Adding insult to injury, GM will import cars from China
Filed under: Company News, People
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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Reader Comments (Page 1 of 1)
5-14-2009 @ 9:44AM
Jporter said...
One of the few things that has kept GM from crashing and burning years ago has been its ability to leverage the made-in-America sentiment. This takes the wind out of those sails and they will have an tough time coming out of this without that crutch.
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5-14-2009 @ 9:25AM
bobby duncan said...
I guess when you are to stupid to build a dependable car you have to secure inventory from a reliable source.
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5-14-2009 @ 9:39AM
Ron said...
The employees of GM have stated for many years that the jobs should stay in the US. When will the auto companies realize that the more they lay off the more sale they will loose. What dopes. We say bring back jobs to the US and I am sure that when/if they do the union will take an active role in the every day operations of the company. Meaning they will look closer at the ones that are abusing the system. But without jobs in the US there is no one left to buy their cars. Sucks to be them!!!!!!
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5-14-2009 @ 10:16AM
shelly said...
Well, that was a wast of a few billion American tax payer dollars given to GM. GM needs to repay our bail out tax dollars. And let China financially support GM's restructuring from now on.
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5-14-2009 @ 10:45AM
Deela said...
What a shock. Those ignorant union workers didn't REALLY think their company and the Liberal party really gave a $hit about THEM, did they?
And as for #4 comment, um, yeah. Of course it was a waste of money. So was flying the Airforce1 stint over New York...that cost millions; and then there's the posing with Biden for a burger stint; heard that cost a quarter of a million.
Liberals are so stupid, they think Obama will just print money and everything will be okay.
I wouldn't bet my last dollar on anything Obama says, does or thinks the next couple years.
We haven't seen ANYTHING yet.
And Bush...I'm not letting him off the hook. He should have vetoe'd the Liberal controlled House these last years, that's for sure!!
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5-14-2009 @ 11:04AM
Garrett Blair said...
I agree 100% with letting GM get their bailout money from the country they are moving the jobs to.Why should US taxpayers fund a company that is not loyal to US workers.This whole overseas thing has never made since to me in that it is destroying the very economy that they expect to sell their product in.Guess we should just buy the Toyotas and Hondas being built here now.
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5-14-2009 @ 11:54AM
jmath20 said...
I am not going to buy a car (I'm shopping now) or anything from any America company that does not support AMERICAN workers!!!!!
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5-14-2009 @ 1:29PM
lj dejan said...
hmmmmmmmmmmmmmm
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5-14-2009 @ 3:15PM
michael said...
I was born in Detroit in 1958 and I have owned several General Motors cars. I cringed at the thought of my favorite NASCAR competitor going bankrupt but now I think after the latest news the US government should just pull the plug and not give them any more money. Goodbye General Motors
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5-14-2009 @ 9:49PM
ml said...
So what's the point? Question all you want. Gm gets theirs on your tax dime, the union gets booted off the payroll via closures and layoffs. GM ends up making more money with a stamp of approval from the administration and all the rest of you get to put lid on the koolaid and hang on for the downhill portion of the rollercoaster ride.--- It will take a bucket of money to buy little Chinese cars with the inflation that's coming.
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5-15-2009 @ 11:29AM
Jan said...
Unbelieveable! Bailed out on US taxpayer money so they can go make a profit off labor from China. I live in Michigan and the auto industry has gutted our economy. We the people should put a stop to unfair trade of any type that impacts our livelyhood. We don't need anymore foreign junk. Put America back to work.
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