Bailout Watch 546: Argentina Snags (Relative) Bailout Bargain
Bloomberg reports that Argentina will loan $70 million to GM out of its $24 billion recently-nationalized social security fund. In return, GM has promised to use the money to complete the Brazil-based development of the forthcoming Chevy Viva. And according to Argentinian president Cristina Fernandez DeKirchner, “one of the conditions we demanded to provide this loan is that all the auto parts used in this project have to be locally made.” As we reported earlier, GM claims it will produce the Viva in the US. With no apparent guarantees about parts sourcing.
If Argentina can secure such guarantees for $70 million, one might think that the USA’s $50 billion (and counting) investment might earn some kind of concession along these lines. Meanwhile, the argument that GM’s US-based development jobs are somehow economically significant enough to justify its bailout look increasingly less plausible. Given that many of GM’s forthcoming products are being developed outside the US (Viva in Brazil, Cruze in Korea, Buick Regal in Germany, etc.), what exactly is the difference between GM and the transplants again?
Histrionics aside, thanks for the input. A report back in October said that "The new [midsized] was designed in the Design Center GM AM , located in Sao Caetano do Sul, Brazil . Its development was designed exclusively for the region, but also some aspects that will help entry to other markets." Either way, I imagine you'd agree that the bailout has done little to reverse the hollowing out of GM's US-based design/development capability.
"Buick Regal in Germany" ??? i assume China. 100 locally made? Including chips cause i didn't know that they had foundries down there
I think there's a bit of confusion there. A car may be developed in (say) Australia for sale in India, and the CAD of the car may be done in Oz (or at least design direction will be in Oz, the CAD guy could be sitting anywhere in the world), but I'd expect the tooling development and drawings to be done by the part manufacturer, who in that case is likely to be in India. So I think you are both right, in my experience. Oh and O/T, yay for the return of the short article!
Histrionics? Nice way of putting things in perspective for me(note sarcasm). I would agree the bailout didn't stop the trainwreck but GM cannot be allowed so simply wither and die. The transplants you seem so fond of have ZERO use for people of my ilk (and there are alot of us). I have been in my line of work for 14+ years and have yet to work on 1 single Toyota or Honda project despite many attempts over the years. Comparing the transplants contributions made to the US and GM's contributions is laughable. A bunch of low-skill factory jobs in scattered, isolated plants in the US south pales in comparison to the entire regions dependent upon GM. I can understand someone from the outside not grasping whats going here but at least get the facts straight.