The New China General Motors and Its Position in the World Market
Premeditated, deliberate, measured, and calculated. These are terms which best describe the unwarrantable move by the President of the United States of America, Barack Hussein Obama, and his sycophantic Democrat-controlled Congress to nationalize one of the most respected automobile manufactures in the world. An unprecedented action by any president, Obama far exceeded his authority for his office in issuing an order for Rick Wagoner, General Motors Chief Executive Officer to step down from his position with the company as of Friday, March 27, 2009.
Because General Motors along with Chrysler Corp. had accepted $17.4B in emergency funding from the U.S. Treasury, Obama felt it was in the best interest of the country to take over the company because of its supposed inability slash their debt and reduce costs in building their cars, thereby endangering the investment he had made on our behalf.
Why would the government take this path against an automaker instead of going after the bankers and investors who had received their own billions in the so-called “bail-out funds?” For an answer, go back to the Clinton era, specifically the year 1998.
Amid daydreams of physical therapy by Monica Lewinsky and nightmares of Independent Counsel, Ken Starr, Bill Clinton decided to visit the General Motors unit in Shanghai, China in May of that year to put the US Presidential blessings on their new endeavors. GM China was in the process of building a $1.5B (US) facility in a joint venture with Shanghai Automotive Industry Corp. and was completed in November of 1998 with expectations of producing 100,000 vehicles per year beginning in December of 1998.
Within the first eight months of 2009, GM China sold 1,111,401 vehicles for a 13% share of the global GM market and with an annual production exceeding 1.8 million cars for the total world market. China, as of the first quarter of 2009, became the world’s largest car market, surpassing for the first time, the United States’ market. While General Motors slashes its domestic workforce by at least 23,000 workers, China GM, currently employing some 21,000 workers, is still hiring and expects to open a new factory in a few short years.
The working rules for employees and their salaries, which have been blamed for strangling productivity in the US factories, are problems which do not exist in China. China produces the same cars with employees’ wages and benefits per factory worker at one-tenth that of the American worker. It seems now, a greater understanding is revealed for the real reasons for American General Motors to become American Government Motors.
Given China’s General Motors current production and planned future production, their goal must certainly be to replace the US facility with imports of cars, engines, and power trains manufactured in China by Chinese labor and managed by US personnel. But, how does this affect the UAW union personnel and Washington? Under the present Obama plan, the United Auto Workers “health care fund” gets 17.5%, Obama and his cronies get 60%, the Canadian government (?) is given 12.5%, and the remaining 10% goes to the original bondholders. Also, as a pay-back for supporting the Obama election, the UAW gets a bonus consisting of a $2.5B note and $6.5B worth of preferred stock paying a 9% cash dividend. All for their “health care fund.” What about the common stockholders who get nothing, zero, nada, for their $12B investment and the public bondholders who gave GM $27B and wind up with only a 10% ownership? What a crock!
The real money-makers of this Obama farce is the UAW and the tab goes to those of us who already pay exorbitant taxes from our making a living working for others. The Democrat socialist boot-lickers want us to believe the “rich” will suffer the most in covering this financial debacle of spending trillions of our dollars, but the real thinkers of this nation know better. The UAW contributed megabucks to the Obama campaign and supported him throughout the election period, no doubt using threats and intimidation to its union members to assure their votes went where the union wanted them. Obama has now made sure his loyal subjects are being rewarded by simply handing over billions of our tax dollars to them and billions of ordinary peoples’ savings, investments, and retirement funds. These ordinary people invested $12B in a company with a rock-solid history in the auto industry until just the last very few years. And now, they get nothing for their faith in the American market, simply because a Muslim-born, non-citizen puppet decided to kick out the GM CEO and establish his place in history to become the only president to appoint himself the head of a major corporation in the United States of America. And we sit in our comfortable homes and do nothing and say nothing. I sometimes think we get what we deserve simply because of our apathy.
Mike Chapman
Longview, TX
www.chapmanbooks.com