GM got bailout, now ships jobs to China

Examiner Editorial

Saving General Motors from bankruptcy was among President Obama’s most frequently cited achievements when he ran for re-election last year. Democrats everywhere touted the company’s revival as proof of the 2009 bailout’s wisdom. That was then. Now, Obama has quietly released the auto manufacturer from a bailout requirement that it increase its production in the U.S. Instead, GM is spending billions of dollars building up its production capacity in … China.  

This is happening despite the fact that the Treasury Department has to date recovered just $36 billion of its original $51 billion loan to GM. By most analysts’ predictions, American taxpayers will be out approximately $10 billion when the remaining stock is sold off. Which is a long way of saying that it now appears that taxpayers paid $10 billion to make it easier for GM to accelerate its foreign outsourcing and send more manufacturing jobs to China.

Here’s what happened: In exchange for the bailout in 2009, GM promised to meet certain domestic car production targets over the next four years. The obvious point of this stipulation was to ensure that GM jobs remained here at home and weren’t shipped overseas. The production targets started at 1.8 million in 2010 and were supposed to rise to 2.26 million by 2014. GM repeatedly missed the targets, beginning with an 81,000-unit shortfall the first year. Production increased thereafter, but never quite enough to meet the targets. Last year, GM fell about 13,000 cars short of its 2 million target.

How did it do this year? GM refuses to say. But in February, GM announced in its annual report to shareholders that Treasury had agreed to “irrevocably waive certain of its rights” regarding the federal loan. These included “certain manufacturing volume requirements.” Guess what happened next? GM announced in June that it would stop releasing its North American production figures altogether. Its spokesman tried to justify this move with Orwellian doublespeak about how providing more information would result in “an incomplete data set to look at.”

The same month, GM announced it would boost its output from its China plants by 70 percent. It is not just selling Chinese-made cars to the Chinese, either. GM is nearly doubling its export production capacity there from 77,000 units to 130,000. It doesn’t take a Ph.D. in economics to see what is really going on. GM cannot make the domestic production targets and still turn a profit. It wants to be spared the embarrassment of having everyone know that. Obama, who is in this as deep as anyone can be, doesn’t want the embarrassment, either. So both buried the news.

It is yet more proof that Mitt Romney was right in the 2012 presidential campaign: GM should have gone through a traditional bankruptcy instead of the politicized farce of a taxpayer-funded bailout and government managed “bankruptcy.” The TARP funds involved could have instead been used to provide liquidity for a managed sale to a private buyer that minimized the opportunities for political interference in the new GM’s operations.

2 thoughts on “GM got bailout, now ships jobs to China

  1. I live in Ann Arbor Michigan. This year was my 55 birthday. I have been unemployed since 2008, not for lack of trying.
    In 2010 I returned to school and studied network operating systems. I got an Associate Degree and graduated with high honors. I also completed an Associate in Liberal Arts because I have a lot of interest in Psychology.
    Since graduating I have applied with probably 50 different employers and I am still hoping for an interview. I feel very frustrated because I went back to school to upgrade my skills, I have used, repaired, built and performed troubleshooting on computers for over 20 years and I enjoy it a lot.
    Currently I am between a rock and a hard place. I enrolled in two CISCO courses since I know that CISCO is more in demand in the workplace. However one course runs the whole semester and one starts half way through each is 4 credit hours. I am using financial aid to keep me alive while I try to acquire the credentials to become employed. However student loans cannot be dispersed until or unless I am currently in 6 credit hours. Well it is half way through the semester, bills are piling up and now they tell me cisco may not let me take two courses at the same time. So I will not get my loans at all and I will looking at losing my apartment, because I tried to do something to improve my life.
    At this point I am ready to just get a tent and a sleeping bag somewhere and give up, because all the doors to get back on my feet seem to be closed. I have about used up my persistent and positive outlook.
    Anyone have any ideas?

    1. I don’t doubt one word of what you have said. You are a part of the great culling of the baby boomers. The “greatest generation” as we paid in more to the social security system than any generation before us. We were closing in on the end of our careers and our retirements.
      These socialist bastards intend to steal everything we have paid in as they intend to try and kill us before we ever get to collect. Don’t forget they have already said they intend to start rolling back the retirement age. They intend to deny us health care through the Affordable Care Act, which is just about as affordable as the Patriot Act is patriotic.
      Pitiful as it is, the only advise I could give you is to not over think it. You are going to have to survive. I would focus on finding the best work I could as fast as I could and then readjust my plans to suit my situation as I work to change it.
      You were screwed because you are an American national and those who have stolen your estate, inherited from your grandfathers, want you dead because if you take it all back, they are left holding the bag with a hemp rope around their neck.

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