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GM Takes the Money and Runs

I admit I laughed when I saw this headline: “Under Restructuring, GM To Build More Cars Overseas.” Well, of course GM is going to produce more overseas — to escape its union obligations and minimize its regulatory burdens. Robert Reich explains:

It’s an almost impossible dilemma. . GM is a global company — so for that matter is AIG and the biggest Wall Street banks. That means that bailing them out doesn’t necessarily redound to the benefit of the U.S. or American workers.

More significantly, it raises fundamental questions about the purpose of bailing out these big companies. If GM is going to do more of its production overseas, then why exactly are we saving GM?

Well, that’s a tough one. We’re going to spend billions and billions in taxpayer subsidies to see jobs go to other countries because that’s the only way GM can survive. So the government and UAW have two options. They can decide not to let GM do that and hasten GM’s demise. Or they will go along and we’ll have a  subsidized GM helping drive down the rate of unemployment in Canada, Mexico and South Korea (a worthy goal but not how the bailout was sold).

Welcome to the world of the nationalized car industry. And we’re only just beginning.


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