

Akerson previously headed SBC, which operates in a heavily regulated environment, so of course he is comfortable with govt dictates, whether its gas taxes or 62 mpg cars, and trying to influence those dictates to disadvantage competitors and favor his company.

What's truly irritating is, Akerson by all accounts is a very wealthy man. Advocating higher taxes and actually being subject to higher taxes won't change that fact. He already 'earned' his. HIgher taxes punish w2 earners, not the truly wealthy. If i had $100 million in investments, higher taxes on my w2 income probably wouldn't bother me either.

Higher taxes prevent people from accumulating wealth, they don't directly or immediately impact those who have already accumulated wealth, like Gates, Buffet, the facebook kid etc.

I propose a confiscatory tax on accumulated wealth equal to 2% of the gross FMV of assets held (whether directly or in trust where the taxpayer is the beneficiary) to be applied annually against all taxpayers with more than $2 million in gross assets. Now this would truly 'punish' the wealthy and zap the Kennedys, the Gates, the Streisands, etc of the world.

I propose this tongue in cheek, knowing full well it would be damaging to the economy, but wouldn't it be fun to see all these limosine progressives squirm. Every year, Buffet would have to pay $520 million in taxes. I would love to see him respond to that.

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   06/08/11 11:57

I'll go @RTP one step further: it's not just that he doesn't mind losses, but perhaps he's actively angling for a full gov't takeover. A la Derb -- get a government job.

Boy, wouldn't CEO of GM be a cushy government job? Easy to do -- just drive the company into the ground and get taken over by your buddy the President.

Captcha: "take umbrage." I'm really beginning to enjoy the ironic captchas.

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 RTP
   06/08/11 12:40

Ryan Aaron,
You act as if gas prices effect industries and consumables other than personal transportation.

Where'd you get that crazy idea?

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D
   06/08/11 13:10

He just doesn't have the guts to say that the new fuel economy requirements are stupid. GM is going to have to spend major bucks to build cars that will meet those standards. But consumers aren't stupid. They aren't going to fork over an extra $3500 to save $1000 over the life of the car. They'll just buy more used cars or spend the money keeping their current cars running.

But (in his mind at least) if gas was really expensive, then that would justify the additional expense of his cars.

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