Infowars has a story from the Latin American Herald Tribune that suggests GM could send bailout money to Brazil. The story quotes GM Brazil-Mercosur President Jaime Ardila as saying GM plans to invest $1 billion worth of American tax dollars in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market. “It wouldn’t be logical to withdraw the investment from where we’re growing, and our goal is to protect investments in emerging markets,” says Ardila. The money would be spent on a “complete the renovation of the line of products up to 2012.” This news comes on the heels of an announced $3.5b automaker stimulus by Brazil’s federal and Sao Paolo state governments. Of course, the whole plan banks on Congress approving an ammendment to the already-approved $25b retooling loan program. The Detroit CEOs have until December 2 to present congress with their plans for the $25b, and if those plans are approved Congress could remove all existing “strings” on the loan program. These strings currently require the funds to be spent on retooling American plants that are over 25 years old to build more fuel-efficient vehicles. So the question now is, will GM lie to congress and tell them that they won’t send taxpayer money to Brazil, or have they already lied to their Brazilian division? Or will congress simply look the other way? So many possibilities…
11 Comments on “Bailout Watch 235: GM Outsourcing One Billion Bailout Bucks To Brazil...”
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I was just in Brazil this October and had the misfortune to rent a Chevrolet Corsa “Classic”. This is a holdover from a mid 90s Corsa with a 1.0 liter engine, no power windows, doors, or steering, AM/FM radio (not even a tape deck) and the most rubbery transmission I’ve ever shifted. It was truly hateful, and the damn thing is that it costs new the equivalent of $15,000 US Dollars. How the hell anyone buys any car in that country is beyond me. A Honda Fit over there is considered a luxury car…
Wow.
Throughout this bailout GM has been incredibly inept, but this takes the cake. Of all the times for a Brazilian GM official to say he’s going to get money from American taxpayers, this is probably the worst.
Sometimes I think GM is just gloating. Like, it’s just having officials say things like this to prove that it can say and do anything it wants and nobody will ever say otherwise.
Then I get back to my senses, but seriously. I have no problem with American companies investing in other countries, but to ask us for money and then take it and invest our money in our countries… so they can sell better vehicles in those countries… while simultaneously giving us crap like the Aveo… wow.
Just one more reason why Rick Wagoneer and Bob Lutz should be shown a finger, not given a wad of taxpayers’ money. The sooner they are forced into Chapter 11, the better. Perhaps then the good people of Detroit will do what they should have done a long time ago – roll out the barrels of tar, and bring some feathers and pitchforks to the party.
Not to worry. GM board already decided that Chapter 11 is not an option. They are well aware of media blitz and scare tactic that will demand congress to subsidize salaries that are 10 times as big as Japanese counterparts for management and quadruple for UAW members.
Polosi wants to spend our tax dollars and by the time Bama will ride to White (?) House he will get education from party elders and will get on with the program.
The republican waste with Haliburton will be dwarfed by this money pit. Lets assume the position and pretend that we enjoy this ride.
My “aunt-in-law” works for GM in Brazil. I’m sure she’ll be happy.
I’m not sure exactly what GM is supposed to do.
* Take the bailout dollars and put them here where they are losing hand over fist & it won’t accomplish anything except going into the “golden parachute” benefits of retired workers.
* Take the money & put it in a market they ARE making money in and hopefully some of the money they make there will find it’s way back here.
What is the right solution?
Hey Robstar,
Why don’t you sit down with a tall coffee, turn on some Yani or some other such “new age” pleasant noises….burn some incense and illuminate the room with a red light…
…and just THINK….
Because here’s an idea for you to meditate on- and that is GM doesn’t *TAKE* ANYTHING!
Give it some serious thought, why don’t you???
(That is SUCH an appropriate term…I’m glad you git the nail on the head…and that is *TAKING*).
Ed,
Autoblog is running a denial by GM. They said that their Brazilian expansion will be funded by local operations. You might want to run an update to your post.
We contacted General Motors to check on the story and spokesman Richard James replied, “I don’t know if something got lost in translation but Jaime Ardila, President of GM Brazil did NOT say that funding for GMB projects would come from the US financial aid package. GM Brazil has $1 billion in investments that have already been approved but they will be financed by our Brazilian operations through local sources.”
Ronnie Schreiber :
I’m not buying it, and not just because GM PR has trained me not the believe a word they say.
Who’s going to invest in GM Brazil when the corporate mothership is about to go Tango Uniform? If GM had hived off its overseas ops and declared a NA C11– as recommended in ‘05– that might have been possible. Now? Fuhgeddboutit.
Robert,
The problem with not believing anything GM says is that the original report is attributed to GM Brazil-Mercosur President Jaime Ardila. Is he any more trustworthy, in your mind, than the folks he works for in the RenCen?
Regarding credibility, the link above goes to the web site of Alex Jones, who, to put it nicely, is a conspiracy theory crank 9/11 troofer.
The journalist who filed the story, Russ Dallen, is the editor of the LAHT, and appears to be a credible guy, but I’d find the report more credible if he provided an actual quote. The money excerpt, According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government is in Dallen’s own words and isn’t a direct quote.
I’ve used the LAHT’s contact form to ask Dallen’s response to GM’s denial and will forward any information forthcoming from him.
Robert-
That’s a crock. Look, you don’t have to believe them, but actually read what he said. They’re getting money from local sources, which will include money from the Brazilian government.
And I don’t understand why you guys don’t get it that GMNA is a pretty distinct entity from Europe and the rest of the world. While the other arms of GM get their direction from Detroit as far as operations go, they make their own business decisions and largely fund themselves. (look at Holden, which operated with little to no support from GM corporate prior to Zeta)