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Analyst's note:  I noted the DNC convention touted heavily how the man who now calls himself Obama saved GM with the bailout ... funded by U.S. taxpayers.  So I began looking around just to see what I could find. I found an interesting discussion about June 2012 auto sales that I have provided here in this posting.  I was able to confirm once again that the American citizen should never trust a "progressive" (socialist/Marxist) to tell you the truth.  Remember our national security depends heavily on our economic security and obviously someone is 'fudging the numbers.'  Who knows when Americans will learn the truth about the most current numbers.

While I was doing this a friend must have had the same idea and provided me with the following:

We live near the small village of Bath, NY. which is the home to one of the largest
auto dealerships in the United States. They can't buy property fast enough to display
their ever expanding parking lots for their thousands of vehicles. They have similar
dealerships scattered around New York State.
Remember the cash for clunkers fiasco,
where the Obama administration selectively closed down hundreds of auto dealerships
with conservative ownership. It makes one wonder what Obama's game plan was for
those liberal dealerships who profited from those closures. Was there, is there a payback?
Are their auto display lots too, overloaded with GM vehicles?
.
I don't believe any dealership could maintain such massive inventories without
the backing of some bottomless source of unlimited funds.
Maybe this is where
a really big chunk of our taxpayer stimulus money has mysteriously disappeared to.
They cannot, or will not account for the dispersal of the nearly one trillion dollars of
stimulus money.

Obama and the Democratic Convention made a really big deal about the fact
that Obama "saved the auto industry". It looks like the bottomless pit of endless
funds backing GM may be us.

***************************************************************

Chevy Volt production has also been (temporarily) halted – purchases have been dismal and sales mostly to the Federal Government.

 

===============================================================================================

"It looks like General Motors will be throwing everything in but the kitchen sink to help fluff its second quarter earnings numbers. Taxpayers continue to help with the cause as President Obama campaigns on the "success" of GM following the manipulated bankruptcy process that cost taxpayers $50 billion and another $45 billion of tax credits gifted to GM to help protect powerful UAW interests. We now learn that government purchases of GM vehicles rose a whopping 79% in June.

The discovery of the pick-up in government fleet purchases at the taxpayers' expense comes just weeks before GM announces its second quarter earnings. Overall fleet sales (which are typically less profitable than retail sales) at Government Motors rose a full 36% for the month, helping to drive decent sales improvements year over year.

GM claimed that sales increases did not rely on incentive spending, which appeared to remain in check, but one analyst during GM's sales conference call questioned whether the company's "stair step" incentive spending was accurately depicted. This incentive spending kicks in after dealerships report final sales figures for the month and may be yet another deceptive way for GM to fudge its numbers. Not mentioned was GM card rewards programs that do not get counted as incentive spending.

The government's increased spending on GM vehicle purchases presents yet another conflict of interest as Treasury refuses to sell taxpayers' stake in GM and Obama campaigns on the auto bailouts. It does not appear that any members of Congress (from either party) are questioning the increased spending. Also ignored was the Department of Energy's gifting of $2.7 million of taxpayer money to GM to reduce energy consumption in its door manufacturing process by 50%. The DOE seems to be one of the main conduits to funnel taxpayer funds to cronies of the Administration. The $2.7 million contribution to GM comes after additional millions of dollars were spent by the DOE on advisory fees paid to legal firms that helped smooth the way for the GM bankruptcy process (as reported here); another move that went unquestioned.

The upcoming earnings announcement by GM is, politically, the most important to date. The pressure is on Government Motors to appear financially strong as this may be the last earnings report before November elections and sets the stage for how "successful" GM is. One of GM's past tricks to help fudge earnings numbers has been to stuff truck inventory channels. Old habits die hard at GM. According to a Bloomberg report, "GM said inventory of its full-size pickups, which will be refreshed next year, climbed to 238,194 at the end of June, a 135 days supply, up from 116 days at the end of May." 135 days supply is huge, the accepted norm is a 60 day supply. The trick here is that GM records revenue when vehicles go into dealership inventories, not when actually sold to consumers.

The article goes on to quote Kelley Blue Book's Alec Gutierrez who stated "They're (GM) likely going to have a relatively high days supply of trucks moving forward and they're already placing some pretty aggressive cash incentives on the hood. It's going to eat into their profit margins..."

GM's earnings announcement comes on August 2nd. The main head winds will be weak European operations and growing pension liabilities. The headline number for earnings should be viewed skeptically and an eye kept on the share price reaction after the conference call. Expect Government Motors to put a positive spin on its financial health as the stakes are now at their highest. The long-term health of GM remains in question and the true financial picture may not surface until well after voters decide who will be running our country. Eventually we will see just how successful GM really is.

Mark Modica is an NLPC Associate Fellow.  

Update: GM sales spokesman, Jim Cain, points out that total government sales for GM in June were still below 5% of total sales and majority of government sales increases were attributed to state and local governments."

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