Monday, June 1, 2009
Grab the vaseline, this one could be painful.
Most of the news media has been all a twitter over General Motors filing for bankruptcy today with only the crash at sea of an Air France flight to break the endless monotony of what amounts to idle speculation and political posturing. High paid talking heads spent the day speculating while the iconic corporate corpse grew cold whether the reorganization would succeed with GM rising like Lazarus or failing and being tossed into the dust bin of history. The specifics over how GM will be organized have the federal government owning a 60% stake in the company and sinking another 30 billion into the company after already receiving 20 billion since the end of last year.
Some might be surprised but this post is not about how that company needs to be saved although that is how I feel. But first, before I get to the main point my position is that after weighing the various options open to President Obama and the nation General Motors must pull its head out its ass and work very hard to get back on its feet. Blame abounds in all corners for its failure but currently GM employs 173,000 people with far more working in business that either directly support its operations like parts manufactures or indirectly in such things as simple as food vendors and landscapers. I speak of the food vendors and landscapers from my own experience working at a company that when the telecom bubble popped in the early 2000's canceled contracts with such companies resulting in them either laying most of their employees off or going out of business completely.
It might be easy for those working in other parts of the country to consign General Motors to oblivion with them employed in comfy jobs in other, safer industries. This overlooks the ripple affect as more jobs disappear in what is already called the "Rust Belt" that has been plagued with jobs disappearing for years all for the benefit of the global economy and American consumerism resulting in crashing local economies and causing untold hardship. Sorry, but personally speaking Tom Friedman be damned I don't care that the world is becoming flatter we can't all flip hamburgers at McDonald's and Wal-Mart will not be able to hire the entire nation to stock shelves no matter how big their stores get. Then again to the bean counters and financial wizards, which got us in this mess, its all about the bottom line. Which finally brings me to my main point.
On the way home from a very busy day at work I tuned into the NPR station for the calm and rational way they announce the events that had gone on earlier. The show on the radio at that moment was PRI's "The World" which is a hash of interviews, news, and culture from around the world.
The lead story was, of course, about GM. At first I was surprised to hear that due to the agreement some GM manufacturing jobs would for the first time in at least 30 years be brought back to the United States. This brought in a guy named Donald Grimes who is a senior research specialist (business analyst) for the University of Michigan who isn't jumping for joy over the prospect. He says in the radio report that bringing back jobs here to America isn't necessarily the best thing for a new GM, that the jobs should go where they would be "most efficient" and where the company can produce in the "lowest cost environment" be that here in the States or Mexico or China.
Come on children, I know I'm ranting but stay with me because it gets better.
At least Congressman Dennis Kucinich told the New York Times that it was unacceptable for American taxpayers to subsidizes the exportation of their own jobs.
Okay. grab your tube of Vaseline or your favorite flavor of Joy Jelly because here it comes.
After the end of that segment, at about the 5:40 mark, another segment starts that states GM is doing all fine and dandy over in China making cars for all those newly prosperous Chinese employed with all those jobs that Ross Perot thought would be sucked down south of the Rio Grande. Especially disconcerting was the revelation to me that GM has long since entered a partnership with the city of Shanghai operating a car manufacturing plant over there. The city of Shanghi owns 50% of that joint venture and according to "The World" China correspondent, Mary K Magistad, there has been talk in the Chinese media that the Shanghai plant could soon be exporting GM cars to the United States. Hear that people, we cough up 50 billion for GM with a good chance that after all that the company we saved will thank us by selling us cars made in China. Feel the love!
Listen for yourself at PRI's "The World" website.