GM doing well in China after the Taxpayer-Funded Obama Administration Bailout

Posted by PITHOCRATES - September 23rd, 2012

Week in Review

President Obama saved General Motors (GM).  He bailed them out.  Instead of letting them go through normal bankruptcy proceedings where the creditors are protected and contracts are rewritten so the company can become competitive again.  The Obama bailout didn’t follow normal bankruptcy proceedings.  Nor contract law.  Secured creditors became unsecured by presidential decree.  They transferred ownership to the UAW.  And billions of taxpayers’ money propped up the UAW pension fund.  None of which improved GM’s competitiveness.  And the Obama administration poured more money into the Chevy Volt that no one wanted and few are buying.

But the president did all of these things to save US jobs.  Even though normal bankruptcy proceedings would have made GM more competitive and actually created more jobs.  In fact, under normal bankruptcy proceedings those new jobs would probably have been in the US (see GM opens China test track in effort to remain market leader by Ben Klayman posted 9/21/2012 on Reuters).

General Motors Co(GM.N) opened a new, large vehicle test track west of Shanghai on Saturday as part of its push to retain its leading market share in the world’s largest auto market.

The No. 1 U.S. automaker and its joint venture partners, including SAIC Motor (600104.SS), invested about $252.5 million to build what GM China President Kevin Wale called the country’s largest proving ground…

GM invests $1.5 billion annually in China.

The government still owns GM stock.  So that investment in China was technically made by a company the US government partially owns.  And some of those dollars invested in China were US taxpayer dollars.  So the Obama bailout of GM has allowed GM to invest in China.  And to create jobs in China.

GM is making the investment despite a slowing in the Chinese auto market because it is focused on the long-term growth prospects, Wale said…

GM, whose joint venture in China began building vehicles in 1999, sells under the Buick, Chevrolet, Cadillac, Opel, Wuling, Baojun and Jiefing brands. Wale said GM had to continue to roll out new products as the market grows, including adding products in the SUV and luxury car segments.

The government has raised fuel economy standards and pushed the Chevy Volt.  So we would stop buying the cars we want to buy.  And start buying the cars they want us to buy.  Like the Chevy Volt.  While the Chinese are expanding the SUV and luxury car segments.  Making it easy for the Chinese to buy the cars they want to buy.  Thanks to that taxpayer-financed government bailout.

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