Detroit bailed out, GM moving jobs overseas

Over the last few months, it has become more and more apparent that bailouts from the Bush administration and the Obama administration haven’t gotten anywhere near their intended goals of saving jobs, keeping companies from bankruptcy and improving market conditions.

The latest news from General Motors is a perfect illustration of that.

The AP reports:

DETROIT (AP) – As thousands of General Motors workers await word on more U.S. plant closures, reports that the company plans to import Chinese-made vehicles to the U.S. have created a political problem for the automaker and the White House.

The reports, which GM will neither confirm nor deny, could mean trouble because GM is supported by $15.4 billion in U.S. government loans, largely due to the Obama administration’s desire to preserve the company’s 90,000 U.S. jobs.

The United Auto Workers charged last week that the Detroit automaker intends to almost double over the next five years the number of vehicles it imports to the U.S. from Mexico, South Korea, China and Japan.

“GM should not be taking taxpayers’ money simply to finance the outsourcing of jobs to other countries,” Alan Reuther, the union’s Washington lobbyist, wrote in a letter to U.S. lawmakers.

The bailouts did not stop the inevitable and necessary bankruptcy of General Motors as President Obama said they would. In fact, now we’re in a situation where American tax dollars are going to subsidize General Motors jobs overseas, exactly what the Obama administration doesn’t want.

The bottom line is that taxpayer dollars should not be used for these purposes as they were never intended for it. GM had such issues which could only be solved with bankruptcy, not more bailout dollars and many people saw that ahead of time. Throwing money down a rat hole in hopes it will turn into something else is a waste, and that’s exactly what happened here.

On Wednesday, Shanghai Securities News and other Chinese media reported that GM plans to begin exporting vehicles from China to the U.S. within two years, ramping up sales to more than 50,000 by 2014.

GM spokesman Tom Wilkinson in Detroit would not comment on the reports. The White House and Treasury Department did not immediately respond to requests for comment.

“GM is reviewing various options,” GM’s China office said in a written statement received Thursday. “We are not discussing details of our future portfolio, beyond what we have disclosed in auto shows and our viability plans.”

I don’t blame GM for moving production overseas since they are getting strangled to death by the United Auto Workers union. Unfortunately, the union acted counter-productively in squeezing GM with no concessions for so long that they have been a big factor in this outcome. GM management has also been fairly incompetent as well allowing this to go on for so long when it was evident problems existed in the 1990s.

I do, however, blame the federal government for wasting my tax dollars on a failing company which needed to file bankruptcy and become profitable again.

In this respect, the bottom line is that bailouts do not work as intended nor do they improve conditions when they do not address the root cause. The issue is not that GM was losing money, the issue is why GM was losing money. That wasn’t addressed, it was only exacerbated with taxpayer funds for a few months.

  • D.D.Mao

    Hmmmm…….President Obama wants to close 3000 Chrysler dealers and General Motors wants to move jobs overseas! I wonder how “THE ONE” is going to spin these as JOBS SAVED?

  • They’ll be jobs saved for the “world economy” and since we’re all citizens of the world, we have helped our neighbors get through this recession. We should be thanking President Obama for sending jobs overseas since they’ll need them more than we will since we’ll all soon be living off the government.

    Actually, technically you could call them “jobs saved,” just not saved here in the US so that might work for Gibbsy in the press room.

    Is that enough spin? 🙂

  • Bill Hedges

    My perspective of Republican ideas is to leave business alone with least regulation that is prudent.

    “GM should not be taking taxpayers’ money simply to finance the outsourcing of jobs to other countries,” Alan Reuther, the union’s Washington lobbyist, wrote in a letter to U.S. lawmakers”

    Alan Reuther is right. Though I know he will differ in my beliefs. Money should not have been given. Bankruptcy was correct answer. And unfettered by government corruption whose obvious desire to buying votes. Let Judege work out details to save jobs without prejudise and political gain.

    Obama, and the Unions power over him due to campaign contributions, lead to another disastrous reaction by our smart President.

    While many in Wall Street are begging to pay back loans, Obama’s other Campaign supporters like many Unions, Right to Kill, and Acorn organizations are lost Trillions of our borrowed Chinese dollars.

    Had Obama been without political bought and pay for obligations, our President (who is so much smarter than Bush) would surely have handled this better. Although I have not see any well thought out plans with held terrorist, etc..I only hear,,,he will annouce…

    I am not at his level intellectually. For sure. As I understand it, wage cuts were minimal for seasoned workers at GM. I only heard talk of cuts in recent hires.

    Obama approved of not checking Union bookkeeping. Why. Should I guess.

    Management was certainly at fault. Giving in to Union demands, wasteful behavior, bad planning, management bonuses, wrong car produced for buyers, etc..
    …..

    Univerities are saying Obama has not accomplish enough to receive honary degree. Is this sign our resent Tea party is flowing in our Nation’s vein…

    “It’s time for change in America”
    Bill Clinton

  • D.D.Mao

    Nate……”They’ll be jobs saved for the world economy and since we’re all citizens of the world”

    I forgot President Obama is “DAVOS MAN” and according to his speech at Arizona State commencement last night we all should work for NON-PROFITS anyway.If an idiot like Gibbs could grasp this I should have.

    My head hurts from the spin!

  • JD

    Isn’t that free enterprise… to go to a 3rd world country, take advantage of them, ship the jobs over seas, and all the while sending the product back to the US.

    Thus making it imposable for the small local companies to compete against them.

    Also, my brother lost his job at GM the other day. he is not apart of the Union. Today GM announces what dealerships are closing world wide. 🙂

    SHould be interesting.

  • “Isn’t that free enterprise… to go to a 3rd world country, take advantage of them, ship the jobs over seas, and all the while sending the product back to the US.”

    See, you say “take advantage of them” as if local workers in wherever aren’t being paid for their work. They are, and often the same or better than what people will make in that area. Furthermore, what do you want GM to do? The unions have made it too costly to do business in America due to legacy costs and such. Liberalism has forced GM into bankruptcy, someone needs to say it.

    You’re the kind of person who likes to scream about outsourcing jobs but you ignore insourcing.

    For example:

    Myth #6: Outsourcing is a one-way street.

    Fact: Outsourcing works both ways.

    The number of jobs coming from other countries to the U.S. (jobs “insourced”) is growing at a faster rate than jobs lost overseas. According to the Organization for International Investment, the numbers of manufacturing jobs insourced to the United States grew by 82 percent, while the number outsourced overseas grew by only 23 percent.[5] Moreover, these insourced jobs are often higher-paying than those outsourced.[6]

    Read more myths about outsourcing here:

    http://www.heritage.org/Research/TradeandForeignAid/wm467.cfm

    “Also, my brother lost his job at GM the other day. he is not apart of the Union.”

    Too bad, union execs will keep their jobs since Obama wants the union to succeed.

    My condolences to him and best of luck in the job market. He should take his severance package, treat it like a sign-on bonus, and find an even better job than he had. Take it as an opportunity.

  • JD

    No one said it is a one way street with out sourcing but there is more than one theory on how to build a global economy. Lowering ours to compete in others is not the one I agree with.

  • D.D.Mao

    JD…….Then why do you want to lower the producers of wealth in AMERICA in order to compete with the SUPPOSED TAKEN ADVANTAGED OF”? How about raising the have-nots instead of lowering the haves.

  • Bill Hedges

    JD

    “Lowering ours to compete in others is not the one I agree with”

    What do you agree with

  • D.D.Mao

    Here’s an interesting article which says that unemployment is at the same level WITH THE STIMULUS PACKAGE BEING PASSED that President Obamas people predicted it would be IF WE DIDN’T PASS THE STIMULUS.The article is entitled “Was the Stimulus Irrelevant?” by Edward Morrissey.It can be found at:

    http://www.americanissuesproject.org/blogs/columns/archive/2009/05/14/was-the-stimulus-irrelevant.aspx

  • Thank God I am a Nurse. 🙂 My pay keeps going up each year while we get more and more unhealthy people. 🙂

    It is unfortunate when people fail to get a college education so that their develop careers that do not depend on a single place of employment. Example, as a nurse, even if I lost my job this minute, I would be working within hours somewhere else.

    Another unfortunate thing is how expensive it is to receive an education in this country. Even more on that it is a shame how even the US government is praying upon poor college students with these student loans that people end up paying back for their first 10 years in their career.

    If Obama wants to throw away money somewhere, why not throw money at Graduate School students. At least he can be assured that the money will not likely be wasted. If someone finishes their undergraduate studies with say a 3.5GPA or higher and are seeking Graduate Studies in fields that are most likely to assist our country, I’d find that to be a useful investment, rather than wasteful government spending.

    To heck with green light bulbs in schools, lets give money to the hard working people so that can work even better for their country. Hell I am willing to sign a contract saying that I will stay within the United States and work at an approved health care facility or county for said amount of years to receive government grant money to pay for Medical School.

    But do we hear of such ideas from government? Nope.

    Perhaps some of these countries acquiring outsourced US jobs will ask for less money from their Graduate School Students and I’ll just run off to their Medical Schools and help the sick people of their country since mine wants to change me 100’s of thousands of dollars to go to school here.

  • Bill Hedges

    Kendale Sturdivent

    Obamaites won’t fall for your plan. We must help the ones who don’t help themselves.

  • Longwon

    I only buy things made in America because we must support our neighbors, our comunity, and our country, or simply follow the herd of mindless sheeple buying foreign products and watch America slowly crumble.