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TechnoratiThe 'New GM': Layoffs, Factory Closing, and Offshoring
The trouble with the whole "Nixon goes to China" theory -- which is grounded in the calculus that big progress is made when a politician goes against type to address a seemingly intractable challenge -- is that sometimes the "bold" gesture is really just more of the same.
This is an important reality to recognize as the major media in the United States begins to play up the reshaping of General Motors by the Obama administration's auto-industry task force as a courageous or groundbreaking "new" initiative to "save" domestic automaking.
It's not.
The GM bankruptcy and bailout is the continuation of post-industrial policies of the Clinton and Bush years. Those policies, which encouraged companies to shutter factories in the US and move operations to foreign countries with lower wages and weaker regulations, were defined by Wall Street rather than Main Street. The model of a "healthy" American company was defined by stock and bond speculators, who rewarded short-term thinking and brutal cost-cutting, even if these strategies resulted in the loss of millions of jobs, the closing of hundreds of functional factories and the deindustrialization of communities, regions and whole states that had once been among the most productive in the world.
Nothing about the old way of doing business made sense, and it made a wreck of GM. After decades of closing factories, laying off workers and shifting production overseas, the company now finds itself with $172.8 billion in debt.
It would make sense to change course, radically.
But the Obama administration is not doing anything radical.
Rather, it wants to create a "New GM" that stays the course of the old GM.
If all goes according to plan, the "New GM" will close down as many as 20 factories in Michigan, Indiana, Ohio and Delaware. Additional plants in Tennessee and Michigan will be put on "standby," for probable closing. At least 21,000 family-supporting jobs will be lost, as the corporation shifts production to new facilities in China and other foreign countries. Those cuts come on the heels of GM factory closings last year that cost tens of thousands of jobs and shattered communities across the Great Lakes states just as the downturn was developing into a deep recession.
This massive de-industrialization plan -- with its rapid offshoring of work once done in the United States -- will be paid for by the federal government.
It will cost US taxpayers a great deal to eliminate this many US jobs -- Washington has already handed GM $20 billion and is expected to shift another $30 billion into the coffers of the corporation. "Whether that investment will ever be recovered is still an open question," suggests the New York Times report.
So what should taxpayers make of a scheme to risk $50 billion on a project to layoff US workers, close US factories and shift work overseas in order to satisfy speculators who continue to reward only race-to-the-bottom strategies?
The Times suggests that we ought to be impressed with the "Nixon-goes-to-China" courage being displayed by the president and his auto-industry task force. "The company will also have to shed 21,000 union workers and close 12 to 20 factories, steps that most analysts thought could never be pushed through by a Democratic president allied with organized labor," the paper chirps on its front page.
Spare us.
It takes very little courage for a Democratic president to side with multinational corporations, in the same way that his Democratic and Republican predecessors have.
Courage involves breaking pattern and doing something bold, like recognizing that the United States needs a manufacturing sector and making a commitment to modernizing basic industries and keeping skilled workers on the job. This is not a rejection of globalization; rather, it is an embrace of the future that says the US chooses to compete rather than give up.
An investment of $50 billion in federal money to close 20 major factories and shed 21,000 jobs is not a plan to "save," let alone revitalize, manufacturing in this country. It is an abandonment workers and communities that speeds up the de-industrialization of the United States. And it encourages GM executives -- be they "old" or "new" -- to be more concerned about the company's stock value than the adoption of smart long-term strategies.
16 Comments so far
Show AllThe people who have been laid-off due to auto plant closure ought to sign up for web-deign retraining program. They say it is the wave of the future.
Car manufacturing is done for in the US. Does anyone actually believe that poor people can afford a $40K GM Volt? Where will they park the car? When one is poor and can't pay utility bills the first thing to go is the electrical connection. And the US government wants to deny its poor cheap imports from China and India.
obama taught at the university of chicago what did you expect would happen? oh and is any
one ready to march on washington yet?the next 100000 job losses may be yours!
everyone has a hot button and this may be the one that moves them to action! don't
blame the unions for this debacle- ronald rayguns took their juice away 30 yrs ago
and all these stupid americans continued to vote for their own destruction . you get
what you vote for in this country and you deserve what you get if you don't look thru the smoke and mirrors presented by our'' candidates''.maybe we can go to the chamber of horrors eh i mean the chamber of commerce and look for our jobs in the museum
wing of the building
drive everywhere! drive to the slurpee store, drive to the mailbox at the end of the driveway, drive from the living room to the kitchen during commercials...
LOL! You got it!
As Aleksandr Solzhenitsyn said, "Make them irrelevant."
It can be done, it just means we have to use our brains and our talent instead of believing the story we've been fed that THEY are the ones with the brains and the talent.
When it is time to buy your next car what will it be? A GM car built in China or a Toyota built in Fremont, California, USA? If you buy the Toyota you actually get a well engineered, well built car that supports American workers and their families.
Might be a VW (bulding a plant in Tennessee), a BMW (in South Carolina), or a Honda (Ohio).
American workers are getting better treatment from foriegn governments than from our own.
q
our 8-year olds can build a better car than their 8-year olds! and cheaper, too!
drive everywhere! drive to the slurpee store, drive to the mailbox at the end of the driveway, drive from the living room to the kitchen during commercials...
Global Start Date: September 22, 2012...no more cars, no more tv, no more jobs, no more paychecks, no more mortgages, no more school, no more police, no more industry, no more electricity, no more stores, no more America...
Save the planet and all the myriad creatures and plants...save the last vestiges of human dignity...honor the living planet...it will provide all you need...let's get those gardens growing!
"At least 21,000 family-supporting jobs will be lost, as the corporation shifts production to new facilities in China and other foreign countries."
Of course!....China owns the U.S., that's why many call us Chinamerica. Without China's loans, the U.S. government's lights would be out.
Tim Geithner made it very clear yesterday that the U.S. would continue to invest in China's cheap labor practices.
Welcome to third-world America....complements of our elected officials who betrayed us.
One of the least noted aspects of the GM Bailout is the shift of GMAC to a "bank".
GMAC not only receives FDIC protections, but also has received TARP money which it is using to offer 0% loans to its new car purchasers.
In essence, we are giving GM and GMAC zero cost money from the taxpayers to compete with Ford, Toyota, Honda...
Who's the next one on the bankruptcy list ?
When will Japan develop similar incentives for it's manufacturers - cars and otherwise?
When will Korea? When will China?
This is much better than tariffs....
Maybe we could subsidize Boeing or John Deere?
Why don't we just declare free trade dead ...the death of capitalism by incompetents in Washington...
I think we need to get away from our infatuation with automobiles altogether. The whole thing from the get-go was lunacy.
How about a nation-wide light-rail system? How about one car per family? Or even none, if possible?
How about recognizing the degradation manufacturing does to the environment, since this is one of the reasons we are at peak water, oil, temperate climate, etc.
We are still so wrapped up in the story: America is great because of our manufacturing, our ability to get in our car and drive 50 miles, one way, to work. Or get in the car to run five blocks to the grocery. Or that every teenager has their own car.
Like just about everything else the military-industrial complex sold us in the past fifty years, we can't imagine life without GM. I feel bad for the people losing their jobs, but again, the people just sit back and let advertising tell them what they need to buy, not asking if it's right or good or needed or what the long-term consequences will be.
This country once had some very decent municipal trolley systems - so decent one could reportedly go from Massachusetts to Wisconsin just by transferring from trolley to trolley. Even car-happy Los Angeles had a trolley system. Guess which company helped eliminate the trolley from our cities.
True. And GM and the oil companies (Standard Oil) were the ones who bought and demolished the public transportation system in Los Angeles. Not just trolleys, but buses, as well.
Again, I feel sorry for the people losing their jobs, and it makes me angry to hear those lunatic right-wingers demonize unions (the only reason we have a middle class anywhere in the world,) but it's time to stop being slaves to the corptocracy, allowing our lives to be dictated by them, and using no imagination in demanding a better way to live.
man are the chickens coming home to roost
for years we have listened to this crap about the offloading of our jobs without saying a word
we allowed the government and the corporations to bullshit us into thinking it was a good thing
they used to say - we have the high paying jobs instead
not any longer
the policy of sending our jobs overseas has been a deliberate policy aimed at 1. taking full advantage of the poverty of the third world 2. ruining through erosion our way of life here
we sat back and let them do it
our jobs have been under attack from employers hiring illegals, government subsidizing these companies, anti-union tactics any nazi would be proud of
the loss of these industrial jobs is devstating to these states and the folks who are now unemployed
obama who has spent his entire life working in nwo/rockefeller foundations is not the shill we need - with his 31 year old punk he has chosen to oversee the dismantling of gm
if it is true that a fool and his money are soon parted i think we can say then that a scardey cat nation and their civil liberties/jobs/way of life/society are pretty soon parted as well
this nation has spent 30 years - since the senile reagan's presidency - turning our backs on our fellow citizens as they have been tossed from the good ship america one after the other
even wacky ross perot was talking about "the giant sucking sound" of our jobs going overseas
the loss of these jobs is a major step down for this country
a country with not that many major steps down left to sink into
"The GM bankruptcy and bailout is the continuation of post-industrial policies of the Clinton and Bush years. Those policies, which encouraged companies to shutter factories in the US and move operations to foreign countries with lower wages and weaker regulations, were defined by Wall Street rather than Main Street."
In all fairness, Wall Street took over control of the US economy at least a century before Clinton took office.
Our current misery is undeniable proof of one maxim that I've believed for years and that others on this site have noted: financial institutions cannot be the center of a healthy economy.
q
Thank you, John Nichols, for telling it exactly how it is with an Obama "achievement." In so doing, you avoid completely the usual patina of excuse-making and hope-he'll- do-better rhetoric that usually accompanies article in Nation (a style I've called subjunctivitis), incuding some of your own.
For another statement, this one by Greg Palast, from another writer who knows how to call a spade a spade when it comes to the bankruptcy machinations of the Obama administration, see: http://dissidentvoice.org/2009/06/grand-theft-auto-how-stevie-the-rat-bankrupted-gm/
I was going to link to Palast's article myself.
Funny how JP Morgan and Citibank will be able to get back 100 cents on the dollar while everybody else is forced to walk the plank.
Yes indeed, Obama is brave for authorizing his car czar to steal from the UAW pension and hand the loot over to the bankers.
This is indeed change. Not many criminals are this brazen.
There is more good reading on the woeful state or our economy and the misguided government efforts in remediating it in a new Pam Martens (former Wall Street employer who blew the whistle on Obama's Wall Street sponsorship) article arguing that the concentration of wealth into hands of people unable to spend it is the real source of our problem. And the remedy of putting on the Fed as the cop on the street to "regulate" bailouts and bankruptcies is a fox-in-the-henhouse operation of putting in charge the very people who specialize in policies of wealth concentration. http://www.counterpunch.org/martens06012009.html