GM, after receiving billions in U.S. taxpayer money, is repaying Americans by offshore outsourcing their jobs. Canadian auto workers are raising hell (and it was not even their taxpayer money) about it, trying to get limits on imports.
The Canadian Auto Workers union says Ottawa must make sure General Motors of Canada doesn't import any more vehicles from offshore countries if the government wants to protect jobs here and assure protection of public investment in the teetering automaker.
As talks for worker concessions continue in Canada, Detroit-based parent GM Corp. – which is seeking billions of dollars in public loans – has revealed to the U.S. Congress it plans to start importing small cars from China within two years. Union officials in both countries say the move will kill jobs in North America.
Glad you supported GM getting U.S. taxpayer dollars? Want to see GM survive, prattling on how America needs an auto industry?
Instead we get this, GM plans to shift overseas production:
General Motors Corp. will shift more production of vehicles bound for the U.S. market to China, Mexico, South Korea and Japan, but will keep total imports at roughly one-third of all sales here.
In a confidential 12-page presentation to members of Congress, obtained by The Detroit News on Friday, GM said it will boost U.S. sales of vehicles built in those four countries by 98 percent -- or about 365,000 vehicles -- while shrinking production in Canada, Australia and European countries by about 130,000 vehicles.
General Motors Corp. may be more likely to end up in bankruptcy based on the Obama administration’s willingness to place Chrysler LLC into court protection to safeguard union health-care benefits.
With GM and its biggest bondholders at odds over resolving $27 billion in unsecured claims by a June 1 deadline, the Chrysler model indicates that President Barack Obama may resort to bankruptcy to end any impasse over that debt, said Martin Fridson, chief executive officer of New York-based credit investment firm Fridson Investment Advisors.
General Motors Corp., facing the threat of a bankruptcy filing if it can’t meet a June 1 U.S. deadline, will preserve the GMC truck line and drop its 83-year- old Pontiac brand as part of a government-led recalibration of its business plan, people familiar with the decision said.
The Detroit automaker will keep the GMC, Chevrolet, Cadillac and Buick brands, after a review that included profitability with the Obama administration’s automotive task force, said the people, who asked not to be named because the decisions have not been announced. GM may reveal next week the end of the make that produced the Grand Prix, Bonneville and Firebirds, they said.
So, is the Pontiac a political casualty to green jobs? The reason I ask this is the quote:
There are various media reports that GM will shut downall of it's U.S. plants for the summer, or 9 weeks.
General Motors Corp. is planning to temporarily close most of its U.S. factories for up to nine weeks this summer because of slumping sales and growing inventories of unsold vehicles, three people briefed on the plan said Wednesday.
Analysts say the company could be seeing sales decline because of talk about a potential bankruptcy.
The exact dates of the closures are not known, but the people said they will occur around the normal two-week shutdown in July when changes are made from one model year to the next. None of the people wanted to be identified because workers have not yet been told of the shutdowns.
It is also reported GM will miss it's $1 billion dollar loan payment.
Couldn't sleep, been watching the over night markets. Saw an interesting piece on Reuters about everyone's favorite car company. Bankruptcy is looking more and more likely. According to the news report, it appears that that one possibility being talked about is breaking up the company into two parts. One "good" GM consisting of brands that still sell, and one made up of the Bad News Bears brands that the company is having a hard time unloading.
Charlotte, NC - Bank of America will take over GM at request of the US government. When asked, Ken Lewis, CEO of Bank of America stated, “We think that GM will be a good strategic fit for Bank of America. Along with our forced acquisitions of Countrywide and Merrill Lynch we feel that this positions the company for excellent future growth prospects. We further expect this acquisition to be earnings accretive by mid-2010″
I had to do a double take when I read this, amazed considering there are about 160,000 jobs directly with GM alone in the United States, but now multiple major press sites are reporting Obama Denies Bail Out for GM & Chrysler
The White House says neither GM nor Chrysler submitted acceptable plans to receive more bailout money, setting the stage for a crisis in Detroit and putting in motion what could be the final two months of two American auto giants.
The Obama administration, however, has decided not to require the automakers to immediately repay government loan money they previously received, since that would force both companies into Chapter 11 bankruptcy.
President Barack Obama's auto industry task force was expected to offer additional aid to General Motors Corp. and Chrysler LLC while setting firm deadlines for the companies to get concessions from their stakeholders.
Buried deep in the article detail paragraphs is this:
Both companies are trying to reduce their debt by two-thirds and convince the United Auto Workers union to accept shares of stock in exchange for half of the payments into a union-run trust fund for retiree health care costs. The loan agreement also called for executive pay cuts and labor costs that are competitive with Japanese automakers with U.S. operations.
In other words, going to almost Walmart wages for advanced manufacturing jobs.
U.S. auto sales continued their free fall into February, as big rebates and low-interest financing failed to lure people back into car dealerships and showrooms.
Today General Motors reported that its sales slid 53 percent in February compared with the same month a year ago, and Chrysler sales dropped 44 percent.
Ford's sales tumbled 48 percent, despite distinguishing itself from cross-town rivals in recent months by keeping the company afloat without federal aid.
"The economic and competitive environment remains challenging," said Ken Czubay, Ford vice president for sales and marketing, in a statement. "Ironically, these times provide the best opportunity to distance Ford from the competition."
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