Obama's GM outsourcing to China

Nothing like bailing out and taking over a company that then goes to China.

From the Argus

SHANGHAI — Detroit-based General Motors Co. plans to open four new assembly plants in China by the end of 2015, export more vehicles from China, and grab market share in the sport utility and luxury segments, executives said.
The automaker said it would increase its production capacity by 30 percent to 5 million units per year. The company also said it would add 6,000 jobs in China in connection with its expansion plans, which include four new assembly plants and four new powertrain plants, GM Chinese President Bob Socia said.
Socia declined to say where the plants would be located, but GM will need approval from the Chinese government to move forward.
He also said the company hasn’t ruled out exporting vehicles from China to the United States.
“It could very well happen,” Socia told reporters after a news conference near the Shanghai auto show last week. “I’m not sharing any plans with you, but we try to keep open as to what makes sense. … There’s no reason why we can’t be exporting to the states.”

Of course this was after the 2012 election.

Barack Obama enables outsourcing of auto industry (Chrysler)

I'll start out with saying this. I'm from a Ford family. I own and drive Fords. Always have, and probably always will. I'll also never own a foreign car. That includes foreign cars built here as profits go overseas. That also includes Big 3 cars built outside the US. Ford Fusion's in Mexico to me is the same as a Toyota. When my parents took advantage of cash for clunkers (mostly helped foreign cars) Fusions were out. No Mexican cars allowed. This goes beyond partisan politics here. I root for the Big 3 to do well - as long as the jobs stay in the US, particularly Michigan.

One of the biggest myths that gives Obama a good chance to hang on to win in Michigan (not if I have anything to say about it) and  Ohio is that he supposedly saves the auto industry. Bullshit. Romney wrote an editorial calling for reorganization and the NY Times editors gave it the headline "Let Detroit Go Bankrupt." Here's the little secret. GM and Chrysler DID go bankrupt - even after the Bush and Obama bailouts. I'm going to repeat that. GM and Chrysler DID go bankrupt. They went to bankruptcy reorganization. Obama and Romney both aren't far apart on that. Romney supported loan guarantees, similar to Chrysler in 1979.  As a Big 3 supporter and owner, they could have been better on this, but they could have worse, like Bob Corker, Gary Ackerman, Michael Cupano, Richard Shelby, and Henry Waxman. Shelby I understand because his state had foreign car plants. I don't like it, but I understand it. Corker I don't get his deal with Saturn being from his state. Nissan has plants in Tennessee, so that's also an influence. With the dems, it's the progressive movement's religious jihad against the Automobile Industry in the name of global warming going back to Al Gore's push to ban the internal combustion engine. John Dingell, hardly a conservative, was pushed off of commerce chair because he supports the auto industry.

The industry will survive, but it isn't what it was. At least 50,000 direct jobs were cut, not counting the suppliers. The Hummer was agreed to be sold to China. Saturn is gone. Pontiac is gone.

I'm not going to say that Romney is as good as Joe Knollenberg, Thad McCotter, or John Dingell when it comes to the domestic auto industry, but he's not a Corker. Obama isn't as bad as Waxman, but he's not Dingell - however there's one real nasty part of Obama's team and its reorganization demands regarding Chrysler. Obama put Chrysler under. foreign control and ownership - to a company that has never been able to break through in the US. Fiat.

From 2009 - Forbes.

Chrysler must become friends with Fiat pronto.
The U.S. government has threatened to suspend federal aid for Chrysler unless it secures a deal with the Italian carmaker within 30 days, senior administration officials told Forbes.

The repercussion of Obama forcing Chrysler to go to Fiat  is right here.

From Bloomberg news.

Fiat SpA (F) Chief Executive Officer Sergio Marchionne set a target two and a half years ago to sell 6 million cars annually by 2014, a goal that analysts and industry observers at the time deemed impossible to achieve. They were right.

Marchionne, who runs both the Italian automaker and Chrysler Group LLC, has said he will revise his forecasts when the two companies announce third-quarter results tomorrow. Analysts estimate his sales target will need to come down by 15 billion euros ($19 billion).
“Marchionne was too optimistic in 2010,” said Giuseppe Berta, a professor at Bocconi University in Milan who has written several books on Fiat and has worked as a company historian. “Fiat and Chrysler can’t grow by self-propulsion to the famous 6 million-car target.” 

And here's the devil in the details.

Fiat’s problems are bigger than many rivals’ because its troubled home country accounts for half its sales in the region. Its plants in Italy, where car sales are on pace to plunge this year to the lowest level in more than three decades, are running at 50 percent of capacity, far below the 80 percent threshold typically considered profitable.
To counter the severe slump in European sales, Marchionne is considering building Chrysler models in Italy, including Jeeps, for export to North America. The Italian government is evaluating tax rebates on export goods to help Fiat. Marchionne may announce details of his plan as soon as Oct. 30, the people said.
“This makes sense on multiple levels” as it will boost plant utilization and would cap “Chrysler’s own potential, limiting the likely cost to Fiat shareholders of buying out the Chrysler minorities,” Stuart Pearson, an analyst at Morgan Stanley in London, said in a note to investors today. “However we see no quick answers, and fear debt could surprise negatively first,” said Pearson, who rates the stock underweight with a target price at 3.90 euros.

Jeeps built in Europe to be imported here? Jeeps outsourced? You got to be kidding me. That's an American icon. Keep in mind that it was Obama's demand that Chrysler goes to Fiat.

Romney's getting heat for his comments and ad about outsourcing, but Bloomberg's story here shows that he's not off the mark. GM and Chrysler DID go bankrupt under Obama, and Chrysler WAS put under foreign control with outsourcing, and Chrysler's manufacturing may very well go to Europe, if not necessarily China.  

If the Peter Principle in Chief Obama wins a second term thanks to being lucky that reorganization happened when he was CEO (so he can portray himself as the hero he isn't), he's not going to have to worry about this anymore. I expect Marchionne to announce the outsourcing to be official November 10th or so, no matter who wins. Election cover.

Sold down the river with the new "Free" trade agreements

Bipartisanship isn't always a good thing. Oftentimes it is a very bad thing. Bipartisanship is usually when both political parties get together to kick America's ass. NAFTA and GATT were bipartisan disasters, especially in Michigan. So was Most Favored Nation Trade Status with China. I have a strong libertarian streak on a lot of things, but when it comes to foreign policy and trade policy, I lean paleoconservative more than anything else. Nowhere I do lean that way more than with trade.

Free trade agreements work with countries similar to ours. Countries that are not protectionist, have wages close to our level, and have regulations close to our level. Unfortunately, free trade agreements aren't free. They are thousands of pages of regulations. Also, when we outsource our skilled labor, it's a problem. In Michigan, this strongly affects our auto industry, tool and die, and our furnature industry. In the 1990's, computers were the wave of the future. Silicon Valley. Today, Silicon Valley lost a lot of their jobs to India. 15 years.

From the AP

"WASHINGTON (AP) — Congress approved free trade agreements Wednesday with South Korea, Colombia and Panama, ending a four-year drought in the forming of new trade partnerships and giving the White House and Capitol Hill the opportunity to show they can work together to stimulate the economy and put people back to work.

In rapid succession, the House and Senate voted on the three trade pacts, which the administration says could boost exports by $13 billion and support tens of thousands of American jobs. None of the votes were close, despite opposition from labor groups and other critics of free trade agreements who say they result in job losses and ignore labor rights problems in the partner countries.

"We don't do much around here that's bipartisan these days," said Sen. Rob Portman, R-Ohio, who was U.S. Trade Representative during the George W. Bush administration. "This is an example of where we can come together as Republicans and Democrats realizing that with 14 million Americans out of work, we need to do things to move our economy forward."

President Barack Obama said passage of the agreements was "a major win for American workers and businesses."

"Tonight's vote, with bipartisan support, will significantly boost exports that bear the proud label 'Made in America,' support tens of thousands of good-paying American jobs and protect labor rights, the environment and intellectual property. ... I look forward to signing these agreements.""

What a coincidence. Korea.

GM then has this

After enduring years of Chevy Volt hype, we now get a new "new best thing" from General Motors in the form of an electric version of the Chevy Spark. And I have it on good authority that the Spark will be made in Korea.
......
Another very important question regarding the electric Chevy Spark production is, "where will it be built?" Will the technology be shared with China by SAIC so that GM can benefit from the huge Chinese subsidies? Will the taxpayer money that was used to bail out GM and then develop electric cars go towards creating green jobs in other countries while neglecting the American public that paid for the job creation? According to GM North America Director of Communications, Greg Martin, both conventional and electric versions will be built in Korea.

Why the hell are we bailing out companies with US tax money who are building new products outside of America? There's plenty of blame to go around here too, from Republicans like Portman, Corker, and Bush to Democrats like Feinstein, Obama and Reid. Bipartisanship sold us and our sovereignty down the river. Again.