Quote Originally Posted by 313WX View Post
.......Demand creates jobs, no other way around it.
Depends on who is making the "demand". Instead of getting all tingly about the rosy predictions coming from CAR, let's look at the present, shall we?

General Motors trumpeted that its sales in November 2011 were up 7% over the same period in 2010. Buried in that same press release was the fact that GM dealer inventories were up 16% compared to a year ago, totaling 623,666 vehicles [chart]. GM dealer inventories are now at an all-time high and evidence that General Motors is back to their pre-bankruptcy practice of "channel stuffing".

Who benefits from "channel stuffing"?

Certainly General Motors benefits, since they can claim vehicles as "sold" units as soon as the dealers take delivery, not the final customer. The US Government tracks manufacturing output statistics based on when General Motors sells its products, not the dealers. Boost manufacturing output and you boost the economic stats coming out of Washington DC, regardless of whether actual consumer demand is in synch.

Certainly the UAW benefits, since they get paid to make vehicles regardless of when those vehicles are sold and how much they are sold for.

However, this practice is not a benefit to GM dealers, who have to borrow the money to carry that inventory. 75% of GM dealers "floor plan" their inventory by borrowing from Ally Financial [[formerly GMAC), which thanks to TARP is majority-owned by the US Treasury Department [[with GM holding a minority stake). Together, GM and Ally still have about $42 billion worth of outstanding TARP loans that have yet to be repaid [Oct. 2011 SIGTARP Report to Congress].

With General Motors' stock price dropping below the $25 per share range, the US Treasury Dept. recently increased to $23.8 billion its anticipated loss on General Motors' TARP loans.

Gee, you don't think that the US Government might be the "demand" behind GM's post-bankruptcy "channel stuffing", do you?