Monday, August 9, 2010

Conspiracy Time!!

As always I am a big fan of convoluted, ridiculous conspiracy theories...

This isn't to say that I believe the Moon landing was a hoax or that Elvis shot JFK, it just means that so many things in this world operate on a number of different levels with so many inputs of influence that it is easy to connect unconnected dots and draw conclusions...

Today's example?

How bout the fact that the reported turn around at GM and Chrysler is VASTLY over reported due to that fact that most, if not all, of their improvement in '10 has been driven exclusively by FLEET sales. As you can see in the Auto News article here, without Fleet sales GM would report a marginal decline in sales on a Year over Year basis through July '10 while Chrysler would report a decline in sales of 19%! That's quite different than their results as reported by the government and the government owned proxy GM/Chrysler PR departments who tout a 13% and 11% (respectively) increase in overall sales.

So, you have the two government owned/influenced auto companies grossly over inflating their sales figures with non-profitable Fleet sales, thus keeping union members employed and also resulting in overinflated employment and wage figures. Well, how would the government go about driving fleet sales? After all, the government could tell GM and Chrysler to produce as many cars as they want but if there is no one to buy them then they still won't be reflected in the overall sales numbers.

Well...take a look at of, if not the, leading rental car company. Despite mountains of debt and poor financials the are growing their fleet levels by leaps and bounds (check out the fleet debt on their mid-'10 balance sheet on their publicly available financials). Not only that, but despite their continued losses they have made an offer to go out and buy Dollar (with what money one has to ask), another leading rental company.

But Hertz is an independently owned, publicly traded company is it not? Well, yes and no...Yes it is publicly traded but who owns large controlling portions? Well, that would be what was Merril Lynch but is now Bank of America, who were recipients of oodles and oodles of taxpayer funds and who is under the heavy thumb of the government at all times. In combination with the Carlyle Group and Clayton, Dubilier & Rice, Inc. (two of the largest private equity firms in the world) BOA/Merril have a 51% controlling interest in Hertz.

So it all comes full circle...The government controls the rental car industry (I haven't even gotten into governmental connections to other rental car companies) forcing them to demand more domestic vehicles (funny how Ford, Toyota, Nissan etc. have not seen anywhere NEAR the increase in demand for Fleet vehicles that GM and Chrysler have, hmmm....) which drives sales figures at GM and Chrysler making them look far better off in the short run to the public than they really are and also placates the Unions, their employees, and key political allies in the rust belt while also making the current government appear as if it knows what it is doing economically.

Now all of the connections I state above are fact and not disputable. What is disputable is the scenario that I lay out which has them all working in concert together towards a single agenda. But really, is it that far fetched??

1 comment:

Brian Driggs said...

Whoa. No way. You learn something new every day. I can't say I suspect foul play, because that would imply the likes of GM having some sort of scheme and we all know they're the manufacturing equivalent to a monkey humping a football.

Still. Interesting food for thought.