GM - China - Assets and hugh profits from the mainland? Who get's those?

[WhiskeyGirl]

Ralph Nader weighs in -

RALPH NADER: Well, first, we have to recognize the total autocratic, secretive way this bankruptcy was initiated. Congress, which in 1979 had thorough public hearings on the Chrysler bailout and a few years later on the structuring of the Conrail system, completely abdicated its role to the White House, that then allocated the role to a secret task force run by Wall Streeters and overseen by Timothy Geithner, Secretary of Treasury, and Larry Summers. And this is the predictable result of an autocratic, secretive process.

The common shareholders who own GM have been wiped out. They had no voice in Congress to discuss it. The auto suppliers, the auto dealers, consumer groups had no voice to discuss it in Congress. Workers had no actual voice in Congress, other than to tell Congress to lay low while the UAW was negotiating this deal, again, in private. So, we have a process which is very similar to the Chrysler process, which is a White House fiat to a bankruptcy court fiat to Fiat in Italy, if I may have a little play on words. But the bankruptcy process itself is extremely autocratic. Under Chapter 11, the judge keeps pounding the gavel and denying the claimants interventions and appeals on behalf of the combined force of the Obama task force and top brass in GM.

Now, why is this going to turn out bad? Because Obama has made the American taxpayer responsible for saving GM, to a level which will eventually reach $70 billion, but then he makes his government irresponsible by saying he doesn’t want to run GM. Well, what if GM management continues to ship its production to China, which is the grand China strategy of GM from several years back, and unemployed workers and closed factories and, by consequence, closed dealers? Is Obama going to step aside?

So, you have so many questions, Amy, that aren’t being answered. For example, are the China assets and unrepatriated profits of GM going to be included in the bankruptcy procedure, or are they going to be excluded? What about the act of closing dealers? Dealers don’t cost manufacturers anything. The franchise agreement makes certain of that. So why are we further inconveniencing motorists, rupturing their relationship over the years with dealers that are closer to home and making them travel more and more? The answer is, the fewer dealers, the more likely the price of cars go up. So there are all kinds of reasons why this should go back to Congress for thorough House and Senate hearings, if Congress wanted to adhere to its constitutional duties.

HARLEY SHAIKEN: Oh, I think Ralph Nader’s got a lot of very valid issues that he’s raising here. The fact that so much of this was done off the public stage, without congressional involvement, lends itself to the government acting as a private equity fund, versus admitting what we are doing in a moment of crisis. We are, in fact, nationalizing a major firm, not on a long-term basis, but certainly to get it through this critical moment, and doing that without the public participation, where we have a model with the loans to the Chrysler Corporation, although on a much smaller scale, that took place in the early 1980s that lends itself to this sort of hedge fund mentality, where the issue is getting in, making money for the government as quickly as possible, and getting out.

The problem with that is twofold. First, it doesn’t lend itself to the sort of long-term planning which is precisely what the industry lacked in the first place and is necessary for a viable future. And second, the taxpayer is not simply a client for a private equity fund. The taxpayer winds up picking up the social cost. For those who are impacted in terms of the unemployment, the communities that crash, the cost is incalculable. But even for the taxpayer, this is not cheap, in terms of unemployment benefits, in terms of the social cost of this kind of a contraction.

Just to put yesterday’s events in perspective, imagine an announcement that took place yesterday morning that said, “We are going to eliminate the Chrysler Corporation.” In the midst of an economic collapse, I think that would have raised a huge amount of criticism and protest. But the cuts of GM yesterday are an entity, these fourteen plants, 20,000 hourly workers, another 5,000 salaried workers, that begins to approximate the size of the Chrysler Corporation in the United States. So the scale of these cuts is rather remarkable under any circumstances, but this taking place in the midst of an unprecedented and devastating recession really compounds these broader economic problems.

So, ultimately, this isn’t simply an auto story. It’s not a Detroit story. It really is an issue of where the economy is going and how quickly and effectively we recover economically, but also in terms of a manufacturing base and in terms of the social cost of this transition.

RALPH NADER: That’s the example of the recklessness of Timothy Geithner and Barack Obama and Larry Summers in appointing a task force that has no experience in manufacturing, that basically looks at this issue as a financial issue. That is, GM is going to be restructured to make money, no matter where it makes it, in communist China or by staying here in the US.

And the most important thing here, Amy, is that the head of the task force, Steve Rattner, as of nine days ago, didn’t know the answer to the question, “Are the GM assets and huge profits in China going to be put into the bankruptcy process to satisfy claimants, creditors, litigators who are going to be wiped out in product liability litigation, or not?” And he said, “That’s an interesting question. I’ll have to look into it.” Now, that is not a man who doesn’t know that answer. He knows the answer to that question, but he wasn’t saying. And nobody in Congress was making him say it.

So we’re dealing here with a corporate state, the kind of corporate state that Franklin Delano Roosevelt called fascism in a statement to Congress in 1938. That is, when government is controlled by private economic power, that’s fascism.

http://www.democracynow.org/2009/6/2/ralph_nader_and_labor_professor_harley

[WhiskeyGirl]

"'It is unacceptable to ask U.S. workers to subsidize the exportation of their jobs,' said Representative Dennis Kucinich, whose district includes Cleveland, `the taxpayers' investment should be used to protect American plants so that American workers can build the next generation of automobiles.'"

This is only fair!  But it became self-evident on June 1 why GM wants to build cars, in Mexican and South Korea.  The Wall St. response told the story as stock prices soared.

Building cars in Mexico and South Korea with cheap labor can make for larger profits.  Profits represent all some business short-sighted unethical leaders can see.

On Lou Dobbs' CNN program, the talk show host on June 1 interviewed the new head of GM and asked point blank if it was fair to ask U.S. taxpayers to fund GM's foreign plants, which take jobs away from U.S. workers at GM.

His answer was blunt and easy to comprehend.  He explained that the costs of building autos in Mexico and South Korea was cheaper than in the U.S. and the U.S. car buyer can benefit with lower prices when GM brings its foreign built cars back to sell in the U.S.  All smiles, this new General Motors head had just added insult to injury when he graciously thanked the U.S. taxpayer for making this result possible.

http://www.politicalcortex.com/story/2009/6/3/0221/63429

Who is going to buy these cars?  The people who are losing their homes?  The 40-50 million illegal aliens they want to make citizens?