By on November 15, 2009

(courtesy mexico-travel.com)

First, let’s get something out in the open.The Detroit Free Press’ story on the jobs impact of Uncle Sam’s Motown mega-order forgets to mention one salient fact. As TTAC reported back in June, one-third of the 17,600 vehicles ordered from Chrysler, Ford and GM were/are/will be assembled outside the United States. Any article about the order’s effects on American jobs should begin with that fact, which this one has. Surprise! The federal fleet sailing to The Big Three’s rescue did no such thing for American autoworkers. “The overriding purpose of the stimulus was to jump-start the economy and create jobs, though Obama never claimed the vehicle purchases would create jobs. While the latest reports from stimulus recipients show all three carmakers getting orders totaling $270 million so far, job creation from the purchases was nil.” Don’t you just love it when the media pre-apologizes for the President? How about when a major manufacturer lies about its federal blessing to please its federal taskmasters?

In its report, GM initially said the $88 million it had received to date for 5,279 vehicles shipped was responsible for creating or retaining more than 105 jobs.

But the company told the Free Press last week that, as was the case with the other automakers, employment actually “remained static” and the order was incorporated into regular production.

“The government asked us to attach a number of employees to fulfill the order,” said GM spokesman Greg Martin. “The bigger and more important picture is that regardless of where vehicle orders come from, the line continues to run and people continue to work.”

We lied, but the bigger picture is that it doesn’t matter. Riiiiiight. It’s the perfect set-up for the nationalized automaker’s financial results, released tomorrow.

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20 Comments on “GM Admits It Lied about Federal Stimulus Package’s Job Creation...”


  • avatar
    kaleun

    It might be the case that GM actually just filled out that number to comply with federal regulation.
    I work for a city and we receive stimulus money for streets, energy efficiency etc. The applications include data to how many jobs each project will create. In the beginning of the year we didn’t know how to calculate that, I mean you build a street, someone brings gravel, someone maintains the trucks for that… but later the feds clarified that they assume one job for every $ 97,000 (don’t quote me on the amount) and basically told us we should enter that amount. they could have just taken the dollars we received and divided by that amount themselves. But the government think it has more weight when the applicant enters the amount (that they tell you to enter). There is a buy-America clause… but that includes all countries we have governemntal trade agreements with (not china, they are in the WTO, but not in the governmental procurement agreement part). so GM probably did exactly as the feds told them how to fill out that application, and Mexico was legal. I’m totally against GM/Chrysler and the whole mess… but wanted to clarify this as GM migth have been forced to use that amount. the whole job creation numbers are really hard to calculate and several PhD students could do that and all come up with different results. It is a loss for the government anyway, because now they are stuck with worthless vehicles that will cost us much money to repair and maintain. Should have bought Toyotas built in the US :-)

  • avatar
    holydonut

    In the original report they pledged that they would be “creating or retaining” the jobs… and now they claim to have retained them.  Did I miss something?

  • avatar
    John Horner

    ” … for creating or retaining more than 105 jobs … “

  • avatar
    SegwayCop

    For most people, as long as the word “bailout” is never used, than it’s not a bailout.
    Just call it a reverse tax-refund and the people cheer!

  • avatar
    ronin

    The overriding purpose of the stimulus was to bail out banks, including GMAC, and buddies in banks.  In fact, that was the only purpose.  Everything else was marketing.

  • avatar
    lw

    The “stimulus” is simply too small to create new jobs.  First you would have to get the current shifts at the current plants back to full capacity, then you would need to order enough vehicles over a sustained period of time that a manufacture would add more shifts.
    Now if you really want some stimulating going on, you would pour enough cash on the fire to drive the manufacture to reopen a plant.
    I’m thinking $150B per year for the next 15 years on just cars from the GM, Ford, and Chrysler would do the trick.
    For perspective, if we spend $30K average on a car, and us consumers buy 10M units per year, we are spending $300B a year on cars.  Down for $450B when times were good.
    So $150B is just bringing things back to par.  To really light it up, $250B+ per year should do the trick.

  • avatar
    mtypex

    What, did people think the automakers would open plants in California and Rhode Island and hire local unemployed workers to make 17,000 cars for some government contract? Everyone knows that the assembly plants are in Canada and Mexico.  What a joke.

  • avatar
    lw

    mtypex:  Exactly…   UAW labor is way too expensive compared to Mexico.
    I think 2011 with the UAW negotiation will be very interesting.  Unless the UAW can unload it’s majority share of Chrysler, I think Ford could make the argument that the UAW is a monopoly and is using it’s monopoly to unfairly support Chrysler with lower costs to benefit it’s interests and penalize it’s competitors by charging them more.
    Imagine Obama being forced to allow other Unions / Labor pools to compete with the UAW! :D

    • 0 avatar
      Russycle

      Not just UAW labor…US minimum wage is too expensive compared to Mexico.  A quick Google  didn’t turn up any current data, but in 2001 the average factory job in Mexico paid about 2 bucks an hour.  So should we reduce our standard of living so we can comptete?  Actually, I guess we’re on our way.

  • avatar
    jmatt

    lw said:  The “stimulus” is simply too small to create new jobs.

    Ya, a mere trillion?  They really need to spend several trillion more and have UAW members dig a gigantic hole somewhere in the Michigan wilderness and then fill it back in.  This is the kind of sensible economic policy the country needs, not more blather about productivity and market competition.

  • avatar
    stuki

              You’re looking for jobs in all the wrong places.
     
              All that money pumped in to prevent Goldman Sachs et al from taking losses on GMAC loan portfolios, will keep reliably Democratic New York luxury store and art gallery sales staff employed once it gets paid out as bonuses to the ones it was intended for in the first place. Heck, even other parts of the country might get a drip, when the Wall Street welfare queens’ increased demand for vacation lodging sends a few shekels to unionized luxury hotel workers over Christmas.
     
              Besides, GM is government now. And lying in order to appropriate the fruits of other people’s labor is what government does.

  • avatar
    ZoomZoom

    I try not to think of all that money going to waste.  It just drives me nuts.  And I can’t figure out who the f*ck this “Mike” is on all the stupid GM commercials.  And Howie is lame.  He is easily shown up by the “little big girl.”  I watch football to take my mind off this crap, but GM is using my tax dollars to ruin my football games.

    On the positive side of things, I wish I had a hat like that!

  • avatar
    Steven02

    @ Robert
    For someone who gets upset about morals in journalism, this “news” is amazing.  The gov’t ordered cars.  The gov’t asked the car companies how many jobs it created or retained.  They provided a number.  It happens to be what was retained.  Where is the lie?
    BTW, the gov’t order the vehicles, it wouldn’t be too hard for them to find out where the vehicles would be assembled before they placed the orders.  If you want to blame someone for this, sure do it.  It would just have to be the gov’t for not doing its homework, something the gov’t, republican or democrat, is very good at.

  • avatar
    John Horner

    Some people just like to get angry about things. When some of the stimulus legislation included Buy American provisions, most conservatives/libertarians screamed PROTECTIONISM, GREAT EVIL. Then another government purchase doesn’t require the products to be built in the US and the choir screams LIARS, THEY ARE SENDING WORK TO MEXICO AND CANADA. The common thread is anger. Fear and anger are not humanity’s better angels.
     

  • avatar
    GS650G

    There are cheaper ways to keep 105 people working and paying their bills (and taxes) than spending 270 million dollars of other people’s money.
    Next time people vote for someone who promises things (but doesn’t specify how or what) maybe they will use their heads a bit and realize the entire idea of government bailing out and saving jobs with millions of dollars is not a good one.
    It doesn’t matter if the jobs saved were US, Mexico, or Timbuktu because it’s a bad idea for the government to politically “save jobs”. It’s not an elected representative’s purpose to save anyone’s job, that’s a personal problem.
    Sound harsh? Sure, but in the end we are responsible for finding our jobs, not a Senator or a US President. And we have spent a trillion dollars we don’t have to keep a handful of people employed. That’s wonderful news for the beneficiaries, but not good for most of us. Let this be a lesson in Objectism for today.
    These car companies need to either make money or die. Simple as that. At least Ford borrowed a pile of money to help itself while the other two waited around for “Mommy” to bail them out.

  • avatar
    ZoomZoom

      

    GS650G
    There are cheaper ways to keep 105 people working and paying their bills (and taxes) than spending 270 million dollars of other people’s money.

    Government stupidity.
    That works out to 2.57 million per person.  If we’re giving away money, why not just give them 1 million each to start a new business?  Then we could have started 270 new businesses rather than prolong the layoffs of a mere 105.

    EDIT: Maybe I’d start a hat business. :)

  • avatar
    FleetofWheel

    John, I think the left uses fear and anger to sell most of their interventions and programs.
    Fear of a major car company going under, anger at large vehicle owners, anger at big banks, fear of housing prices falling to true market levels, anger at wealthy people being allowed to keep too much of their own money, and so on.

  • avatar
    Lumbergh21

    I saw the reports of inflated numbers of jobs saved coming way back at the beginning of the year when we were asked to estimate the “number of jobs created or retained by the project.”  We were encouraged to estimate as high of a number as possible.  For instance, a small project requiring three contractors for two weeks created or retained three jobs (never mind that it was only for two weeks).  I was discouraged from estimating the number of man hours required and dividing that by 2,000 (work hours per year), as that would have resulted in much lower numbers, which would not look good for the administration providing us with the dollars.

  • avatar
    Steven02

    @ GS650G and ZoomZoom

    88M went to GM, not the 270M that was spent total.  Not that this makes it better, but it is the stimulus math of out gov’t.  Except they are in the trillions of dollars to create or save jobs, with very fuzzy math.

  • avatar
    GS650G

    OK, that is so much better. we only spent 838K to save those precious 105 jobs.
    Boy,  was I jumping to conclusions about the wisdom of Keynesian government.


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