Even After Bailout, GM to Move Business Overseas

Tell me why we bailed them out again?

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.

……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.
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/07/AR2009050704336.html

An editorial in the Portland Maine Press Herald explains just why government-run businesses are disastrous:

You (the government) shouldn’t be running car companies, or banks or insurance companies, or hospitals or schools. And you shouldn’t allow those who got us into this mess to persuade you otherwise. When a private business has become “too big to fail,” it already has failed. Its future has become dependent not on the quality of its products and services in the marketplace, but on the extent of its influence in the halls of power.

Such companies should fail. It should be the policy of government not to prop them up but to oversee their dismantling in an orderly fashion and to put in place coherent regulations to ensure that such excesses do not occur again.

The real scandal is not the millions of dollars we taxpayers paid to the inventors of inadequately tested financial innovators. That was pocket change. The real scandal is the billions we paid to bail out the institutions that bought and sold them on the basis of the “too big to fail” argument.


And why consumers bear some responsiblity:

We mandate fleet rather than vehicle efficiency, slap tariffs on foreign trucks, then wonder why car offerings range from gas-guzzling, truck-like SUVs to an array of obsolete sedans with “iconic” brand names and eroding customer bases.

We pay lip service to energy independence and shower subsidies on ethanol producers, then shout for “excess profits” taxes when oil prices go up and sign petitions to lower the excise tax on new cars. We want the results, but we never want to pay the price.
http://pressherald.mainetoday.com/story.php?id=254034&ac=PHbiz

It’s no wonder corporations ‘outsource’ when labor costs overseas are a fraction of what they are here. Thanks to unions, company mismanagement, overpaid, incompetent CEOs, and government interference, we’re are witnessing a mass exodus of American businesses.

And guess what Obama plans on doing to those who flee:

Barack Obama on Monday announced a major offensive against businesses and wealthy individuals who avoid U.S. taxes by parking cash overseas, a battle he said would be fought with new tax laws, new reporting requirements and an army of 800 new IRS agents.

During an event at the White House, Obama said his proposal would raise $210 billion over the next decade and make good on his campaign pledge to eliminate tax advantages for companies that ship jobs abroad.

If I’m a business owner and I don’t have the money to pour back into my business to keep it afloat due to exorbitant wages, taxes, and overhead, I’m going to look for ways to cut costs.

……Currently, U.S. companies can avoid paying taxes on foreign profits until they bring the money back home. So a U.S. company doing business in Ireland, for example, must pay the Irish tax of 12.5 percent, like every other company doing business in Ireland. But the U.S. firm would owe an additional 22.5 percent to the U.S. Treasury (the difference between Ireland’s tax rate and the 35 percent U.S. tax rate) unless it reinvests the money overseas.

http://www.kansascity.com/105/story/1178334.html

Successful businesses should be allowed to flourish; bad ones should be allowed to liquidate. That’s the way free market capitalism is supposed to work.  Every time the government sticks its nose where it doesn’t belong, the economy suffers.

Floundering corporations will become failed government-owned assets.  Corporations attempting to escape the stifling taxation and the malevolent tactics of the Obama regime will be penalized.

How’s that ‘change’ working for ya?

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