Bailout Watch 523: GM to Boost Foreign Production 98%

Robert Farago
by Robert Farago
bailout watch 523 gm to boost foreign production 98

The Detroit News has obtained a confidential memo from GM to federal legislators. The smoking gun reveals that the soon-to-be-taxpayer-owned (officially) automaker plans to boost US sales of vehicles built in China, Mexico, South Korea and Japan by 98 percent (to 365k units). In the face of union criticism of the plans, GM claims that the percentage of its imports will remain at 33 percent. By 2014. When its sales recover to 3.1 million vehicles per year. Providing it maintains its current market share. All things being equal. With the wind in the right direction.

At the same time, The General aims to shrink production in Canada, Australia and European countries by about 130k. For a sneak peak at the less tortuous justification for this outsourcing on Uncle Sam’s dime, we turn to veteran Detroit apologist and Washington Post car critic, Warren Brown . . .

[Fair disclosure: before TTAC was born, I sent Warren Brown one of my car reviews. He was appalled. He recommended I abandon pistonhead punditry and pursue a career in pest control. Or something like that.]

While foolish consistency is the hobgoblin of little minds, uh, you gotta admit Warren’s defense of the indefensible has been completely consistent—no matter how evasive or weak the logic deployed. These days, he believes GM is the hapless victim of bad luck. Direct quote, that. Who better to tell John Q. Public why it’s OK to give GM bailout billions when they’re planning on building abroad.

Here’s an excerpt from a highly edited online Q&A addressing this timely topic:

GM’s Plans: From this morning’s Post: “According to an outline the company has been sharing privately with Washington legislators, the number of cars that GM sells in the United States and builds in Mexico, China and South Korea will roughly double.”

How can a UAW/US-owned company get away with this?

Warren Brown: Get real:

Had it not been for GM of Europe and Ford of Europe, had it not been for more integrated global operations, the domestic companies would have been facing bankruptcy long ago.

How can a U.S./UAW owned company get away with this? A three-word-answer, “The American Consumer.”

The American Consumer does not care about “buying American.”

The American Consumer does not bother to “look for the union label.”

The American Consumer wants the best stuff for the lowest price.

That is why notoriously anti-union Wal-Mart is the biggest retailer in the United States, including in UAW strongholds such as Michigan and Ohio.

It’s why the American car companies are struggling to hold onto 44 percent of a home market they once dominated.

Stopping U.S.-based car companies from bringing in cars The American Consumer wants will surely kill those companies and the union-repressented jobs they provide stateside and overseas.

What the UAW needs to do is organize the rivals of the American car companies. The UAW’s persistent failure in that endeavor puts the American car companies at risk.

What unions in general need to do is form a strong, truly international union to keep companies, foreign and domestic, from playing worker against worker in their endless hunt for the cheapest possible labor.

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  • Kurt. Kurt. on May 11, 2009

    I almost never agree with Brown but in this exerpt, I do. GM is hoping that by bolstering it's sales in growing markets or in areas that actually make a profit, they will be able to keep the lights on for the American employees to build cars for the American market. China is GM's future. China's sales went up something like 48% last month. I think it's GM's only chance at success.

  • Gossard267 Gossard267 on May 11, 2009

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