This is bad folks. Bloomberg:
General Motors Corp. said it needs as much as $16.6 billion in new U.S. loans, more than doubling the aid to date, and must get some of the cash next month to survive. GM plans 47,000 more job cuts worldwide this year.
Chrysler LLC, propped up like GM with federal assistance, said it’s seeking $5 billion more from the government and will shed 3,000 more positions.
GM says 47,000 jobs will be lost world wide. GM is selling Hummer, shutting down Saturn, bankrupting Saab (which Sweden is going to salvage and return to it's nation), and shutting down 5 additional U.S. plants. It is completely not stated which countries and plants will lose which jobs. It looks bad that most of the losses will be against U.S. workers and other nations where they pay living wages.
Huffington Post is claiming 10,000 salaried workers and 37,000 blue collar workers will lose their jobs.
GM has issued a press release with their 117 page plan.
It's clear they are going after U.S. workers, Canadian and European workers and simply slowing down their offshore outsourcing operations in Asia and they mention nothing about Brazil. It's clear they are not shutting down the India plant, no mention of expanded R&D in China and scuttling that, some mention of two plants in Thailand not be feasible and a strong focus on every single country which pays it's workers a living wage.
From the 117 page plan it's quite clear GM is not laying off foreign operations first, nor is it clear, U.S. taxpayers will be footing the bill for those overseas operations.
GM states the terms of the Federal loans:
Foreign Government Support—Terms and conditions of the U.S. Federal loans essentially limit the Company‘s ability to manage cash on a global basis, which has been its historic operating model. As a result, any foreign operations of the Company that are significant net users of cash during the Plan timeframe need to restructure and/or obtain support from their host
governments. Many such initiatives are under way, assumed to yield $6 billion by 2010. However, there can be no assurances that this funding will be provided by these foreign governments.
I do hope this is true, that U.S. taxpayer money is not assisting GM to labor arbitrage and ramp up their overseas operations.
GM also notes on p. 89 in their summary:
Total funding requirements of $28.5B in 2011 including incremental funding for foreign operations (I5)
Foreign operations are working to obtain funding locally
The UAW is not releasing the terms.
I have a fundamental question at this point, which is what happens if the United States nationalizes GM? Throw the bums out, grab their assets and build a true American car company.
It's so clear they have made major management mistakes in addition to the United States simply not being globally competitive due to the continual attack on social security and attempts to get a non-profit universal health care system. Yet they seem to also be trying to labor arbitrage in every first world nation which provides these things to it's labor force.
It seems to me they need a hell of a lot more restructuring on their entire global business model and here in lies the confict: to bail them out. GM would be getting U.S. taxpayer funds....so shouldn't we be demanding in return a complete refocus to build up U.S. manufacturing for this investment?
Just a thought for clearly while the trouble is in huge part due to our Ponzi scheme financial sector and the collapse of the middle class, it sure seems like GM is hell bent on labor arbitrage as a business model to reduce costs instead of completely revamping it's global supply chain and cutting costs overseas.
Tell me I am wrong in the comments but please post details as to why.