Under Restructuring, GM To Build More Cars Overseas

[NikolaC]

Source: Washingtonpost.com

Under Restructuring, GM To Build More Cars Overseas

By Peter Whoriskey
Washington Post Staff Writer
Friday, May 8, 2009

The U.S. government is pouring billions into General Motors in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan, many of the company's new jobs will be filled by workers overseas.

According to an outline the company has been sharing privately with Washington legislators, the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double.

The proportion of GM cars sold domestically and manufactured in those low-wage countries will rise from 15 percent to 23 percent over the next five years, according to the figures contained in a 12-page presentation offered to lawmakers in response to their questions about overseas production.

As a result, the long-simmering arguments over U.S. manufacturers expanding production overseas -- normally arising between unions and private companies -- is about to engage the Obama administration.

Read more: http://www.washingtonpost.com/wp-dyn/content/article/2009/05/07/AR2009050704336.html?hpid=topnews

[blue_onyx]

1. We should increase the import tax

This would give GM, as well as many other companies, the incentive to build here.

[comtec]

12. We need a fucking import tax first!!!!

Just ask china, it basically doesn't exist!

[Fumesucker]

2. A feature not a bug of the restructuring..

This is basically the whole point of the charade/kabuki that's being played out.

[saigon68]

16. Who is going to buy these Gems?

If you don't have a job and eat from food stamps--- I don't believe you will be buying a $30,000.00 car

OH WAIT--- The BANKS will loan you the money at 33% interest.

LOL

[w4rma]

3. Let them go bankrupt and down the tubes, then. No help for companies like this. (nt)

[Better Believe It]

4. You'll be hurting the auto workers, not GM execs.

Just don't permit them to use any money that will outsource jobs.

Period.

[w4rma]

5. It's time to change the 'free' trade laws, now. The government can't beg every business to employ

Americans. The government just has to force the matter.

[cyclezealot]

14. Wise indeed.

Reason we did not vote for Obama in the primary. he is somewhat less corporate than Bush. But, he is still corporate.. Obama recently said Nafta would not be re-visited. And the Trade Rep. , Ron Kirk said, there is Democratic unanimity with Free Trade. Dam it, Kirk does not speak for this Democrat. And I doubt a majority of Democrats in the US House.?.. Or I hope not.
Federal Reserve Chair, recently said , there will be no getting out of the depression if there is no job growth.. American labor will never compete with the Chinese. And we are not producing the brain power for the sham , we call the 'high tech, ' economy which is also being "off shored."
We had better contact our Democratic leaders in the Congress and tell them, there is not unanimity about Trade issues within the Democratic party. We need Fair Trade, not Free trade.. Or else this Democratic Administration will be an economic disaster.
We have leaders in the Congress who might be able to force Obama's hand. I doubt it, But, its the only way to save our jobs and future of the Democratic Party.

[OhioChick]

21. "The government just has to force the matter."

Damn straight.

[Mari333]

6. oh brother. nt

[Demeter]

7. GM Better Build for the Overseas Market, Then

They won't be selling that around here.

[excess_3]

8. GM need to sell something to somebody.

at least until recently,

'non North-America-GM' was doing
very well

[AdHocSolver]

9. The purpose of the bailouts is to save the profits of the corporate insiders, not the U.S. economy.

Using "bailout" money to pay out executive bonuses, buy out competitors, and, in the case of General Motors, build an auto plant in Brazil (per an earlier post on DU), has been the intent all along. Why are people surprised?

The corporate system is a giant Ponzi scheme. The stock market is its engine. Shareholders "own" only a piece of paper. Corporations are controlled for the benefit of the insiders, that is, the top executives and the board of directors.

The middle class is encouraged to put their savings into the stock market based on promises of getting a much higher return than they would get from insured CD's or savings accounts in a bank. The Fed is in on the scheme by artificially keeping interest rates low to make people think that the stock market is a good deal. At the same time, the banks are free to charge usurious rates on credit card charges.

Middle class buyers of a company's stock push the price up (demand for a relatively fixed supply of stock shares). The executives and directors of the company essentially give themselves stock through the mechanism of stock options. They don't "buy" these shares until the price goes up and they can sell at a substantial profit. This eliminates the risk, and then their profits are taxed at a lower capital gains tax rate. What a sweet racket. And the middle class is clueless on how they are being scammed.

The end game of the scheme is an eventual collapse of the stock prices. This collapse is essential to running the scam again. The stock shareholders lose their investments, the stock price drops eliminating any claims by the shareholders on the company's assets. The executives are free to start issuing themselves new stock options at a much lower price, the executives claim the right to these bonuses because they are "turning the company around" and need these "retention" bonuses, and the middle class is encouraged to start "investing" in the stock market again.

This time around (2009), though, there is a new fly in the ointment. The corporations have been competing so strenuosly for middle class savings by pushing the profits up through the main cost-cutting measure of offshoring jobs, that the middle class has run out of savings to invest in the stock market. This is why the bailout scam was proposed.

The bailout money is designed to prevent the losses of the insider executives, by replacing the money that the middle class would have invested, had they any savings left to invest.

Now you can understand why GM wants bailout money to build a factory in Brazil. American markets are defunct because the American middle class is broke. The "new" markets are in China and Latin America.

Don't be fooled into thinking that there are no matkets in Asia or Latin America. It is true that workers in those counteries are poorly paid. They are not needed by GM or any other corporation to develop markets. The managerial class in those countries, the "slave drivers", will be well paid and form a new middle class for exploitation.

[pauldg0]

10. This is a bunch of crap.......

.....it was my understanding that Obama had a group overseeing the money to be delegated to United States job interests. I pray this is true.

We have to get on this and stop this nonsense.

The jobs belong here.

I am pissed!!! Our bailout tax dollars for jobs overseas?.......
I am a sixty year old engineer stuck in Detroit area who is highly talented, educated and underemployed for seven years.

There are no jobs here and being sixty makes it worse. This is so depressing, not only for me, but all my friends too.

Please President Obama, stop this!!!

Who in Gods name wrote this into the plan to increase production in foreign lands. I just can't describe what I feel or what I would like to do to the bastards.

[Hannah Bell]

11. duh. this is the whole point of the "bankruptcy," to offload obligations to workers here & move.

folks who think GM is anywhere near "bankrupt" spend too much time listening to the TV & not enough looking into the details of the financial reports.

it's just more 3-card monte.

[OKDem08]

13. if the deal is finalized in this manner...

and just in case you had any doubt, the government of this country works primarily for corporate interests, global corporate interests, that is

[saigon68]

17. Unfortunately lots more

Beginning to look like Bush "Light" is firmly in the saddle

[SlingBlade]

15. "new jobs will be filled by workers overseas"

:wtf:
Something is wrong with this picture, At what point does common sense come into this

Nevermind !

[pampango]

18. In the article GM's domestic manufacturing will still be 2/3 of total in five years, as it is now.

Since the article also stated that production in Mexico and South Korea for the US market will increase from 15 to 23 percent, there must be a decline in other foreign production (Canada, Europe?) to keep the foreign percentage of the total about the same.

"Most of that growth -- about two-thirds of it -- will occur in the United States. But about one-third of that growth will come from other countries, mostly Mexico and South Korea. Those proportions roughly reflect how GM builds the cars it sells in the United States today -- about two-thirds come from the United States and one-third from other countries.

According to the figures shared with lawmakers, the percentage of GM's U.S. sales of cars built in the United States dips from 67 percent in 2009 to 61 percent in 2012. Yet the company projects that by 2014 the percentage will rebound to 66 percent. "

"... company officials and industry analysts have long argued that, even putting aside the issue of labor costs, it makes logistical sense to build some cars in other countries, even if they are destined for sale in the United States.

Take, for example, the Chevrolet Spark, a tiny car that GM sells in South Korea and elsewhere in Asia. In the next few years, the company plans to send some of those cars -- which are built in Changwon -- to the United States for sale. But since only about 5 percent of the car's market will be in the United States, the manufacturing will remain in South Korea. ""

[No Elephants]

19. Change you can pay overseas workers for. I think my head just exploded.

[Romulox]

20. Er, guys...this is the plan that the Obama admin DEMANDED. Put blame where it belongs. nt

[FarCenter]

22. Buy a Honda made in Ohio

Outsource management, not workers.

[blue_onyx]

23. Nope

I'll be buying a Chevy Malibu made in Michigan. According to the article, only 15% of domestically sold GM vehicles are made outside the US/Canada. I bet that's way lower than Honda or other foreign companies.

[FarCenter]

25. Ohio Hondas are 70 - 80% US content

Transmissions come from Japan. The audio systems, GPS, etc for all cars would come from the Far East -- high-tech stuff isn't manufactured in the US anymore.

[blue_onyx]

26. It's 70%

That's just one model. For the entire Honda brand, it's lower. Here's a quote from a USA Today article:

"Detroit's Big 3 derived about 77% of their parts from U.S. and Canadian factories from domestic sources. That compares with slightly less than half for Japanese brands overall, according to the Automotive Trade Policy Council, which represents the domestic manufacturers in trade issues. Among Japanese brands, Honda had the most domestic content at 59%."

http://www.usatoday.com/money/autos/2007-03-22-american-usat_N.htm


US companies may have some models that have a lot of foreign parts and that are made in other countries. Overall, however, US companies still have significantly more US content.

[FarCenter]

27. Content differs for Civic and Accord

The window sticker gives the domestic content and origin of the engine and transmission. I can't recall the exact figures for the Civic and Accord, but the models from East Liberty and Marysville, OH were above 70%.

The hybrids, FIT, etc that I saw on the lot were imported from Japan.

So go by the factory of origin and content shown on the window sticker. Otherwise you might get stuck with a Korean Chevrolet Aveo with an "An American Revolution" banner stuck on it.

[Romulox]

30. If I buy a Japanese car, it's going to be made in JAPAN.

Foreign profits + crappy American workmanship? Worst of all worlds! :eyes:

[FarCenter]

32. Given the right tools, manufacturing processes, product designs, and management

American workers can produce quality goods.

Repeat -- outsource management, not workers. Top management abroad is superior to US management, which is overrun with financiers, accountants, marketing execs, lawyers and similar scum.

[Romulox]

33. Japanese cars made in the USA are consistently lower quality than those made in Japan.

See, e.g., the recall plagued Toyota Tundra.

"Repeat -- outsource management, not workers."

Nonsense. If we aren't supporting Labor, then I'm shopping for the best deal, just like everybody else. It's pathetic for a scab worker at a Hyundai plant in Alabama to begin waving the American flag and braying "buy American!". :eyes:

[jody]

24. ROFL at those critical of AL's Hyundai, Honda, & Mercedes plants. American labor was used in them.

After that jab let me say I've had a belly full of using taxpayer dollars to bail out financial institutions and manufacturing companies only to see them move operations from states like MI that are suffering through a depression.

A pox on any elected politician who allows outsourcing of jobs and simultaneously in-sourcing cheaper labor for high-tech jobs.

Voters can stop this by electing 435 new congresspersons in 2010 and keep electing a complete new group of 435 every two years until We the People reclaim our government that corporatists have stolen from us.

[SpartanDem]

28. Yeah let's just forget

that majority of the engineering, design and marketing for those cars aren't done here in the US.

[Romulox]

31. Your post doesn't make any sense.

"A pox on any elected politician who allows outsourcing of jobs and simultaneously in-sourcing cheaper labor for high-tech jobs."

Why do you think manufacturing jobs left the North for places like Alabama? Cheap labor/little or no environmental regulation. It's a race to the bottom, and is a form of "outsourcing" imo. :hi:

[jody]

34. My post make sense unless you want to pit state against state. That's interesting because

WY with about 500k citizens has two senators, the same number as CA with about 37 million citizens.

That means the most populated states must compromise with the least populated states.

Guess which states have the per capita advantage?

[Psephos]

35. Two senators, but a proportionate number of representatives

It takes both chambers of Congress to pass legislation.

This arrangement of absolute representation for each State in the Senate and proportional representation in the House was explicitly designed to provide checks and balances among the several States. The Federalist Papers contain an fascinating account of the debates and opinions among the Founders that led to this structure.

http://www.foundingfathers.info/federalistpapers/

IMO, they got it right.

[jody]

36. I understand but sadly its the Senate that approves SCOTUS nominees and SCOTUS makes decisions that

are just as binding and even easier than trying to amend our Constitution that requires 3/4 of the states to ratify.

IMO that's highly undemocratic, 51 senators approve life time appointment to SCOTUS versus 3/4 of the states to ratify a constitutional amendment.

IMO, they got that wrong.

ON EDIT ADD:
That means 52 senators from the least populated 26 states with about 19% of the total population can approve a SCOTUS nominee for a lifetime position.

[bemildred]

29. Good, they can sell them overseas too. nt

[flvegan]

37. They also just axed almost every single "performance" (read: fun) car they build.

Save the Camaro SS, the Caddy CTS-V and the Corvette (all 3 models). All the other SS models are dead by the end of 2010. I was actually really growing to like that Cobalt SS.

[michreject]

38. Good

It seem that everyone supports import manufacturers and despises domestic.