Under Restructuring, GM To Build More Cars Overseas

Page 1 of 3  
Under Restructuring, GM To Build More Cars Overseas http://tinyurl.com/oyk2a7
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's an almost impossible dilemma," said former labor secretary Robert B. Reich, now a professor at the University of California-Berkeley. "GM is a global company -- so for that matter is AIG and the biggest Wall Street banks. That means that bailing them out doesn't necessarily redound to the benefit of the U.S. or American workers.
"More significantly, it raises fundamental questions about the purpose of bailing out these big companies. If GM is going to do more of its production overseas, then why exactly are we saving GM?"
The administration has aroused similar complaints by shepherding a merger between Chrysler and Italian automaker Fiat. But it has extracted a promise from Fiat that it will build small cars in the United States.
The complaints about GM's operations portend a potentially larger argument, a political dispute led in part by the United Auto Workers.
"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."
Labor costs in those countries are far lower. While paying a U.S. autoworker with benefits costs about $54 an hour, a South Korean worker earns about $22 an hour, a Mexican worker earns less than $10 an hour and some Chinese workers can earn as little as $3 an hour, industry sources said.
On Tuesday and Wednesday, GM chief executive Fritz Henderson met with legislators and sought to ease their concerns over the overseas operations.
He emphasized that the company, which is shuttering factories at home, is also canceling projects in Mexico, Russia and India.
He also assured legislators that none of the figures are final, and that negotiations with the union are ongoing.
"We continue to work closely with GM, UAW, and all the stakeholders to further refine and develop GM's plan," a Treasury spokesman said.
The U.S. government has loaned GM $15.4 billion. But billions more are expected to be invested, and under the current plan, it will be the majority owner of the company.
The company forecasts that between 2010 and 2014, as the recession recedes, its U.S. sales will rise from 2.4 million to 3.1 million.
Most of that growth -- about two-thirds of it -- will occur in the United States. But about one-third of that growth will come from other countries, mostly Mexico and South Korea.
Those proportions roughly reflect how GM builds the cars it sells in the United States today -- about two-thirds come from the United States and one-third from other countries.
According to the figures shared with lawmakers, the percentage of GM's U.S. sales of cars built in the United States dips from 67 percent in 2009 to 61 percent in 2012. Yet the company projects that by 2014 the percentage will rebound to 66 percent.
Under the viability plan, "the U.S. percentage stays roughly the same," Henderson said in an interview last week.
But the union and some legislators object that the company's U.S.-funded revival should not help pay for expanding foreign operations. Moreover, they believe that planned cuts in Canadian production -- down 23 percent -- will have direct effects on U.S. jobs because the U.S. and Canadian auto industries are so intertwined.
"If you are shutting down plants in this country, U.S. tax dollars should not go for building plants in other countries," said Sen. Sherrod Brown (D-Ohio), who was among those who met with Henderson.
But company officials and industry analysts have long argued that, even putting aside the issue of labor costs, it makes logistical sense to build some cars in other countries, even if they are destined for sale in the United States.
Take, for example, the Chevrolet Spark, a tiny car that GM sells in South Korea and elsewhere in Asia. In the next few years, the company plans to send some of those cars -- which are built in Changwon -- to the United States for sale.
But since only about 5 percent of the car's market will be in the United States, the manufacturing will remain in South Korea.
Analysts who study the auto companies and their global operation warn against allowing political passions to obstruct GM's efficiency.
"If we start making political decisions with the auto industry, we're going to be in tremendous trouble," said Michael Robinet, vice president of global vehicle forecasts at CSM Worldwide.
--
Civis Romanus Sum

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Somebody is waking up and smelling the coffee?
Just like TVs, toasters, phones, computers, it is time for auto to go offshore so we can afford them.
The bailouts are for the ubber-rich then it goes offshore.
Now that taxpayers have been saddled with trillions of dollars of added debt that will translate to taxes, they will have less money to spend on things like auto. A self destructing cycle actually.
What a screwed up business. Too many years of fantasy money losing managment and union.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

The companies send production offshore and they also start companies offshore who gradually take over ownership of the productioncompanies. GM has more or less done this as well as other big companies.
IBM has been doing this for years and is still moving jobs to india and china.
GM management has been plain stupid in not closing factories in the US when it has been obvious for years what is to come.
How can you compete with ten times more costs?
The unions do as much they can locally but as they can not do much about offshore pay at least they should have allowed for more robots and settle for less pay and benefits.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Some actually come back once North American management rot is fired. They realy underestime that it is just employees, management is often the root cause and worse.

Agreed. GM management was far too appathetic. Criminally appatetic I might add.

We can't, and shouldn't burn billions of hard earned taxpayers cash to even try. First off, it makes people tax-poorer so they can't even afford a car. Hell, part of the problem with wages in Canada is the gross income is fantastic, the net income after taxes and other taxes sucks.
We vote for big expensive government we can't afford. Drives our costs through the roof is one signifigant cost no one wants to talk about.

The markets will always seek balance, even if it takes 30 years. GMs bubble has burst, because with government debt and overspending, tax relief is next to imposible. Yet people have less to spend... too many years of getting $100 extra a month just to see it pissed away in taxes. So home or auto, auto looses. Does not take much to cause a economical collapse.
Don't kid yourself, markets are gaining but we are far from being out of the weeds.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Sure as hell ain't you.

What the hell are you talking about? What happens when all of our industries go offshore? What industry do you work in (assuming you actually have a job)?

If we send all our industries offshore, taxpayers won't have any money at all.
<Snip of your normal garbage>
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
One would think American consumers would soon wise up and realize it is THEY too who are sending their neighbors jobs and their own jobs as well as the jobs of their children and grand children over seas every time THEY buy products from foreign companies as well.
When you buy a Toyota made in Japan, or even one that is assembled in the US of imported materials and parts, you are sending jobs, and the capital that creates jobs in the US, over seas as well.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

If you want a car that's unreliable and keeps breaking down, then be patriotic and by Merkin. But if you've got any sense and want value for money you'll by Japanese, just like the British did 30 years ago and put companies that couldn't cut mustard, out of business. Of course, if the likes of GM got their corporate finger out and built world class cars then you could do both, but until then you've got a personal decision, am I a patriotic idiot who wants to throw good money after bad to keep Merkins in work, or look after your hard earned money and buy the best value for the pound in your pocket. (Dollar to you.)
--
Clive

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Are you referring to all the money from the US that goes to Japan to be redistributed to the Japanese corporations, those millions? LOL

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
You didn't answer the question, again.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

You bring up an interesting point;
Pics from years ago showed AutoWorkers busting their humps all day to keep up with the line. Eight hours of "hanging doors" must've been grueling.
But all the modern pics I see show robots, or, hydraulic assists doing all the lifting, and mounting. Looks like the heaviest thing the worker lifts is his paycheck.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

And I can show you a picture of a person picking up a truck with his bare hands, what's your point? Have you ever been in a GM plant? If not, shut the hell up.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

He is right. If a none union person comes in to do work, the union guy will stand there with their thumbs in dark places as that is the rules. We have all seen it.
And yes, been in union plants. Hate doing it too. Fortuantely I will not have to any more.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

They what do you do for a living, you lying prick? What industry do you work in? You are hiding something, and everyone is beginning to notice. Tsk tsk tsk.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

Hardly, see last post. You are just a sniveling socialist thinking it is OK to take from people non-auto people, to subsidise a rotting industry. Nothing ethical about that at all.
Hey, if Chavez did it you would call it corruption. When DC does it it is good?
At least with Chevez the people really need it. GMers (union and management), drove GM into the ground and now want to be rewarded with tax dollars?
GM does not pay their bills so others in the industry can eat.
And it was all set up years ago with actions like Carlyle facilitating the sale of Alliston, Delco etc. The intent all a long was to put GM on the dole.
Who is bailing out the other 98% of businesses and people getting aid off? Or is this just a pork fest for auto?
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
wrote:

GM has received loans, and you know it. As for who is helping others, ask Obama and Harper. Speaking of that, why are you so outraged at GM receiving $60 billion, when the banks have received close to a trillion? Yep, something's up with you.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
Sure it does, you do not seem to mind the American taxpayer paying Toyota to make cars. Why only bitch about GM? You should be bitching to the government that is taking your money.

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload
What industry do you work in (if you have a job) and did your wife leave you for a UAW, or CAW man/woman? They are simple questions that you have been avoiding for a couple of weeks now.
Add pictures here
<% if( /^image/.test(type) ){ %>
<% } %>
<%-name%>
Add image file
Upload

Related Threads

    Motorsforum.com is a website by car enthusiasts for car enthusiasts. It is not affiliated with any of the car or spare part manufacturers or car dealers discussed here. All logos and trade names are the property of their respective owners.