GM May Focus on Cheaper Imports, Cut US Jobs

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GM May Focus on Cheaper Imports, Cut US Jobs http://www.cnbc.com/id/30803261
| 18 May 2009 | 06:33 AM ET
General Motors is engaged in negotiating a reorganization that could
increase vehicle imports from its plants in Mexico and Asia while closing factories and cutting the work force in the United States.
That approach drew a sharp rebuke from the United Automobile Workers union on Friday. In a letter to each member of Congress, the U.A.W., which represents G.M. factory workers, argued that to qualify for more government assistance, the auto giant should be required “to maintain the maximum number of jobs in the United States.”
The administration, however, appears to accept the proposition that to return to profitability as quickly as possible, G.M. must import a significant percentage of cars from its plants in low-wage countries, like Mexico and China, or low-cost countries, like Japan.
G.M. already imports a third of the vehicles that go to showrooms in this country. That percentage would not change in the plan that G.M. is preparing to submit to the administration to justify billions of dollars in new loans to stave off collapse.
G.M. would emerge a smaller company, with fewer employees and less output in this country and abroad. But imports would rise from low-cost countries, particularly Mexico and China, and that would be offset by fewer imports from Canada and Europe.
Some economists, like David Autor of M.I.T., say that G.M. cars made in China, among other countries, “are pretty competitive and could be sold here.”
Others, like Harley Shaiken, at the University of California, Berkeley, argue that if G.M. focused more intensely on technology and auto quality, it could concentrate production in the United States and still be competitive. “The other way to go,” he said, “is to cut costs by importing more vehicles from Mexico and China, and lifting the bottom line that way.”
A Treasury spokeswoman said over the weekend that “G.M. and the U.A.W. are in active and constructive deliberations around all aspects of their plan. This is one of several issues they are focused on and the administration is supportive of their efforts to come to a resolution.”
G.M. is asking Washington for billions of dollars more in federal loans to survive, on top of the $15.4 billion already borrowed. In a presentation to Congress, the company laid out the plan for the shifts in production to lower-cost countries. In the United States, G.M. would close 16 of its remaining 47 plants and eliminate an additional 21,000 jobs. The company also announced on Friday that 1,100 dealers would be eliminated from its American network by the fall of next year.
In the letter to Congress on Friday, Alan Reuther, the U.A.W.’s legislative director, also argued that if G.M. cut back production in Canada, it would hurt small manufacturers in the United States that supply parts to G.M.’s Canadian assembly plants.
But the Obama administration apparently sees interference in such plans as crossing a line into industrial policy, rather than helping a giant multinational get back on its feet as a successful, privately managed global operation.
Insisting that G.M. preserve American jobs by shifting production to the United States from abroad, this argument goes, would require many times more in federal aid than the $16.3 billion in loans now anticipated.
“The idea is to get G.M. off the government dole,” Mr. Autor said. “And if that is the case, then one has to take the steps that a free-standing company must take to be profitable.”
# Slideshow: Top 10 Gas-Sipping Cars http://www.cnbc.com/id/26660880 /
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They have to do what they have to do, to survive.
There is no free lunch at the moment.
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I really have to disagree with this "get more from China and Mexico" plan of GM's/Obama's. I think it's complete bullshit. The Government is lending GM billions to save American's jobs, so they are just going to fire more Americans and build more vehicles in China and Mexico? We need to import *less*, not more.
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Dont get my post wrong, Knight... I agree with you, but the government is not lending billions...they have lent billions, and that is probably over. Chrysler is already toast.
GM has no more support (unless Obambam flipflops). That part is probably over.
Most likely there will be a structured bankruptcy, after which GM will sell whatever it can to keep alive.
Now, Obamama may try to institute laws to prevent some of the offshore accounts, outsourcing, and importation that has been going on unfettered. If this happens, then GM will have to react quickly and forcefully with whatever it can scrape up to generate revenue.
I have never seen anything like this!
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Typo or not, Obamamamama mama... funny.
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Still pandering for the biggest corporate loosers in the history of the modern world?
Give it up. GM needs to go down hard and fast. Every day it keeps up this farce and blood sucking on the taxpayer is insane.
Time for GM to pay the price.
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Over $25B so far. And it isn't enough. GMAC extra.
Yep, taxpayers be footing the bill. Certainly not free.
GM is so far in debt it should have been declared banrupt 3 years ago. Wagoner should be charged with treason and hung.
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The new BO emission regulations and 35 MPG average fuel economy standards, to take effect in just four year, will force GM and other manufactures to go off shore to build cars at a price at which they can be sold in the US.
Without the higher profit cars SUVs and trucks to subsidize the build price of small cars, as is the case today, the manufactures will need to go off shore, to take advantage of the lower build costs off shore, to compete with foreign manufactures that currently have that advantage.
The net result will be the loss of hundreds of thousands of good American jobs.

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The 'other way to go' is to stop or limit imports! It's called 'protectionism' to protect the nation's industries and workers. Abandon 'free trade' and substitute it with 'fair trade' i.e. only buy from abroad what cannot be manufactured at home.
If we don't protect our home industries, soon we'll have none at all!
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"Alan" <you're got to be joking> wrote in message

And then the question arises what is "fair trade"?. One that satisfies my interests as a consumer who wishes to buy the best car at the cheapest price or the workers and industry's interests who seek to sell at the highest price possible?
It is impossible to define fair trade without choosing sides. As well there must be present a means of force to enact this state of affairs. Force involves violence or the threat of violence. Not an ideal state of affairs for a population.
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What is ideal is for the greed grubs to get their hands out of our pocket by letting GM go under. Right under. In fact, people not buying a GM or Chrysler peice of crap are doing their part to help end GMs blood sucking. The sooner they go down, the less it will cost us.
Then we will get fair trade. One that does not blood suck taxpayers for gross negligence and greed of the paramount kind.
Me, I will never buy or rent an auto with GM, GMAC, Chrysler, CAW or UAW associated with it again. So Ford better get going in import 100% non-CAW/UAW welcher made. I don't support those who steal from me.
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People like you don't play the game fairly though. Most studies will show that a 2009 GM is equal to (if not better then) a 2009 Toyota, Honda, etc., yet people like you will always think "Japan equals better".

Fair trade is simple. You make everything equal. If we send you're country 20,000 cars, you are allowed to send us 20,000 cars. You can't only allow 5,000 of our products, while flooding our market with 50,000 of yours.
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On Wed, 20 May 2009 03:47:27 -0400, "80 Knight"

You got it, bro!

Hogwash!

Couldn't have said it better!
Fair is FAIR. That's all I advocate. It's a bummer that the moron politicians can't understand that simple fact.
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wrote:

Good part about the protectionism you are talking about, is it will not happen.
Besides this is mute, GM isn't going to import anything, they will be long gone by then.
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wrote:

Mute? My god are you an ignorant SOB. You mean moot!
But you know best, don't you?
57 must be your IQ.
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That's being much more generous then I have seen anyone else give him...
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wrote:

So, you agree when the Asian countries practice it, but if the US does it, it is somehow unfair?
I generally like Canadians, but you're making your countrymen look bad. Are you Bob or Doug Mckenzie?
Mute != Moot
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wrote:

Rick, I beg you, don't compare Canadian's to "Canuck". He is an Albertan hick, who has been all over Canada, and the USA, apparently picking up every bad trait of whichever city he lived in.
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On Fri, 22 May 2009 14:31:55 -0400, "80 Knight"

My fault.... I apologize!
I didn't mean to insult your great countrymen like I appeared to.
I guess he's like our Texans....
Best wishes to you and yours,
Rick
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wrote:

Thank you, and same to you Rick.
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