GM offshore outsourcing U.S. jobs
Glad you supported GM getting U.S. taxpayer dollars? Want to see GM survive, prattling on how America needs an auto industry?
Instead we get this, GM plans to shift overseas production:
General Motors Corp. will shift more production of vehicles bound for the U.S. market to China, Mexico, South Korea and Japan, but will keep total imports at roughly one-third of all sales here.
In a confidential 12-page presentation to members of Congress, obtained by The Detroit News on Friday, GM said it will boost U.S. sales of vehicles built in those four countries by 98 percent -- or about 365,000 vehicles -- while shrinking production in Canada, Australia and European countries by about 130,000 vehicles.
GM also disclosed it will start importing vehicles made in China in 2011, reaching 51,546 vehicles in 2014. Imports from South Korea to the United States will jump from 36,967 vehicles in 2010 to 157,126 in 2014.
The automaker said it is canceling expansion projects in Russia, India and Mexico.
GM's plan to import more vehicles from low-wage countries raises questions about whether it should beef up its foreign operations as it is relying on federal money to stay afloat. It also puts the automaker at odds with the United Auto Workers, which is trying to protect U.S. jobs amid a dramatic restructuring of the domestic auto industry.
GM has faced strong protests from the union that its turnaround plan unfairly targets U.S. workers and plants for cuts. GM plans to trim 21,000 hourly workers and close 13 of its 47 U.S. plants by the end of 2010 as part of a tougher recovery plan sought by President Obama's auto task force. It will close three more U.S. plants by 2014.
UAW legislative director Alan Reuther wrote a letter to Congress:
Unfortunately, the latest restructuring plan put forward by the company calls for the closing of 16 manufacturing facilities in this country, including four assembly plants. This will result in the direct loss of 21,000 jobs.
The ripple effect at suppliers, dealers, and other businesses will cost tens of thousands of additional jobs, devastating numerous communities across the United States.
Incredibly, between 2010-2014 GM's restructuring plan also calls for a 98% increase in the number of vehicles it will be importing into the United States from Mexico, Korea, Japan and China, with the number of imports from these countries increasing from 371,547 to 736,743. As a result, the share of GM’s sales in the U.S. market that will be imported from these countries will increase from 15.5% to 23.5%. The overall number of vehicles GM will be importing in 2014 represents the production of four assembly plants, the same number that GM plans to close in the United States.
Who else says fuck 'em? Let them be liquidated in bankruptcy, save the UAW pensions and health care and let's be done with this Benedict Arnold corporation. Why are we pouring U.S. taxpayer money into some labor arbitraging behemoth? Let's just kill this globalization that just bit them but they want to do it again monstrosity and start over.
Here's William Greider at The Nation:
So this is how the auto bailout will work. American taxpayers pump tens of billions into rescuing General Motors from bankruptcy. Then GM pays us back by shipping more jobs overseas--the equivalent of four assembly plants. The federal money will directly subsidize more imports from abroad, enabling GM to double its car production in Mexico, South Korea and China and selling the cars into the US market.
Can someone explain how this is in our national interest? If that is the best deal Obama's auto czars can come up with, then this angry taxpayer says: laissez-faire--let GM go down. Better to settle for bankruptcy court than provide public financing to further the destruction of US manufacturing.
Oh yeah, GM's claim they are not using taxpayer funds is pure bullshit. Without those funds they would already be in bankruptcy. There are previous reports of GM using our taxpayer dollars for operations in Brazil.
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It is what the Obama administration wants it.
They were told to get competitive, not that they needed the push. Until somebody renegotiates trade and passes single payer, how else could they do it?
MI knows that Obama plans to save the car companies, just not the people or the jobs in the state. WE get facilitated access to welfare. They aren't even making any bones about it in the newspaper here. The jobs are gone! gone! gone - no matter what happens to GM.
They're asking for another four years -- in a just world, they'd get 10 to 20 ~~ Dennis Kucinich
the piece of info we need
is what is really the labor costs to manufacture. What is the real percentage vs. their inane supply chain, plus their billions invested in plants, overproduction trying to capture some of these emerging markets. I know they must be selling Aeros in China below cost, they go for $1200 dollars in China.
THE AMERICAN TAXPAYER IS ONCE AGAIN SCAMMED
GM claimed a need for taxpayer bailout to avoid massive layoffs caused by bankruptcy. They get the funds and still cause massive layoffs. GM should be required to retool the plants they will be closing. Keeping America productive.
Game Over ?
They have until October.
Politics always trumps Free Markets and it's all calculated!
If this fiasco hasn't turned-around by then, the O-Team will send in "The Cleaner" and the Election Cycle will rein.
Result:
- End of '09, bargaining and hope will be lost and heads will roll (i.e., L.S. and T.G. are out and the nation is a step closer to socialism)
- 2010 will bring depression and will end with acceptance
- 2011 re-election campaign kicks in with promises of "Road to Recovery"
- 2012 Capital gets the backseat with Labor in the drivers seat. O-Team is re-elected with majorities in both Houses.
The fate of capitalism as we know it, will have forever changed!
Peter
I don't see the logical link
Between 2010 and 2012. How will this "road to recovery" avoid the 50% of the population that will blame Obama for the 2010 depression, and why won't the capitalists simply move to lower-cost labor markets where the government allows slavery?
The way I see it, either Obama gets the economy back to massive job creation by February 2010- or he's going to end up a one-term President with a worse reputation than Herbert Hoover.
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Executive compensation is inversely proportional to morality and ethics.
Obama, early on, said if his plans failed, he wouldn't run again
A stupid thing to say as his political enemies would surely take advantage.
Maybe President Obama's only enemy is himself? It was a stupid thing to say then, and isn't going to reflect well if he's a bought and paid for stooge as some claim (which doesn't include me...)
I wanted to post a link, but every combination of key words led to Republican sites... :(
I will post this:
http://www.notable-quotes.com/o/obama_barack.html
Lots of interesting quotes.
I'd rather not see him fail...
I wouldn't say his ONLY enemey
But given what I've seen (appointing cabinet members opposed to his campaign promises, repeatedly watering down his own proposals before anybody gets a chance to look at them, worrying more about what China might think about protectionism than his own constituents) I'd say Obama is his own WORST enemy.
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Maximum jobs, not maximum profits.
Here's something ironic and yes I guess I was wrong.
I need someone to find this for me, but on that Fox Business Channel (Dish Network has been acting wonky on me, it was either that or Rachael Ray) had on a "friend" of one of the major GM bond holders. As you know, the major investors in GM's bonds who aren't TARP-bound, already said to the President they won't go down like Chrysler. They want their money back. So the anchor, can't think of his name but he's the only British guy on the network that I'm aware of, goes on about how the company's factories here wouldn't fetch much to recoup the bondholders. You know what this bondholder reply was?
They would go after GM's money making parts in Asia first, they've already received bids from other foreign automakers for those Korean and Chinese plants. Of course this wouldn't sit well with GM, as they would be left with mainly their US-based assets by the time the bondholders were done.
Personally, I don't know if that's 100% true. But the news posted here about this offshoring brings up two important points. But first let me say that I have a mea culpa to do. As many know, I pushed for a bailout for the automakers, because well as many here pointed out, a collapse would have been catastrophic. Yet as we are beginning to see, it seems we're going to see this economic disaster anyways. So yeah, I'm going to admit right here that I was wrong about promoting the bailout of GM and Chrysler. Actually now rethinking of buying a Ford hybrid instead of the Chevy Volt now.
Now on to the two points I wanted to bring up. The first is that we now see that the UAW was nothing more than the macro version of a human shield for GM. And honestly, it was well played. GM's management figured, and rightly so, that so long as their fortunes were tied to the Democrat's major constituency, they would get support. Do you really believe, after what two lousy business plans, that the Democratic Congress would give more money if it was made that that the UAW's fortunes were not akin to that of GM's? I doubt it.
Lastly, we are seeing a major inflection point, where the needs of the company have diverged from that of labor. For the company, it is survivability and that means turning a profit. Now we can't put the blinders on, anyone hired to turn the company around would come to a similar realization. Indeed, that specialist would immediately seek to cut down its liabilities linked with the unions. They would shut down shop in states like Michigan and (assuming they wished to maintain US manufacturing base) head to places like Tennessee or Alabama where foreign automakers like Toyota have more "friendly" deals. Of course this also assumes that the company is not majority owned by the UAW or a coalition of the union and the government (especially one friendly to organized labor). If they did find themselves possibly heading in that situation, they have only one recourse...bankruptcy.
Think about it, if you were to start a new General Motors, what would you need? Don't think about it from the perspective of saving union jobs or the middle class (especially in states like mine). Think globalization and markets, think insuring ROI, competition with foreign automakers. General Motors, well really the Fortune 500 stopped being "American companies" a long time ago. So that's my challenge to you, if you were to reboot GM what would you need to do?
Rebooting GM would immediately give the ...
... first thing that you would need, which would be to get out from under the decades of "the future is more of today" management that led GM to get bogged down under these liabilities that only made sense for a company with a big share of a big US market, with buyers buying a new car every three years, with a large labor input per car.
Given "the 1950's will last forever", it made all the sense in the world to make sure that 1/3 of the wage was promises to pay in the future out of a larger cash flow, which at the same time eliminated the overtime pay penalty.
Given "the future will be different than today", loading up on unfunded liabilities to a massive workforce was a critical mistake.
And on a "reboot", the whole legacy problem is dumped on someone else ... the UAW, the former shareholders, raiding the pension plans of GM executives, or whatever. So that is one out of the way.
Then with the old shareholders burned, have the company taken over by the employees, with genuine profit sharing in the sense of, "share all the profits among the employees", drive the wage down to a point where GM-America can be competitive across the board with North American produced automobiles, and take market share back.
Take on profit-maximizing corporations with an employment-maximizing labor syndicate and let some other sorry sucker be the one to go under the next time.
I think the UAW
should move into the management business and take over the company. Others have argued against it but I don't see why not. Odds are they (if they also get engineers, salaried workers to join in) can build a better car and be more strategic than what GM management continually does. At least if it's subsidized we would be supporting labor directly, U.S. citizen labor, with a purchase.
Time to Let Go of GM
If GM cannot make cars in the U.S. then it's time to let it go. The unions have to compromise or Mexico, China, India will just benefit from the bailout.
I agree time to reboot GM - if they are not American enough to hire Americans then boot them off America...maybe Toyota and Nissan are more American than them.
GM to move corporate headquarters "from Detroit"
moving corporate headquarters.
Firstly Detroit is a 3rd world country, so it doesn't get more cheap frankly, and precisely where are they moving to...China perhaps?
I mean this is ridiculous, it's like GM is going to declare bankruptcy and basically move/sell the entire company offshore...and that's after getting as much money as possible from the United States.
Is there anyway the U.S. can plain seize GM, take it over for it's citizens, clean it up and then reprivatize it at a later date?
This is outrageous, outrageous what GM is doing.
"To dig out of the 'Great
"To dig out of the 'Great Recession,' Washington needs to challenge China on trade and currency manipulation - but President Barack Obama and Treasury Secretary Timothy F. Geithner must recognize that Beijing only has the leverage Washington gives it.
"The nation needs to realize that this is no Eisenhower recession, caused by too much inventory. Rather, this meltdown was caused by structural imbalances in the global economy that no stimulus spending can fix.
"Dysfunctions on Wall Street notwithstanding, China and several other developing countries produce far more than they consume and enjoy huge trade surpluses, thanks to artificially undervalued currencies, export subsidies and import restrictions. Those require the Americans to consume far more than they produce and for the United States to amass huge trade deficits and foreign debt - otherwise, global demand falls short of supply and unemployment skyrockets.
"Once Americans were no longer able to live beyond their means, the global economy collapsed, and President Barack Obama has volunteered the federal government as the borrower of last resort. Now China says Washington borrows too much. That's like a drug pusher complaining about his clients' addiction. Yet, Mr. Obama appeases Beijing by offering to share stewardship of the global economy with this renegade mercantilist.
"China's purchases of U.S. Treasuries and threat to quit buying are the elephant in the room. But those purchases are made necessary only by China's huge hoard of dollars that is contrived by Beijing's massive sale of yuan for dollars on foreign exchange markets to keep the yuan cheap, exports flowing, and jobs moving from Indiana to Shanghai.
"The Peoples Bank buys U.S. Treasuries because it does not have any better use for the dollars it obtains manipulating the yuan to boost exports. If it quit using those dollars to buy Treasuries, it would simply have to put those in the vault and remove them from circulation. The Federal Reserve would have to replace those dollars in circulation by purchasing the very same Treasury securities Beijing now buys. In other words, the Fed would collect the interest instead of the Peoples Bank. That's not so bad.
"How to accomplish it? To persuade China to stop buying dollars to suppress the value of the yuan, the United States should tax the purchase of yuan by American importers until China relents.
"Message to President Obama and Treasury Secretary Timothy F. Geithner: Fixing the trade problem with China would do more to boost demand for U.S. growth and employment than even massive stimulus spending could ever deliver."
--Prof. Peter Morici. His e-mail is pmorici@rhsmith.umd.edu.
Obama is in on this. He refuses to do what other countries do
China, Japan, South Korea, Europe, Australia, Russia, the entire world imposes a tariff on imported goods, especially vehicles. They all add a 19% tariff on imported cars, which acts as a subsidy for domestic manufacturing. The US since Clinton, have refused to do the same, which makes it easier for corporate interests to outsource, and be able to import their foreign made goods into the US. If we imposed a 19% tariff on all imported goods, it would force US companies to bring jobs back to the US. But Obama won't do it, because he's corrupt, and sits in the corporate and foreign interests pockets. He's lied from the very beginning.
China very good at work.. Very dependable..
If we can't beat them, join them! Not!!! But GM is making a crucial error, because it has," we the peoples" money funding China laborers verses USA laborers. No one in this country wants to see GM take off with our money and outsource jobs, so it puts America even in more of a recession. Sure they can get cars for a cheaper price, but without jobs, who will be able to even afford a Chinese car.. And a funny this occured. We got the 1.6 trillion dollars mainly from the Chinese, we gave GM a 15 billion dollar loan to restructure and think up the next fuel efficient car, now GM is talking bankruptcy anyhow and buying cars from China to send to the USA. Recall we are friends with China and they own America basically. Walmart, K Mart, Target, Dollar General, ect.. They are into scooters, atv, motorcycles, dune buggies, ect.. Now cars.. So anyhow, I am for the Chinese to bring over cars too, if they feel they will sale. They are apart of the US Trade Agreement. Japan, Germany, Korea, Mexico, ect are making our car products. Transmission parts made in Japan, shipped to Mexico for assembly, and put in a Ford sold in the good ole USA. But even Ford is talking a deal with China, but Ford took no bailout money. So Ford can do what they want. Recall the PUMA- GM's latest creation the two man electric wheelchair. Probably designed after a actual wheelchair. But it was GM's lowest moments. See, I thought they had courage and would fight for dominance in the auto world. Think up a two person car, 600cc engine, get 60 mpg and travel 55 mph.. This was our President asking the impossible of GM. Ford is making cars and on no bailout. 15 billion dollars is enough money to start a auto manufacturing plant. Did that money go on bonuses. It makes me wonder. I own a 2006 Chevy Colorado that I wish was a Ford.
Keep the goverment bailout money in Detroit
U.S. taxpayers have given billions to the automakers, the least they could do is put that money to work back into the local economy. Otherwise let foreign governments bail them out.
What would happen if we only bought usa made?
What would happen if we forgave debts passed the 7 year limit suggested in the Bible? And what would happen if we did not allow banks to charge too much excess and what would happen if Americans only bought USA products?
Is this too morale for America?
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