Adding insult to injury, GM will import cars from China

Now that General Motors (GM) has pushed out tens of thousand of United Auto Workers and negotiated to cut their pensions and health care benefits, the car company will begin to import vehicles from China. The move will save GM money because of the lower cost of labor in the world's most populous nation.

According to The Wall Street Journal, "GM told Congress that the company plans to ship 17,335 Chinese-built vehicles to the U.S. in 2011." That number could triple by 2013.

UAW members and workers laid off in other industries will almost certainly question why bailout dollars are used to restructure companies that send jobs overseas.

Federal loans to GM may keep it in business, but the workers it has fired, and will fire, have paid taxes that, in essence, help the Treasury fund the rescue of banks and industrial firms. In many cases, the laid off workers will no longer be taxpayers, cutting IRS income and putting a greater burden on people who remain employed.

There has not been a clear analysis of the effects of firing people in industries that receive federal aid. It may well be counter-productive to have the country pay unemployment benefits and lose tax revenue while handing out billions of dollars to keep GM afloat.

And supporting employment in China would appear to do little or nothing to help the U.S. economy. It just pushes profit margins at GM a little higher in exchange for laying off American workers. That is a bit of perverse math.

Douglas A. McIntyre is an editor at 24/7 Wall St.


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