What if the government claimed it wanted to bail out a major U.S. corporation with taxpayer funds in order to save jobs? Most of us would be behind that, right?
But, what if it turned out that major corporation was actually planning on sending those jobs to China not keeping them here, in the good old USA?
Well, that’s just what happened with General Motors.
The auto giant is getting billions in your money and they’re taking the cold hard cash and sending it to China to build cheap cars.
This from the Wall Street Journal today:
General Motors Corp. plans to start importing Chinese-built vehicles into the U.S. in 2011, according to an outline the auto maker submitted to the U.S. government.
GM currently makes vehicles in China for sale in Asia. But the Detroit company plans for the first time to ship some of them to the U.S. to save on manufacturing costs.
GM told Congress that the company plans to ship 17,335 Chinese-built vehicles to the U.S. in 2011. That figure would jump to more than 38,000 in 2012 and more than 53,000 in 2013, the document states. Imports from other countries, including South Korea, Japan and Mexico, also would increase.
Am I missing something? It’s got me scratching my head. Are you scratching your head too?
What have all these bailouts been for anyway? It turns out the financial services bailout did more to enrich bungling executives than secure jobs for the working stiffs. And now, GM’s news. They’re saying “thank you for the money Uncle Sam. See ya later.”
This news today is a double whammy for so many Americans. Weekly jobless claims came out today as well and they show a bigger than expected jump to 637,000, and the number of people that have to stay on unemployment hit yet another record last week.
Once the U.S. government reviews GM’s outline, hopefully someone will put the kibosh on taxpayer-funded outsourcing.
What an irony. We end up having to pay to send our own jobs overseas.
May 14th, 2009 at 2:17 pm
I agree that it is a double-whammy, and I see the irony, but what other options would you suggest to these troubled automakers. For better or for worse, our labor cost are much higher here than in China. If the companies are to survive, they need to cut costs significantly.
You and I likely agree that much can be cut from the top (executive compensation and benefits), but we cannot ignore that labor and benefits here are a significant factor. I’ll avoid getting into a tirade about American auto manufacturers not being innovative enough, but I mention it here just so it will be known that I’m not trying to pin this solely on organized labor.
I think the hardest thing for any business or employee is to give up something you’ve had for so long that it feels like it’s rightfully yours. For unions, the long-term security that accompanied most of their labor contracts may just be one such thing. Current circumstances make it clear that the automakers can’t afford what they’ve been paying–both to their executives and to much of their labor force. The question then becomes, “What can they do to stay viable?”
I won’t claim that outsourcing the manufacture of cars is their only option, but it is a fairly simple one, thus an easy decision for management. What I would love to see is a group of veteran employees coming together to pitch new ways to build more efficiently, perhaps even with a new compensation system. If cars from China aren’t the answer, we need to see a lot more hands in the air offering alternatives.
May 14th, 2009 at 2:40 pm
Have you seen the recall list lately on products made in China, tainted toys, defective garden furniture. (http://www.cpsc.gov/cpscpub/prerel/prerel.html)
Latest from the Consumer Product Safety Commission:
“Folding Toy Beach Chairs Recalled by Build-A-Bear Workshop Due to Laceration Hazard”
and
“Mattel Recalls ‘Sarge’ Die Cast Toy Cars Due To Violation of Lead Safety Standard.”
I don’t know about you, but if they can’t get toy cars right, would you be willing to put your kids in a real car made in China?
May 15th, 2009 at 10:06 am
You raise valid concerns, but wouldn’t a company like GM have the internal controls in place to ensure that the cars are made according to company and US standards? After all, they know that a safety-related recall could be devastating for the company in the best of times, even more so given their current financial straits.
I’m not as familiar with how well Mattel’s manufacturing processes are integrated with corporately controlled quality standards, but would venture that sourcing for toys in China is handled differently than for major appliances and automobiles.
I’m not suggesting that there would be no risk. I just believe that the players in this game would have too much on the table to leave some sourcing issues uncontrolled.