What’s Good for General Motors is Not Necessarily Good for America

By JOEL D. JOSEPH

General Motors has a very short memory. And no loyalty. In 2009, GM received a massive and generous bailout of $49.5 billion from US taxpayers. The US government, and US taxpayers, lost $11.2 billion on its investment in General Motors. The government sold its stock in GM for $38.3 billion in December 2013.

In 1953, President Eisenhower nominated GM’s CEO, Charles Wilson, to be Secretary of Defense. During his confirmation hearing, Wilson said, “I thought what was good for the country was good for General Motors and vice versa.” Sadly, while this was true in 1953, it is no longer true.

Buick now makes four of the seven models sold in the US overseas: one in China, one in Poland, one in Canada and one in South Korea. Neither China, nor Poland, nor South Korea helped to save GM, but their economies are the beneficiaries of the “new” General Motors. To be fair, I must admit that the government of Canada (and the province of Ontario) invested $13 billion to help save GM, a small fraction of the tab paid for by US taxpayers. Canada lost about $3 billion as a result of its investment.

Canada may deserve to have one Buick model made in Ontario. Based on this math, the US deserves to have at least four Buick models made domestically. The US invested four times as much as Canada and should get four times the result. Instead, we got shafted.

The new General Motors was created to save jobs in the United States. The US government appointed a “car czar” (first Steven Rattner, currently Ron Bloom) and controlled the majority of the GM board of directors. However, none of these officials did anything to ensure the long-term creation of jobs here in the United States.

GM will begin selling its made-in-China “Buick Envision” in the United States this year. This Envision model is a compact crossover produced at a plant in the Yantai, Shandong province. This will be the first, and hopefully the last, car to be imported from China.

Buick sells the Encore subcompact crossover, imported from Bupyeong, South Korea, at its American dealerships. The Buick Regal was manufactured in Rüsselsheim, Germany, from 2009 to 2011, and then moved to Oshawa, Ontario, Canada where it is now made.

The Superbowl Ad

During Superbowl 50, Buick announced its first convertible-style car in 40 years, the Buick Cascada. The ad, however, did not mention that this new Buick is made in Gliwice, Poland and retails for $33,000. The workers at that GM’s plant in Poland make an average of about 30 zlotys per hour, the equivalent to $7.80 an hour. This is about $15,000 per year. Very few of the workers at GM’s Poland factory could afford to buy one of the cars that they manufacture, a violation of Henry Ford’s rule of paying autoworkers a decent wage. If you add on the cost of shipping these cars from Poland to the US, GM’s savings is minimal; probably less than the cost of one Super Bowl ad.

The 30-second Super Bowl ad cost GM $5 million, enough to pay Poland’s workers for 650,000 hours of work, or 300 workers for one year. The $5 million would have been better spent making the cars in Michigan, where Buick closed several plants. Instead, these plant closures have decimated the city of Flint. In addition to having toxic lead contaminated water, so many of its residents are now jobless and homeless.

The New GM

Four Buick models, all imported. Buick now manufacturers only three models in the United States: the Verano, the Enclave and the LaCrosse. So a majority of Buick’s models are now imported. If you really want to buy a Buick, you should buy one of these three domestic models.

I haven’t heard of any outcry or autoworker strikes over this massive outsourcing of American jobs. But if you’ve wondered why workers, and voters, are as mad as hell and voting for Trump and Sanders, you don’t have to look much further than General Motors and its Buick division.

Joel Joseph is chairman of the Made in the USA Foundation, a non-profit organization dedicated to promoting American-made products. Email joeldjoseph@gmail.com. Phone 310 MADE-USA(310) MADE-USA

From The Progressive Populist, March 15, 2016

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