Unveiling the Government Car Warranty
posted at 9:26 am on March 30, 2009 by Ed Morrissey
Good news, American auto owners! If you’ve been eyeballing a Lexus or a CRV because you want to own a car whose maker will be around long enough to honor the warranty, take another look at Detroit. Instead of handling their own warranties, Uncle Barack and his dog Spot will handle your warranty — along with a hefty new bureaucracy:
Obama will make two other announcements Monday.
One, the president will announce a new government-backed warranty program for all new GM and Chrysler vehicles purchased during this restructuring period. A fund will be set up equal to 125 percent of the total cost to pay for warranty service. The auto makers will contribute 15 percent while the government will provide 110 percent, with the money coming from the economic stabilization funds, the gift that keeps on giving. A separate company will hold the funds and pay the claims even if one of the auto manufacturers goes into bankruptcy or out of business.
The president will also name a Director of Recovery for Auto Workers and Communities. Edward Montgomery, labor economist and former Deputy Secretary of Labor, will serve in the role, helping autoworkers, communities, and regions adversely impacted by the failure of the automakers find new jobs, businesses, and industries.
This is great news — for fans of the DMV. Vehicle owners can expect the same kind of efficiency and expertise they receive there in handling warranty issues with their vehicles. Instead of working with dealers on the warranties, the government will now have to get involved, which will mean extensive paperwork for every warranty claim as the Directorate of Auto Warranties will have to account for every single penny, or at least those pennies that don’t get earmarked for Auto Warranty Bike Paths by Rep. Jim Oberstar.
And let’s not forget what this will do for Detroit’s competitiveness. Now that warranties will get funded by Uncle Sam, what do you suppose will happen to them? They’ll get shortened, and if they become uncompetitive, it will literally take an act of Congress to get longer warranties offered by Detroit. But that’s not what will really happen. If the Directorate of Auto Warranties discovers that the competition offers longer and more robust warranties, the Directorate will simply get Congress to pass laws outlawing them. After all, we can’t have a bunch of furriners undercutting Uncle Sam, can we? Why, that would be downright unpatriotic!
Government does not belong in the business of offering auto warranties. Two years ago, that would have been so obvious as to elicit derisive laughter for even mentioning it. But when we get a bunch of used-car salesmen in the White House and Congress, this is the result.
Blowback
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Cons checklist.
CEO victim, check.
Blame the President, check.
Blame the workers, check,
Don’t buy American, check.
And you wonder why you keep losing elections, check.
getalife on March 30, 2009 at 10:18 AM
Since the feds will be handling warranty obligations, how long will it be before consumer warranty rights are “means-tested”, i.e., those who are prosperous enough to pay for their own repairs won’t be entitled to repairs under warranty.
I can already imagine the congressional hearings where Maxine Waters excoriates the rich guy who demanded warranty repairs for a defect in his new Cadillac. The ACORN-ANSWER mob-rule bus tour will place his house on its itinerary, and 0bama will be shocked, SHOCKED that warranty repairs are being provided to people who can pay for their own service.
Cicero43 on March 30, 2009 at 10:18 AM
The death of GM will be slowed, but with the help of Obama the Undertaker it will still be coming.
Question: Will Obama admit that during his watch he killed off the (former) biggest car maker in the world or will he blame it on George Bush?
albill on March 30, 2009 at 10:23 AM
liberals tossing the US under the bus in order to win elections… check
gatorboy on March 30, 2009 at 10:23 AM
True for my Fords, too. Last warranty claim was in 1985 (clutch failed on Mustang GT — which just might not have been the car’s fault, come to think of it ;o) ). Other than that clutch, the only repair any has needed before being sold after at least 80,000 miles was a leaky vacuum line (replacement cost ~ $1.50) on a Ranger about five years back.
These days just about any car is a good one if it’s properly maintained.
RegularJoe on March 30, 2009 at 10:24 AM
If they’re going to do this for GM and Chrysler, they ought to do it for Ford, Mazda, and Toyota too (in fact, any car manufactured in America).
One more reason never to buy another GM or Chrysler car. I was planning on replacing my 1998 Grand Caravan with another (it is a really nice car), but I think I’ll pass.
I don’t view either company as American any more — I view them as Communist.
unclesmrgol on March 30, 2009 at 10:24 AM
look at the stock market. check!
recession over. check!
buy, buy, buy. check!
Oops!
wasteoflife
mossberg500 on March 30, 2009 at 10:25 AM
GM was just handed the kiss of death…
Jed1899 on March 30, 2009 at 10:26 AM
We have a very good idea on why we lost this particular election, and our feelings are certainly being borne out by events.
Obama Franks Waters LLC
unclesmrgol on March 30, 2009 at 10:26 AM
Nice Cal Worthington reference there Ed. But still, Obama isn’t selling, he’s buying (buying power and control with our tax dollars), and why? Because we’re panicky and he’s not. (If that sounds a little like a line from It’s a Wonderful Life, it is, only Potter’s tyranny was limited to one little town, Obama’s is all of Western capitalism).
Really though, if the President can personally fire a CEO of a private business because the unions can’t deal with him, then what’s the real difference between Obama and Hugo Chavez? Nothing substantive from what I see.
JonPrichard on March 30, 2009 at 10:26 AM
Right…I thought the recession was over last week. The messiah had solved all our problems.
What happened?
becki51758 on March 30, 2009 at 10:27 AM
Sigh.
1) Either this nightmare ends in Armageddon or
2) call me when it’s time to tar, feather and run them out on a sail to Aleutian Islands (Our Siberia).
Seriously, the worse these libtard clowns get their way, the worse the blowback when it comes. I certainly won’t cry for them when it hits one way or another.
So what are the odds that Dow drop to new lows not seen in decades?
AH_C on March 30, 2009 at 10:28 AM
So, is GM stock now a Toxic asset? So can we use Tarp and Gov money to take it off peoples hands ala Geithners plan?
Romeo13 on March 30, 2009 at 10:29 AM
Once again, you are in the enviable position of not needing to comprehend what you’ve written.
lorien1973 on March 30, 2009 at 10:31 AM
moveon.org paid troll commenting on conservative blog – check
Ann NY on March 30, 2009 at 10:32 AM
Wait… GUBMINT warranties? BWWWWAAAAAHAHAHAHAHAHAH!!!
Yeah, that’s like that “military intelligence” thing, right?
Funny that the public sector has had a solution to this non-problem for decades, called after-market warranties. That involved paying a 3rd party for what amounts to be an insurance policy for vehicle malfunctions.
So, instead of paying a private 3rd party business 100% of the cost for this coverage, we’ll pay the Gubmint 110% of the cost out of tax dollars.
I refuse to pay for the following reasons:
1. I was smart enough not to buy a POS from Detroit. My car runs perfectly and I have zero problems, therefore there is no benefit to me.
2. I see no reason nor Constitutional justification for why the Gubmint should compel me to pay for everyone else’s warranty who wishes to buy POS cars out of a distorted sense of social responsibility.
3. My unwilling purchase of a warranty that is explicitly designed in a manner that I will gain no benefit is not only ridiculous, but it only serves to promote the continued sale of inferior products for unreasonable sums of money and prop up a companies for producing crap products and not backing them up.
This spells it out plainly. GM and Chrysler produce crap products that have no competitive market value in comparison to superior, competitive products. They have failed to improve their products for decades and failed to keep their costs in line (partially due to labor unions demanding exhorbitant and increasing pay and benefits for employees from hire to grave while producing less). They have proven to be unsustainable and must be allowed to fail.
Two words: Atlas Shrugged
Damiano on March 30, 2009 at 10:34 AM
Market’s down 261 so far.
CP on March 30, 2009 at 10:35 AM
Ok…. intresting question…
Anyone look up the Campaign contributions for GM/Chrysler vs Ford?
Bet it would be… enlightening…
Romeo13 on March 30, 2009 at 10:41 AM
Why can’t they wait for my wire transfer to take place until they start this crap and drive the dollar down even further?
amkun on March 30, 2009 at 10:42 AM
I really didn’t need to wake up and read this story. Sometime during the night Rod Serling was frakking with my universe.
What is next? Uncle Sugar coupon supplements in the Sunday newspaper?
Limerick on March 30, 2009 at 10:42 AM
Exactly.
zeebeach on March 30, 2009 at 10:45 AM
I have owned both foreign and domestic cars, and the American cars did not come close to matching my Toyota and even Nissan. When I was young(er), I thought I would always buy American cars; then I actually started driving. I’ll stick with Toyota for now, and definitely never buy a GM car (although I doubt they may be around by the time comes to get a new one).
bookman on March 30, 2009 at 10:47 AM
General Motors becomes Goverment Motors. How long before the goverment starts implimenting restriction on other car companies that dont take goverment money in order to prop up Goverment Motors? Oh wait …
Badbrucskie on March 30, 2009 at 10:49 AM
Madness. It is obvious that this government cannot pay for all these programs. Not this government, the next, or the next X10. There can be only one result of all this voodoo arithmatic (it ain’t math, that’s for sure).
Mars is looking pretty good right now.
Limerick on March 30, 2009 at 10:49 AM
I am furious about this. First I have to pay for everyone else’s mortgage, now I have to pay for their car to be repaired?
Hell no.
Damiano on March 30, 2009 at 10:50 AM
Auto mechanics must be rubbing their hands.
Remember the $600 dollar toilet seats for the US Navy? Well prepare for the $600 spark plug.
EnglishMike on March 30, 2009 at 10:58 AM
“To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and he abhors, is sinful and tyrannical.” –Thomas Jefferson
becki51758 on March 30, 2009 at 11:00 AM
I know Rush likes GM cars; they always seem to be giving him cars to test drive. I wonder if this will affect that arrangement? It will be interesting to hear what he has to say about this.
bookman on March 30, 2009 at 11:03 AM
Looking forward to Iowahawk’s take on this.
a capella on March 30, 2009 at 11:08 AM
Don’t forget Hannity. For some reason he’s got no problem w/ General Motors.
It’d be odd to see them sponsored by the Japanese government-backed brands of the South.
sethstorm on March 30, 2009 at 11:13 AM
That leaves more GM cars for us fans to buy.
sethstorm on March 30, 2009 at 11:14 AM
Jesus H! Taxpayer-funded car warranties?! You’ve gotta be kidding me! Where the hell is all this money coming from?
I’m officially on board with those who theorize that Obama is doing all of this on purpose. There’s no way he’s THIS stupid. He wants to burn this country to the ground(only figuratively, I hope) and rebuild it as a socialist nation.
Doughboy on March 30, 2009 at 11:16 AM
Also acceptable, but longer is “How not to thwart evasion”.
sethstorm on March 30, 2009 at 11:19 AM
Then the right just wants to bury the Manufacturing Belt in the same way and rebuild them as perfect union-busting states.
sethstorm on March 30, 2009 at 11:20 AM
Directory of Recovery.
Sounds like the Repo Man got a new name.
unclesmrgol on March 30, 2009 at 11:24 AM
Someone just returned from his or her morning classes.
BuckeyeSam on March 30, 2009 at 11:25 AM
TOTUS is alive and well, stretched out in the back of his own personal Cadillac Escalade.
unclesmrgol on March 30, 2009 at 11:26 AM
Great idea! Thanks for mentioning it. We’ll get on it right away.
unclesmrgol on March 30, 2009 at 11:27 AM
They’ve been available for quite a while.
It’s those who want Fords who apparently have to stand in line. But I’m sure Hugo will fix that.
unclesmrgol on March 30, 2009 at 11:30 AM
One word … Communism.
The gap that separates Hugo Chavez and Barack Obama gets smaller every passing minute.
I predict HUGE gains for Republicans in 2010.
HondaV65 on March 30, 2009 at 11:32 AM
I agree. Frankly, any organization or any person who needs help from Obama is, by definition, a failure–so why give that organization or that person the time of day?
BuckeyeSam on March 30, 2009 at 11:32 AM
While I could use a new car I will never ever buy a car that is in cahoots with the goverenment. I don’t care if they said that they would fix it for the life of the car for free. My values are more important that a car.
MTZinIL on March 30, 2009 at 11:37 AM
Could be interesting from a products liability point of view. If there is any lawsuit involving a defective GM car, would the plaintiff’s lawyer sue the US, too? (Would be biting the hand that feeds them, given how much the plaintiffs’ bar gives to Dems).
Wethal on March 30, 2009 at 11:38 AM
Every move being made by the -0- administration essentially has one thing in mind: to lock in future democrat votes.
I’d like to be a fly on the wall at UAW headquarters right now: they must be whooping it over this Wagoner firing. The patients have just taken over the insane asylum!
Sweet_Thang on March 30, 2009 at 11:39 AM
This is BS, auto makers that go out of business must continue to provide parts for 6-8 years past their death. There is no reason why the government should offer anything.
smfoushee on March 30, 2009 at 11:41 AM
Buh bye GM. It’s one way to get rid of union made junk. Open the hood on a 2009 GM car, all you see is electrical taped wire bundles … It appears to be taped together. You can build Volgas, but can you sell Volgas.
Did anyone think the union fantasy was a sustainable business?
We recenlty looked at a Chevrolet. The wife said afterwards, did it actully look like it was designed or just pieces stuffed together? I said stuffed.
Nor will I ever buy from a government owned car company … Who needs electric powered coffins. Maybe the liberals will buy them — HeHeHe.
tarpon on March 30, 2009 at 11:43 AM
Cuz god knows you could not like both.
Boy Seth…you are dim.
Jamson64 on March 30, 2009 at 11:45 AM
So when our cars have problems, I think we should all call the WH to schedule our service appointments.
Rae on March 30, 2009 at 11:46 AM
Are you going to tell me how much you get paid to shill or not?
Jamson64 on March 30, 2009 at 11:46 AM
Seth-
My past post noted:
Cuz god knows you could not like both.
That was sarcasm. I know how slow you are and wanted to make sure you knew.
Jamson64 on March 30, 2009 at 11:48 AM
Buying GM now would show support for socialism. I guess I will purchase my first foreign made vehicle finally.
Rockshine on March 30, 2009 at 11:55 AM
I was under the impression that car warranties were held by 3rd party companies. At least that’s what we’ve been told for several months as car compaies tried to reassure the American public into purchasing cars from them. If so, did Obama not get that memo? Why are we backing up something that was never at risk? Oops, forgot – must not question The Obama.
Also, wonder which Obama campaign contributor will get the new CEO job…
Russell28 on March 30, 2009 at 11:57 AM
Well come on down!
We have a brand new, never driven, 1965 Cadillac Fleetwood.
505cu in engine, enough leg room in the back for half the Cowboys cheerleaders, and financing is gar-an-teeeeeed! Bankruptcy, no problem. Live in a shopping cart, no problem.
This car is 100% gar-an-teeeeed by Uncle Sugar and you can take that straight to the bank!
Who do you trust?
Barry Motors, 1900 Pennsylvania Ave, just two blocks from that big skinny pointy building in beautiful downtown DC.
See ya there!
Limerick on March 30, 2009 at 11:59 AM
Remember, if the Government is backing the warranties, they are also now in charge of producing the cars. That means you are guaranteed to need the warranty.
EconomicNeocon on March 30, 2009 at 12:00 PM
One thread that started last evening and went well into this morning had many requesting a ban for getalife due to chronic attempts at deflecting topics.
I’m waiting to see if somebody is going to start a petition.
Remember, getalife is actually just a GTOIC (Getalife’s Teleprompter Of Inane Comments) with a standin GTOIN (Getalife’s Teleprompter Of Inane Natterings).
Yoop on March 30, 2009 at 12:03 PM
I own two F-bodies and seeing this done to GM is really hard to take, but on an up note it sure looks like the stock market loves the new auto industry plan.
DFCtomm on March 30, 2009 at 12:05 PM
Nobody noticing the obvious?
This program gives GM and Crysler huge incentives to make cars that look good, but fail frequently due to low quality (low cost) parts.
Paul Murphy on March 30, 2009 at 12:09 PM
MSNBC headline on this story:
Obama unveils ‘lean and mean’ auto plan.
Should read
Obama spouts ‘obscene’ auto plan.
Limerick on March 30, 2009 at 12:09 PM
President Obama actions with GM means HE is assuming control of the company and therefore will be 100% responsible for it’s failure or success. Based on that look at him bailing them out in 2 months because otherwise it would be his failure.
JeffinSac on March 30, 2009 at 12:10 PM
This is one way to squelch conservative talk radio: nationalize all their sponsors. Problem solved.
Sweet_Thang on March 30, 2009 at 12:13 PM
Above and beyond the Soviet styled bureaucracy that our President, America’s CEO, is setting up (replete with Orwellian names), is this even constitutional?
Giving consumers incentives to buy specific brands like GM & Chrysler, over, say, Ford, Toyota, or Honda? Isn’t this a form of protectionism?
Buy Danish on March 30, 2009 at 12:21 PM
In the Soviet military every unit, company size or larger, had a political officer. Looks like every boardroom in America is going to have one too.
Limerick on March 30, 2009 at 12:25 PM
That’s the interesting thing. I don’t believe the government got any stock when they did the bailout, so it will be the board that hires the new CEO. Business types seem to be getting a little spooked by the administration these days, so it will be interesting to see what happens if they hire someone the administration doesn’t approve.
DFCtomm on March 30, 2009 at 12:34 PM
Bob Corker of Tennessee responds. An excerpt:
Buy Danish on March 30, 2009 at 12:34 PM
You have to feel bad for them for having an IQ that functions in the minus zone.
N4646W on March 30, 2009 at 12:40 PM
The reason why the federal government is offering to back GM and/or Chrysler warranties is that it’s part of the bankruptcy process itself.
More here:
Administration on GM, Chrysler
starfleet_dude on March 30, 2009 at 12:41 PM
Good analysis, Cicero.
Alana on March 30, 2009 at 12:44 PM
What does it say about how they rate us that they only send us the b-stringer troll? Or is that the general level of talent over in the war rooms?
Ann NY on March 30, 2009 at 12:47 PM
Barack Obama is now Mr. Goodwrench.
MB4 on March 30, 2009 at 12:50 PM
Fiat and Chrysler have announced a merger:
Free pizza for a year with every purchase!
starfleet_dude on March 30, 2009 at 12:50 PM
getalife is Mr. Monkeywrench of Mr. MonkeyPoo, I suppose.
MB4 on March 30, 2009 at 12:51 PM
The best thing since Fiat incorporated Microsoft into it’s computer system!
Ann NY on March 30, 2009 at 12:54 PM
Better include home deliver as those vehicles will probably be at the mechanics shop much of the time.
MB4 on March 30, 2009 at 12:54 PM
My brother-in-law owned a Fiat back in the late 1970s that ran well enough, and the hole in the floor right in front of the driver’s seat provided extra ventilation! Honda’s also had problems with rusting out back then too as I recall.
starfleet_dude on March 30, 2009 at 12:58 PM
She’s here to complete her basic training. Permanent posting to a Conservative blog comes after graduation.
If she re-ups she’ll get a GMC all-electric-motorized shopping cart as a bonus.
Yoop on March 30, 2009 at 12:59 PM
I’m not sure where you got that impression from, but it is patently false. New Car Warranties are backed by the manufacturer, not by a third party. Extended warranties, or used car warranties are often third party (though not always, e.g. Certified Used Cars).
Not a big fan of Obama, to say the least, but I take the contrarian view, and think this is actually the first good idea he’s come up with.
For months I’ve heard bloggers, pundits and message board types put forward the idea that bankruptcy is the best course for GM.
Coincidentally I’ve noticed that most of these same people have an amazingly visceral hatred of GM (for reasons I don’t always understand), and ignore the fact that buying a $20K – $40K depreciating asset from a bankrupt company, an asset that you are dependent on to get to work, school, medical trips etc. with no guarantee of a warranty if the company goes under, is a quite different than buying a $400 TV from a retailer in bankruptcy.
Yes, there are certainly pitfalls with having the government running a warranty operation. But for a prospective buyer it is better than no warranty at all, and makes bankruptcy a viable option for GM.
Dreadnought on March 30, 2009 at 12:59 PM
We know it’s a she? The childlike prose style does make me think you’re right about that; and that she is a very young girl, but I can also picture an adolescent boy as well.
Ann NY on March 30, 2009 at 1:02 PM
I don’t know, nor much care, but it would have been the best course for America,
You never had my 68 Camero, the super lemon from the deepest pits of Hell.
MB4 on March 30, 2009 at 1:07 PM
This entire issue is absurd. Drop CAFE and allow the big 3 to sell the cars they make money on and this goes away at no cost to the taxpayers.
echosyst on March 30, 2009 at 1:13 PM
Don’t worry, be happy. Big brother will look after you.
davod on March 30, 2009 at 1:15 PM
What in the sam hell is happening in this country??? You can’t fix everything with money thrown at it. Where in the hell is all this money coming from??? How can he say he is reducing the deficit and then spend like a drunken sailor?
I am so sick of this, I have never protested anything by picketing in my life, but I will now.
Every morning I wake up and more of our money is being spent by this government for no return on investment. It is like he just signs bills, spends money, and then leaves it to the “little” people to determine how to pay for it and implement it…
momof2 on March 30, 2009 at 1:15 PM
Did you bother to read the plan?
The Gov is picking up 110% of warranty cost…
Yep, more than it would normaly cost.
Your tax dollar will go to pay for the warranties for people who buy a new car, that they probably should not buy in the first place.
Good idea? So you are in favor of wealth redistribution done by an Unconstituional means? (Congress is not involved in this apparently).
Romeo13 on March 30, 2009 at 1:16 PM
Dear GM workers:
Congratulations to you and your union on your newfound government-controlled company. It’s always good to know one’s master, so you can all probably sleep like babies tonight.
As for me — and, more importantly, pretty much every friend and family member I know — the chances of any of us purchasing a GM (or Chrysler) vehicle are less than zero.
I’m quite confident we are not an anomaly.
Have a day.
Dion
Dion on March 30, 2009 at 1:17 PM
*head explodey.*
In other news, as much as I like this car, it seems to add more fuel to the ‘out-of-touch’ argument..
Of course I still want them to build it, dammit. But then I don’t have to worry about buying one since I can’t afford it in the first place..
Reaps on March 30, 2009 at 1:22 PM
Obama appears to be trying to Resurrect every failed policy of the twentieth century.
.
BIDEN NOW! Honest stupidity for America’s future.
darktood on March 30, 2009 at 1:23 PM
Very nice of my Senator to submit a thought that makes sense…but it still doesn’t get you off the hook for voting to approve Geithner.
ladyingray on March 30, 2009 at 1:27 PM
The employees are Americans. Those are American jobs. Who cares who owns the company? Lots of foreign companies have plants in America, which create American jobs.
I want to scream that at Hannity everytime he goes on about “buying American to save American jobs”.
I did just that when I bought my Nissan truck; it was made in Smyrna, TN.
ladyingray on March 30, 2009 at 1:33 PM
GetAClue:
Captain Ogabe’s croc clock is closing….
*tick-Tock*
sven10077 on March 30, 2009 at 1:33 PM
Ed,
Comparing Barry to Cal Worthington?
Dude! (Exit: Is he riding Orky or Corky at Marineland?)
Christien on March 30, 2009 at 1:34 PM
So in addition to signs saying “Pay your own dammed mortgage”, we can add “buy your own dammed car warrantee”
Georgfelis on March 30, 2009 at 1:46 PM
Forget the government warranty. You’d do better going with a Trunk Monkey.
Christien on March 30, 2009 at 1:55 PM
Is this for real…I couldn’t write a book with this.
Hey, Obama…your 90 day warranty is about to expire…time to replace you with a working model.
right2bright on March 30, 2009 at 2:07 PM
And he may end up like “Cal”…didn’t Cal serve some time for fraud?
right2bright on March 30, 2009 at 2:09 PM
you can believe that when Ogabe says “painful concessions” he is not talking about the UAW giving anything back….
stock has fallen to 2.75 a share….
“change”…
sven10077 on March 30, 2009 at 2:09 PM
Ummm… Two questions:
1) How exactly will Gov’t-mandated recalls work under this new regime?
2) In a country where “equal protection” arguments have run rampant, how is it that the Feds can guarantee warranties for only some and not for all?
I hereby dub the new organization: Warranty Holding Assurance Combine, or WHAC.
fyzycyst on March 30, 2009 at 2:13 PM
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