The political everybody has an opinion not based in fact pundit world is ablaze over a new Romney ad claiming Chrysler is planning on building a plant in China and making Jeeps there. The ad references this Bloomberg article, from October 22nd, which reports Fiat, the majority shareholder in Chrysler, wants to move some production to China.
Fiat SpA (F), majority owner of Chrysler Group LLC, plans to return Jeep output to China and may eventually make all of its models in that country, according to the head of both automakers’ operations in the region.
Fiat is in “very detailed conversations” with its Chinese partner, Guangzhou Automobile Group Co. (2238), about making Jeeps in the world’s largest auto market, said Mike Manley, chief operating officer of Fiat and Chrysler in Asia. Chrysler hasn’t built Jeeps there since before Fiat took control in 2009
Because Romney called out the auto manufacturers offshore outsourcing and used the above Bloomberg article, the Obama campaign went on the attack. In response the Romney campaign went all in and is standing by their ad. No surprise then, the Chrysler CEO came out and said the ad is flat out false. Yet....watch the words closely...
We are working to establish a global enterprise and previously announced our intent to return Jeep production to China, the world’s largest auto market, in order to satisfy local market demand, which would not otherwise be accessible. Chrysler Group is interested in expanding the customer base for our award-winning Jeep vehicles, which can only be done by establishing local production.
Now the thing to notice is the claim Fiat, aka Chrysler must manufacture local to sell in China. Notice how they are not going to export to China from the U.S. That is in part, a direct demand from China in order to obtain access to their markets. Companies are often forced to manufacture in China by their policies. Last December China slapped a 22% tariff on large autos, of which a Jeep would be classified. Now the Obama administration did recently file a WTO complaint against China, but on auto parts, not China's tariffs on autos & trucks. The other thing to notice is the Bloomberg quotes are from Fiat, the parent or controlling shareholder company of Chrysler. Chrysler make do one thing, but in spite of the massive investment in plants, physical advanced manufacturing, the decision to move to China would actually be the majority shareholder, Fiat.
We also have a former Chrysler CEO step into the fray and is all up in it on Romney. He's upset, not because the ad is lying, but because he doesn't want the U.S. government telling corporations that they should hire the citizens of the nation. Isn't that nice, especially considering all of the corporate welfare U.S. taxpayers give to these firms?
Most of us know jobs are tradable and there has been massive job losses in manufacturing, in particular durable goods. The United States has lost millions of jobs and manufacturing to China and yet the Obama administration will not label China a currency manipulator.
While Chrysler is manufacturing in the U.S. and will continue to do so, the real story is those Jeeps manufactured in the United States will be for the U.S. domestic market, not for export to China. This does mean less jobs for Americans, at minimum.
We also know corporations hate for the public to know about their offshore outsourcing activities and plans. Surprise, it's bad public relations and they go to extreme ends to hide even their headcount abroad. Corporations even force the government to sign non-disclosure and confidentiality agreements just to obtain even payroll data. All of this is so corporations do not have to disclose their offshore outsourcing of plants and jobs, even though most are publicly traded companies.
It is no small wonder then, Chrysler would deny this is going to happen. That may even be true, after all Chrysler is heavily invested in plants and production in the U.S. Yet we know, all to well, the history of the U.S. auto industry is to move plants, manufacturing and jobs offshore as is true in many manufacturing sectors. Million dollar facilities have been shuttered, the equipment sold at auction or shipped to, you guessed it, China for a manufacturing facility there.
GM just announced Q3 quarterly earnings and notice the increase in Asia:
GM's international operations unit -- which includes China, South Korea and Australia -- posted an operational profit up 89% to $689 million. The South American unit turned to a profit of $114 million from a loss of $44 million a year ago as GM began rolling out a batch of new products.
U.S. auto companies are frothing at the mouth to get access to 1.4 billion people who potentially want to buy cars and these multinational corporations will trade jobs to do it.
Let's go back in history to the auto bail out. At that time, it was widely announced GM was offshore outsourcing jobs.
People fail to remember, but Bush actually started the auto bail out. We actually were here, strongly in favor of bailing out the auto industry and writing many articles to that effect.
We all know the auto bail out demanded concessions from unions. Chrysler turned around and hired Indian offshore outsourcer TATA in a $120 million contract deal. So, let's get real, Chrysler is offshore outsourcing and bringing in foreign guest workers to displace American ones.
Treasury exited from the Chrysler bail out to the tune of a $1.3 billion dollar loss. As soon as Fiat moved in on Chrysler, the worker squeeze started in earnest. When Chrysler entered bankruptcy, a few unsecured creditors, bond holders made out like bandits on the deal where a host of pension trusts sued due to the 29¢ on the dollar agreement. Today GM and Chrysler pension funds for the UAW are seriously underfunded and often referred to as a hidden time bomb.
What isn't realized is the Obama administration also squeezed on workers for Chrysler, by demanding their decimate their health care promises for retirees. Also what seems to be forgotten is during the auto bail outs, GM was outsourcing like mad and invested in Brazil.
One of the most underreported stories was Delphi Automotive, an auto parts manufacturer, with plants in places like Kokomo, Indiana. Delphi was part of the bail out as some of it was eventually purchased by GM. Hedge fund managers made out like bandits on government money as they shipped most of the Kokomo, Indiana jobs to China and took most of the pensions of salaried workers by dumping underfunded pensions onto the federal PBGC. The PBGC is a kind of a government, our pensions are bankrupt really fund. Now these hedge funds have been attempted to be connected to Romney, but that's ridiculous for Romney's investments, as well as his wife's are and were in a blind trust at that time. A blind trust means one has no involvement or awareness on how those funds in that trust are invested. While we can blame some rogue hedge funds that the trustee, managing the Romney's blind trust, did invest in, how those hedge funds were allowed to hold a managed bankruptcy hostage, for profit, or make billions in a glorified government bailout is another issue that never gets addressed. What we do know is team Obama knew all about these investors and nothing stopped them from raping and pillaging the salaried workers at Delphi. In fact the workers themselves blame the Obama Administration.
On the other hand, Chrysler's government and Obama's stimulus funds did get some automotive manufacturing jobs back in Kokomo, which is the good news generally on the very necessary auto bail out.
The bottom line is we don't know which is worser for the U.S. worker, Obama or Romney. We do know that the U.S. auto industry had to be saved, if it had not been we really would have seen a economic depression. We also know Elliott Management, the hedge fund involved with the Delphi bankruptcy, is a notorious bad boy, squeezing nations by holding their sovereign debt and demanding sweet deals, all to wrangle maximum profit from the vulnerable. On the other hand, we also know Obama has offshore outsourcers in his administration and certain never did anything about NAFTA, as promised in his 2008 campaign or has done anything to stop the mass exodus of jobs to China. Both Obama and Romney are promising more bad trade deals, more foreign guest workers and more offshore outsourcing.
We also suspect Bloomberg's quote from Fiat is probably right. After all, the auto industry has been outsourcing jobs for decades, moving entire manufacturing plants abroad. The job hemorrhage started in earnest with the bad trade agreement NAFTA and the flight of industry to Mexico. The decimation of Flint, Michigan was the subject of Michael Moore's documentary, Roger & Me. We don't see why this time would be different from all of the other times where the auto industry is bailed out and says thank you by layoffs and moving jobs abroad. After all, no matter which party is in the White House or controls Congress, nothing stops our Benedict Arnold corporate culture.
I did read the Bloomberg
I did read the Bloomberg article you reference in this. It says the manufacturing in China is additional, not replacing manufacturing in the US ...
pretty crappy reporting on your part
you clearly did not read our article
First, we pulled the direct quote out of Bloomberg for a reason. There you can see the direct quote.
An addition quote from the original Bloomberg article is this:
That means, Fiat is talking about moving the entire Jeep manufacturing line to China, that is what they are considering doing. Localizing the entire Jeep portfolio is the key quote. It's highly doubtful they would have two complete duplicate production lines of exactly the same model, in two separate countries. That's not what they do, they globally source. Thinking they would have duplicate production lines does not make sense from a manufacturing efficiency standpoint.
Also, notice our point on Chinese tariffs against U.S. autos as well as how the Obama administration is M.I.A. on China and trade and instead Romney is the one talking about the massive drain China is on the U.S. economy and jobs.
We know Bloomberg's reporting is solid and they talked to the source for these quotes. We also know offshore outsourcing is loved by Wall Street and it's only public relations, marketing groups who say "shut up", "hush hush". If you don't believe that, believe this. GM by 2001 or so had moved the entire Chevy S-10 truck production to Mexico. They really do move entire production lines offshore, that is the auto industry's history.
Second, we've been tracking on the auto industry for a long time and this site heavily focuses in on outsourcing, multinational corporations. You clearly did not read the rest of the article details, showing, at the time of the bail outs, these companies were offshore outsourcing jobs.
Delphi, Kokomo, Indiana was decimated.
That's the problem with politics and why this site, not only is focused on economics, facts, statistics and data, but is also non-partisan.
The real issue for partisan people such as yourself, all up in it about which way the election goes, is why is Romney running an ad on offshore outsourcing and loss of U.S. manufacturing to China? That should be a Democratic major issue and since when has Romney set forth a detailed manufacturing plan to make sure goods are manufactured in the U.S. beyond confronting China on their currency manipulation?
In other words, we have a situation here where the messaging is almost turned and the GOP are now championing an issue that should be a Democratic one and we know Obama hasn't done hardly anything about China, the trade deficit and the loss of manufacturing to China.
We also know in the 2008 primaries, Obama, to capture the Midwest, put out a bunch of lies against Hillary Clinton on NAFTA, implying he would rewrite NAFTA upwards. They clearly had no intention of doing so, and since he has been President, has not. In fact he signed and championed every more trade agreements based on the NAFTA model which are now of course increasing our trade deficit.
Don't believe that, see our post from 2008 comparing Obama and Hillary on trade policy.
Sorry, but one needs to look at the facts here, not be a cheerleader for politicians whose actual policies positions are against the national interest and the middle class interests.
This site isn't endorsing any party or candidate and the reason for that is we are policy specific and issue specific. The spin out there is so furious, we do author articles with actual facts on some of these topics when the spin becomes a B.S. maelstrom.
Check out this shady sh*t...
Blackout imposed as W Bush speaks at Cayman Islands investor conference.
Repugs have no discernible conscience, loyalty or even a soul. They worship greed. Dems are corporate shills too. That said its not their religion. Only Romney makes more bad trade deals a centerpiece of his campaign. More taxcuts more trade deals good god how much more can we take. The Republicans need to be euthanized before they start biting more of the neighbors.
So there are your choices. For the record I always go with no religion I agree with Jefferson whether it be about politics or eternal salvation.
"I never submitted the whole system of my opinions to the creed of any party of men whatever in religion, in philosophy, in politics, or in anything else where I was capable of thinking for myself. Such an addiction is the last degradation of a free and moral agent."
-Thomas Jefferson, letter to Francis Hopkinson, March 13, 1789
Cayman Islands says it all
Isn't it nice for the super rich to have a conference in their favorite tax haven tropical paradise and to get a former President of the United States to speak at their conference about how to hid your money from taxes from the prying eyes of governments?
Lest we forget, President Obama signed the Panama trade agreement, which strengthened tax havens and made it harder for U.S. to even track them. That's a sitting president signing a glorified tax haven deal.
Honestly, thinking in terms of Republican or Democrat when it comes to letting the super-rich and MNCs steal and suck the money out of the people is a mistake. They both are all in.
"Mitt Romney and his partners made a killing on the GM bankruptcy by gaining control of bankrupt parts supplier Delphi, then threatening to withhold components critical to the production of GM vehicles... This is the real Romney" - UAW President Bob King
USA TODAY Wednesday article on the filing of an ethics complaint by the United Auto Workers against Romney and Bain.
Romney, Bain was not involved in the GM Bankruptcy
Greg Palast wrote an inaccurate piece and why I wrote this. God love him, but he sure did pull off a boner here.
You'll see above that I link to it and why I wrote this piece, it's simply wrong and thus a political hit piece.
I just went through this for a reason, Romney simply wasn't involved and this is piss poor "Journalism" (hit piece) or comments, claims being spread by social media, by trying to claim Romney's blind trust, which frankly there is no way Romney or his family is so stupid as to try to direct an investment in a blind trust, anyway, that trustee invested in Elliot Management, a hedge fund.
It is that hedge fund, who is currently holding Argentina hostage over some bad sovereign debt, who made out like a bandit.
I make this clear in this post and why I wrote it. We have fictional hit pieces, pick a candidate flying around and this is a big one.
(What was that about Elizabeth Warren having Indian ancestry? )
My understanding of the claims not only with Delphi but also Sensata (who moves jobs to China Tuesday) are that Romney does profit from his investment in Bain. He may not be managing the company, but he owns stock that pays dividends. The articles are far beyond Greg Palast. Sensata closed their doors when Ed Schultz arrived with a tv crew last Friday. The estimate of the Romney profit from Sensata is $8 million quoted in at least a dozen articles that I admit are "liberal" blogs. Romney's pattern with Bain was clear. Matt Taibbi did a detailed article in Rolling Stone about how Bain, with the cooperation of Goldman Sachs, had unlimited funding to "leverage" their small investments in companies until they were only good for bankruptcy after taking massive fees. Combine this pattern repeated many times by other similar companies and CEO's massive pay. It is real money. The interview of Ed Schultz with the President of UAW is available on-line at MSNBC.
Romney not part of Bain since 2002
He was severed "retired" by 2002. Hey, there is no doubt Romney was a founding partner at Bain and leveraged buyouts, dismantling companies, selling off assets and all of that was what they did, it's more surprising that they bootstrapped some companies and kept them alive.
The evil doings of Sensata are simply not Romney's doings, although it if was 1998, we could certainly say they were, but it's not.
This is a great story of how private "equity", hedge funds and "investor groups" gain controlling interests, buy up junk bonds, debt in bankruptcy and so on and then stick it to the people.
What do people think the European crisis is all about? Paying back the "investors", holders of sovereign debt.
But this site, we simply do not do political hit pieces, it has to be accurate, factual and trying to tie Romney to what's happening now when he left Bain a decade ago isn't right.
We also have companies closed, the jobs sent to China, every single day, we have 2.7 million direct manufacturing jobs lost to China.
So, it's not just Bain in this game, try Microsoft, Cisco, Oracle to India, manufacturing to China and the list goes on and on.
Even little red wagon went to China and Levi's went to Mexico.
blind trust + rant
The money is in a blind trust. This guy had political ambitions and there is no way he's going to direct a blind trust, that's illegal.
About the only thing one can say about the blind trust is who he set it up with and the trustee. In other words, the choice of manager, who runs it, well, he's not exactly Mr. moral investor.
The real question here is why isn't team Obama doing something about China, offshore outsourcing, LBOs, private equity, tax havens, hedge funds?
There are six ways to Sunday to stop these practices and team Obama hasn't done jack shit. In fact he signed more trade agreements to enable even more offshore outsourcing and imports and ....tax havens...
Good God, it's a cold day in hell to see a Republican railing on China while the Democrats do nothing. There ya have it!
Retraining? Are you kidding me? We have millions, literally millions with the skills already plus we have returning Vets who also have intense skills, all through their military training and those skills are being completely ignored, discounted by employers.
If Democrats wanted to do something they would force "private equity" into getting their 15% tax rate by hiring U.S. citizens, not distributed profits from "investments".
Your dedication to the lousy job situation is clear and appreciated.
rants r us
We have two candidate selling us snake oil on what it's going to take to really turn this economy around in terms of their "solutions". They describe the problems, yet their solutions aren't gonna cut it and most of them will make things worse.
I'm actually a huge believer in VCs, angel investors, start-ups, new business, but know they simply have to tie all of those potential riches for these types to take the risk, to U.S. citizens, to the workers. Right now, the riches to be had are so often by screwing the workers. I'd say the most consistent thing since 1980 has been labor arbitrage, endorsed, enabled by both parties with a lone few trying to fight the good fight.
I should write up a piece about Elizabeth Warren's accomplishments for the middle class, she's a stand out in this year's candidates.
Bob Kerry is getting crucified in NE for Senate, which is sad and surprising. He's super smart and has a wicked sense of humor to boot. Looks like that state went so red if they ran Jesus as a Democrat he'd lose.
Generally it's like we get 1 here, 1 there in terms of real representation and the rest of this "industry" is simply torturing the American people with ad carpet bombs, showing up at their door and never really presenting plans that actually solve the job and economic hemorrhage out of the nation.
The mantra seems to be "repeat the lie and they will believe it as truth" as our theme for the last 20 years.
Just glad folks are here reading, writing their insights, opinions.
The people with massive skills scare the crap out of HR/bosses
Other people have noted this and I've come to the same conclusion. In America (and other countries too), if you have incredible skills, unique backgrounds, etc., then you are a risk to simpleminded folks or those who are truly insecure despite their endless talk otherwise. Vets, contractors from overseas, people that built companies from the ground up or worked in many fields and learned lots of info. and realities about the world are absolutely seen as a threat to managers, HR, CEOs, etc. Of course people have gaps in their resume if they sought more learning opportunities, traveled for jobs, took care of sick relatives, etc. And that's punished. An insecure boss that got his beginning, promotions, and rise to the top through family connections or buddies protecting each other and that never led teams through thick-and-thin, lived in many countries and had to talk to people as equals, not subordinates, will be scared of someone that has, and often at much younger ages and without all the corporate and bureaucratic BS (same with govt. jobs, not just corporations). He sees people that can do those things as a threat. Or an honest person involved in fighting terrorist financing actually getting hired by a bank like HSBC or Well Fargo or Standard Chartered to fight terror financing? Even if some people come from the US Attorney or DOJ or Treasury, if they really cared, wouldn't/shouldn't they quit as soon as they saw their corporation was engaged in such practices? Even if the corrupt or incompetent CEO or boss doesn't see them as a threat to his position, or his friends' positions, he knows by allowing them into the organization at all the skilled/qualified person's background and achievements will be there, every day, in stark contrast to his own. And what can be said when someone that ruins companies and got his job through backstabbing or nepotism is compared to someone that is at a much lower position and has accomplished so much more (without the big ego and big paychecks)? Can you imagine a CEO like Dimon or Blankfein being humble and busting ass out in the field facing life-and-death? On the other hand, could you see the opposite and see someone that accomplished great things for low-pay or what used to be middle class pay and could accomplish so much more at 1/100th the pay current CEO's demand? Of course they could.
But HR puppets, their software, etc. purposely prevent the "poison" that shows them for what they are from ever getting hired. Thus, the best and brightest are purposely locked out, ignored, and viewed as a threat while they are libeled and slandered as those "without the necessary skills." In one sense, sure, many of the unemployed don't have the skills of backstabbing, lying on their resumes, demanding others be fired so that they receive more in compensation, selling out their country for a quick quarterly profit at the expense of our Nation's security and fellow Americans' safety and security and welfare. So in a sense, yes, there is a skills gap. And what skills most banksters and politicians and CEOs and HR reward nowadays are anathema to honest, good Americans.
did your power just come on?
The site regulars and traffic have died down, now back up and I know a huge percentage of our readers are in the DC area as well as NYC area.
I think there are many, many in work world who are extremely intimidated by smart, skilled people, esp. those of the female gender. I think people who are not easily intimidated also scare them.
You're not imagining things, work has become such a "survivor" game people stress and are threatened over terror they will lose their own careers.
Took time off - watching Sandy news
Sandy's both cut off power to millions, but also many people unaffected are simply watching the news or not visiting blogs unrelated to the storm and its aftermath.
Completely off article and thread, but GOP "no big govt." favorite Chris Christie imposed government control of private fuel distribution by imposing rationing via license plate numbers in face of massive fuel shortages. I guess when it really counts and national emergencies hit Americans, elected officials actually do have to make governmental decisions to save and protect lives and property and earn their on-the-record salaries. I agree with the decision, but I can't stand the ridiculous "all govt. sucks, Grover Norquist rules" crap that is useless in a world that actually exists with real people, lives, problems, and solutions. Yeah, govt. sucks, until Grover's car is dented in a car accident or someone steals his wallet filled with corporate donations and then he can't call the public-provided, public servant police soon enough. Or should people look to Grover's doughy ass to look out for us instead of our neighbors, the government, and other people in a commmunity, not just selfish pigs.
/end of off-topic comment
"no big gov" is just a cheer like "go tigers" or "Nascar"
Right, you notice Bush had no problems expanding government plus giving the Banks trillions through TARP, indirect bail out Federal reserve.
At least they punt and show their political rancor is just that. What horror it would be if one of these people bought into their own B.S. and didn't do what was needed to be done.
I actually thought they were hyping Sandy until maybe 10 hours after it hit and when they said "under water" for Atlantic City plus Staten Island ...
I can see Bloomberg's attitude towards poor people in the NYC response, so much for liberals when the shit storm happens huh?
Anyway, I see the server statistics and it was like a big brown out from the entire Eastern seaboard and now they are showing back up, some.
Grover Norquist needs to be tarred, feathered and run out of town on a rail. Who/what is behind that guy for him to obtain so much power?
The real question to ask on Romney & the Auto Bail Out
Isn't trying to tie the actions of the trustee, what he invested in and those organizations evil doings (Elliot Management), but how and why hedge funds were allowed to buy junk bonds and gain access to government funds in a managed bankruptcy in the first place?
These companies already had some government funds and the government directed these bankruptcies, so how was this allowed to even happen?
I just re-read Romney's notorious op-ed in the New York Times calling for the auto industry to go bankrupt. The thing is, what he called for, actually happened. Executive management was replaced, the corporate jet was ridiculed, the UAW made major wage, health and retirement benefit concessions and GM, Chrysler, Delphi went into a managed bankruptcy, Ch. 11, in 2005.
In 2011 GM sold part of what they bought from from Delphi to...drum roll please, China, but due to a massive "tax credit" from the state of Michigan, jobs were not offshore outsourced...yet and there are contracts in place.
Delphi's bankruptcy enabled these hedge funds to buy their junk bonds....so how and why did the U.S. Treasury give Delphi TARP funds which is what turned the profits for these hedge funds?
How can the government give U.S. taxpayer funds to a company and not discharge those junk bonds in full?
We know hedge funds are evil and buying up junk bonds, distressed debt is making people super rich by bottom feeding.
That's the real question to be asking here is how and why these hedge funds are allowed to profit in the first place.
The UAW and others are really trying to carpet bomb Romney on this one, claiming the investment in Singer, through a blind trust, was a "donor buy in" for his election campaign. I really don't believe Romney is that dumb frankly.
What is perking up my interest is understanding precisely how these private equity, investor groups were allowed to buy anything when the government had stepped in already.
My impression from the interview on Ed Schultz with the President of the UAW was similar to your concern. The attraction of the hedge funds to Delphi was the money put in by the government. The only way Delphi could raise the price of the parts in a hostage move was to get some of those government funds. That should be the question. Also, as Obama said in one debate, there were no private funds for the GM save in contrast to Romney's assertion that the bankruptcy court would have done the same as Obama. This is a case study that should be larger than the election. First we hope Congress will adjust the tax laws to prevent profit from sending jobs overseas, but the entire system robbing the US of jobs is worth an educated study and do it quickly. We have a generation with a future off-shore as ex-pats.
exactly Obama vs. Romeny vs. bail out
Hedge funds did get 33¢ on the dollar, per-negotiated and then 29¢ on the dollar as a deal, but these are junk bonds, so what they bought in at is another question. Hedge funds did make out in the GM bankruptcy.
"Price of parts", I'm not sure what you mean. Most of those "parts" are now coming in as Chinese imports as Delphi was pretty much shipped off to China.
GM bought some of the Delphi and with government funds. But Delphi entered bankruptcy in 2005, long before the auto bail out. Hedge funds already owned the Delphi bonds for they moved in during 2005.
So, the question is why....did GM purchase some of Delphi as part of the bail out and why then, were hedge funds allowed to make top dollar off of government funds?
To me, there should have been 6 ways to Sunday to get around the hedge funds owning Delphi bonds, yet still build up the auto parts manufacturing GM was after...
I'm still digging around. But the real point of this is, while the UAW and Schultz are spinning this story to pimp for Obama for election 2012...not so fast...
It was team Obama who was involved in the auto bailout, therefore team Obama are the ones who allowed these hedge funds to make out like bandits.
Team Romney wasn't involved.
I don't know for sure if the bankruptcy court through a chapter 11 could have done the same thing, these deals are mega complex, but I do know that private equity swooping up and buying distressed debt and then stickin' it to those companies is vulture capitalism and should be stopped, made illegal in some way.
I don't think in a managed bankruptcy, one "must" have private funds to come out of it. I don't know what that has to do with a Ch. 11 managed bankruptcy (unlike a liquidation). We basically got a managed bankruptcy, so it could be Romney's assertion is true, bottom line large corporate managed bankruptcies are so complex, we're sure not going to answer this one in a comment!
Gez UAW, you took $14/hr for manufacturing work, are you kidding me? Cerberus Capital Management broke even as I understand it from their private equity investment in Chrysler btw, unlike the UAW workers and never mind the salaried ones.
I don't get this spin bogus stuff beyond trying to sway the election. We know, as we wrote at the time, if they didn't save the U.S. auto industry we were going into a depression and I believe there were something like 3 million additional jobs on the line, indirectly.
That said, team Obama did they do this optimally? That's really questionable. Would a managed ch. 11 have been better? Well, shipping pensions to that bankruptcy group is the kiss of death, so right there is a disaster for workers in a Ch. 11 bankruptcy.
I'm going to write up a series of articles some people who have been here, writing about auto bail outs, the financial crisis, trade since 2008 are now writing for people to read. The election narrative is seemingly wiping out history and it's on maximum high noise at the moment. I'd hate to live in Ohio!
private equity firms
The New Yorker has a pretty good article on private equity firms and makes reference to this practice of dumping pensions onto the PBGC. Robbing pensions by hedge funds is seemingly the one save by team Obama, not clearly "not quite"...to me bottom line this should be made illegal and pension obligations shouldn't be allowed to declare bankruptcy on, plus executive officers should face criminal charges by not fully funding pensions.
auto bail out and the election
The auto bail out was really spun heavily by various groups, and the campaign. The thing which is amazing is how GM and Chrysler went through a managed bankruptcy, which is what Romney advocated for.
It was pre-negotiated, the government stepped in which is also similar to what Romney was talking about.
When Romney wrote his piece, GM & Chrysler were going to Congress asking for a bail out. It doesn't seem to be realized Obama declined a bail out and this is how GM entered Ch. 11 bankruptcy, as which point the government gave loans, warranties and negotiated restructuring terms in part.
So, Romney made a huge mistake in not explaining his own position, although I wonder if Romney had been involved in these Ch. 11 bankruptcies if any pensions would have been saved...
So, it's really a matter of the negotiated terms, not letting Detroit go bankrupt for Obama also let Detroit go bankrupt in order to do a managed restructuring with government loans, guarantees.
auto bail out aftermath my prediction
We tried to show there was spin going on over the auto bail out. I think we all need to remember this and watch the U.S. auto industry. I personally do not think Chrysler will shut down Jeep manufacturing in the U.S. yet...as in at least during Obama's term.
My prediction is Chrysler will not expand in the U.S. and bits, pieces will be offshored of the manufacturing chain. This is all predicated on tax savings by globally sourcing and China's auto related tariffs, indigenous innovation policies are not challenged by the U.S.
You have Got to Watch this video on GM & China
Found this through Economy in Crisis.
I checked some of the facts for my details are before the bail out and this is after. So far, all correctly cited, although the "socialist" red China is kind of crap, they aren't at all European socialism such as Canada, Norway, Sweden and so on, so that spin gives European/Canadian socialism a bad name.
Anyway, the unions really went to town on Romney when the fact is here is GM talking about offshore outsourcing advanced R&D to China, something they were doing before the bail out and that's huge U.S. jobs, never mind the factory expansion is in China, instead of demanding China reduce their auto & truck tariffs so U.S. workers can export to China and keep the jobs here.
This video was made in May but I just saw it now. More validation on the auto industries business model to labor arbitrage, offshore outsource jobs and move jobs to China on promise for access to their consumer market.
Yes, we all know Romney is private equity and so on, but blasting that campaign for this particular ad was a real hit piece.