Detroit Bailout
One topic no one mentions in the Detroit Bailout controversy is all the offshoring that has been, and still continues, in the auto industry. GM just announced new plants in Brazil, Russia and India, coinciding with plant closings in America.
Guess where the bailout money will go?
General Motors to invest $1 bn in Brazil plant
Wed, Nov 19 11:49 AM
Sao Paulo, Nov 19 (IANS) US automobile giant General Motors (GM) plans to invest $1 billion in Brazil to avoid in their Latin American unit the kind of problems it is facing at home, EFE reported Wednesday.
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According to Jaime Ardila, chief of GM Brazil-Mercosur, the funding will come from the bailout package from the US government and will be used to 'complete the renovation of the line of products up to 2012'.
GM Opens $300 Million Russian Plant to Boost Sales
Nov. 7, 2008 (Bloomberg) -- General Motors Corp., the world's biggest carmaker, opened a $300 million factory in Russia as it looks to compensate for slumping sales in western Europe and North America.
GM opens second India plant
The Associated Press
Published: September 2, 2008........
GM's investment in India, which now tops US$1 billion, pales in comparison with that in China, where the company produces more than 1 million vehicles a year. GM has poured US$5 billion into its China operations and plans to invest US$1 billion a year going forward, company officials said.
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About 30 percent of the 9.5 million vehicles GM manufactures each year are made in Asia, a ratio Reilly said would likely jump to nearly 40 percent in the next five years.
GM's $3B Investment Will Muscle Up Chinese Manufacturing
Week of June 21, 2004
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No surprise, then, that GM, Ford Motor Co., Volkswagen and Toyota Motor Corp. in the past eight months alone have disclosed plans to invest some $10 billion in bulking up Chinese sales.
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Chinese Earnings Equal 54 Percent of GM's North American Profits
GM plant's closing like death knell in Dayton
Story Highlights
GM assembly plant closes for good two days before Christmas
Moraine, Ohio, plant's closing ripples through its supply chain
Many workers worry plant's closure will mean end of town
Worker: 'The American dream has backfired on everybody'
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Jobs lost in Dayton
A look at how GM's woes have cost jobs in the Dayton, Ohio, area:
• GM Moraine Assembly: 5,000 jobs lost
• Supplier Jamestown Moraine: 200 jobs lost
• Supplier Moraine L.O.C., 170 jobs lost
• Supplier Delphi, 3,000 jobs lost
• Supplier CEVA, 170 jobs lost
-- Source: IUE Local 755
Thank you, Congress. Another American city devastated.
This is a very good question
I've been wondering the same thing because while GM has lost $72 Billion since 2004, $42.5 Billion in 2007 alone.
What is not clear is the profits their subsidiaries are making in China and India and are those profits being reported in GM losses or what is going on here in terms of profits kept offshore for tax purposes or even possible one time write downs to again keep profits offshore.
I cannot find out any info on what exactly is being reported by GM, is that total global profits and if they go into Chapter 11, what that means from their global subsidiaries.
It sure appears to me at least to be a massive global mismanagement going on here and it sure as hell isn't the union's fault (UAW), as so many like to claim.
Matter of fact Economist Peter Morici really made me sick, testifying about how GM's labor costs are the problem. On what economic planet does that guy even live? What crap saying one must squeeze the US workers to make a company profitable. I didn't think he was neither right and the Senate assuredly should have had other economists testify on GM.
That's just ridiculous to blame the workers when GM is selling Aeros in China for $1100 dollars and building up billion dollar investments in India and elsewhere. What exactly are the current profit returns in those markets, like India, China, Brazil, Russia and are they counted in GM's reports or separate as part of some subsidiary or how this all works.
Then, they completely ignore the GMAC, but how is that affect GM's bottom line?
Here is GMAC now applying to be a holding bank in order to get some of the $700 Billion dollar bail out, same as American Express, credit cards and previously, investment houses did.
I believe GMAC had mortgages, way beyond auto finance.
This sounds very familiar
It sounds just like the first few minutes of 'Roger and Me'.
blog post or comment?
I'm assuming you mean the blog post because this isn't in reply to my comment but I'm personally torn on this.
I believe the reports that allowing the auto industry to go into bankruptcy will probably trigger a much worse recession and in the Midwest, possibly depression level unemployment.
But, ya, they have been squeezing workers, outsourcing jobs since the 1980's and while just this year they lost so much money yet building billion dollar plants around the globe...
well, if that doesn't say mismanagement I don't know what does.
There are also reports that they fired the American workers and kept the H-1B guest workers.
This is also true of the financial sector, thousands upon thousands of jobs have been offshore outsourced.
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