Car Guy

Outsourcing the Bailout

GM to "restructure" overseas -- using taxpayer dollars. 

By 5.15.09

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Here is proof that the proposed "bailout" of General Motors is just another shibboleth for using the American taxpayer to finance his own economic disfranchisement: 

GM will be given billions of taxpayer dollars, courtesy of President Obama and his "car czar" -- and encouraged to use this money to build new plants (and create new jobs) not here in the USA but in countries like China and Mexico.

GM's "restructuring plan" -- the details of which are just beginning to leak out -- projects an increase of almost 10 percent in overseas production (23.5 percent vs. the current 15.5 percent) over the next four years, with more to come later.

These cars (more than 730,000 of them annually by 2014) will be American-brand cars in name only. They will be built entirely in foreign companies using low-cost foreign labor.

Only the financing will be "made in the USA."

Arguably, a Honda built in Ohio by U.S. workers is more domestic than the legions of Chinese-built Buicks that will soon be heading our way.

United Auto Workers Legislative Director Alan Reuther notes: "The overall number of vehicles GM will be importing in 2014 [under the terms of the restructuring plan] represents the production of four assembly plants, the same number that GM plans to close in the United States."

The effrontery is startling.

It's bad enough that whole swaths of our industrial manufacturing infrastructure has already been dismantled and sent overseas in order to leverage the absolute highest possible profit margin out of finished goods -- the true cost of which never includes the vanished jobs and decreased buying power of American workers. But it's absolutely egregious that failed multinationals like GM are now demanding handouts in order to force the American worker to directly subsidize the process.

How, it might be asked, will Americans living on 35-hour no-benefits service sector workweeks at $8 per hour be able to afford the imported Buicks and Chevys whose assembly they'll be forced to help finance?

Ross Perot's 1990s-era prediction about a "giant sucking sound" -- much derided at the time -- has become an unmistakable reality. Who has benefited from the past 20 years of labor arbitrage -- the proper name for "free trade"?

GM is broke because American consumers are broke. And they are broke, to a great extent, because their incomes have been downsized and outsourced on the bloody altar of free trade -- arguably the greatest con of the past 50 years.

There is in fact nothing "free" about "trade" with unfree nations like China -- authoritarian gulags where workers are interchangeable drones, easily discarded and desperately willing (and often forced) to pull 12 hour shifts in return for a subsistence income. The profits earned thereby may add another million to a CEO's annual compensation package but serves to further degrade the standard of living of the average American.

This benefits no one -- including, ultimately, even the uber-rich.

Turning the American working and middle classes into economically ruined peons forced to "compete" with the masses of China, India and Mexico will not bring the quality of life of the average Chinese, Indian or Mexican up to American standards. It will, however, reduce the American standard of living.

This is what we want? This is what we are being forced by the IRS and the federal government to bankroll?

If GM is not going to invest in America, why should America invest in GM?

It's a fair question -- and one that deserves an answer from both General Motors and President Obama.

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About the Author

Eric Peters is an automotive columnist and author of Automotive Atrocities: The Cars You Love to Hate (Motor Books International) and a new book, Road Hogs.