The U.S. government is pouring billions into General Motors in hopes of reviving the domestic economy, but when the automaker completes its restructuring plan, many of the company's new jobs will be filled by workers overseas. 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. The proportion of GM cars sold domestically and manufactured in those low-wage countries will rise from 15 percent to 23 percent over the next five years, according to the figures contained in a 12-page presentation offered to lawmakers in response to their questions about overseas production.
As a result, the long-simmering argument over U.S. manufacturers expanding production overseas -- normally arising between unions and private companies -- is about to engage the Obama administration.
Essentially in control of the company, the president's autos task force faces an awkward choice: It can either require General Motors to keep more jobs at home, potentially raising labor costs at a company already beset with financial woes, or it can risk political fury by allowing the automaker to expand operations at lower-cost manufacturing locations.
| It also creates more problems for GM in trying to re-build a brand identity. You won't be able to sell a South Korean-made car as a Buick or Cadillac, so they'll all be Chevys (Pontiac, Saab, Saturn and Hummer are gone in this scenario). This means that all the foreign-made cars will be Chevys, just about, and that will further tank Chevy's brand. As evidence, I give you the Daewoo-made Aveo (you'll give it back, don't worry). |
| Wonder if Bob mentioned that happy thought to his friends currently in power in Washington ... |
| That's the second question. First question: why exactly are we saving GM to begin with? |
| Because Chrysler can build cars that are just as crappy as Fiats, and has ... |
"The bottom line is GM would rather pay $2 an hour -- and it's a slippery slope downward," said Alan Reuther, the UAW's legislative director. "If GM is going to be getting government assistance, they ought to be maintaining their manufacturing footprint in the U.S. rather than going off to China, Mexico and South Korea."
| Hard to argue that point. Let the South Koreans support their auto industry. |
On Tuesday and Wednesday, GM chief executive Fritz Henderson met with legislators and sought to ease their concerns over the overseas operations.