GM

[20Camaro11]

Originally Posted by StreetStrip

What's wrong with this thread for it to not "survive"?

Anyway, I bet ROTR was fantastic. Eh?

There seemed to be a political tinge starting in the thread.... I don't necessarily mind, I find good discussion in these sort of topics interesting.

ROTR was very good. Korn was by far the best set I saw over the weekend. If anyone in this forum loves Rock and lives with 500 miles of Columbus, I would highly recommend this show. Dollar for Dollar, it is the best rock show I have ever seen. The organizers do a great job.

[fielderLS3]

Originally Posted by The_Blur

Here's a bigger question to consider:

Why don't other manufacturers buy or build factories in the US?

Maybe answering this question will explain why US manufacturers feel investment outside our borders makes more sense.

Actually, other manufactures are building factories here. Honda, Toyota, Nissan, Hyundai, Subaru, BMW, VW, Mitsubishi....there are probably a few more, but those are just the ones I can think of off the top of my head. The foreign companies are racing to get in while our's are racing to get out. The difference between them is just three letters: U-A-W

[a_Username]

Don't mind me.

[coolman]

Originally Posted by a_Username

Don't mind me.

Looks like nobodies building shit these days.

[8cd03gro]

Originally Posted by 2010-1SS-IBM

You should ask yourself why that is, though. Why do American corporations need to move some operations outside the US to make money?

Because their corporate officers make millions of dollars (often tens of millions) a piece annually whether the company succeeds or fails and the UAW sucks the little hope left out. I'm not just talking about GM either, so don't take it that way.

[The_Blur]

Here is a list of Toyota's factories in America.

Here is a list of GM factories all over. Please take your time to count the US plants and compare with Toyota.

The rest, you'll have to do yourself.

Type into Wikipedia "list of [insert automaker here] factories" as a query. Do this with several automakers. Compare their domestic plants with GM's domestic plants.

Are you really complaining that GM is investing in a plant in Mexico? Why don't you complain instead that Nissan doesn't do enough to support the US economy? Why don't the Japanese complain that Honda is building a couple of plants over here? I'll answer this one for you. Even the Japanese, living in a culture inundated with advertising propaganda, understand that building one car in one country is a great publicity stunt that earns sales. Unfortunately, Americans ignore the obvious logic that building all cars here is expensive.

Let's do some math. Let's assume that all executives, workers, and everyone else makes the same exact money. If a factory in America has more expensive land, insurance, and technology, then the otherwise even playing field is no longer even. That cost has to be offset by reducing wages for someone. Now workers cost more, so executives have to make even less. Now all the good ones go to companies that pay them more. The product begins to suck. The organized workers begin striking over pay and benefits. Crippled by production loss, the company must comply. Quality sucks. Everything sucks with the exception of Corvettes and trucks.

For reasons hard for me to identify, this is when GM found pride. GM remembered that it is a company built in America by Americans, and those people deserve the best damned cars out there. The best car won, and that's why we drive Camaros instead of 370Zs or Geneses. The CTS kicks ass, and so does the Malibu, Cruze, and everything else.

GM did this because costs were reduced. GM is going to stay in business this time by making good business decisions. I don't want to question GM's decision to invest in a Mexican plant. I'm just happy to see GM in business as an American-managed company. Let's not go nuts and expect everything to get made here.

[Number 3]

Originally Posted by fielderLS3

Based on the information in those articles, the US taxpayer is still owed $33.7 billion without interest.

Actually no. The U.S. Treasury holds a less than 40% stake in GM. The loans, however, were all repaid IN FULL.

Originally Posted by StreetStrip

Not only that, they used other TARP funds to make that initial loan repayment on their original TARP "loan". The ruling class thinks we're all dumb. LOL!

GM's sales were in the tank and they needed some PR to shake the Government Motor's moniker....so what did they do? Well, what any pseudo government organization does, turn to the government where they shuffled money around to make us think they repaid some of their loan.

Read it and weep: http://www.foxnews.com/opinion/2010/...payer-bailout/

I'll ask the question again, if I loan you $500 because you can't pay your rent because you ask me for help. You then find that you are able to rearrange your finances and are then able to pay me the $500 back, did you repay the loan? I say yes, but for some reason there are people out there that want to claim, "no, you haven't repaid me".

I simply ask if you paid me the $500 back, even if it was my own money, how in the world do you think I didn't pay you back? Do you somehow think you should get ANOTHER $500????

I just don't get it.

Originally Posted by The_Blur

Here's a bigger question to consider:

Why don't other manufacturers buy or build factories in the US?

Maybe answering this question will explain why US manufacturers feel investment outside our borders makes more sense.

Labor costs for one. You have to keep in mind, many of the factories is Mexico are making products you never see. Ever see a Chevrolet Chevy? No? Did you know much of GMs manufactured products in Mexico are for Mexico and Central America? No?

GM is a global company. GM has plants in Mexico that build products for markets other than the U.S. Did you know GM will have a plant in Mexico building the 2012 Sonic/Aveo. Did you further know that it won't be shipped here, but rather the U.S. produt will be built just a few miles up the road from me in Orion Michigan?

Originally Posted by fielderLS3

Actually, other manufactures are building factories here. Honda, Toyota, Nissan, Hyundai, Subaru, BMW, VW, Mitsubishi....there are probably a few more, but those are just the ones I can think of off the top of my head. The foreign companies are racing to get in while our's are racing to get out. The difference between them is just three letters: U-A-W

This because most of GM, Ford and Chrysler are mature plants. They aren't builiding many new plants.

But if you were a Korean or Japanes or German car company and a State threw $100 million at the company for property, buildings and training wouldn't you be tempted? And if you build it here, you can save over $500 of ocean shipping. Holy crap and you guys bitch about the bailing out GM?

Again, I don't get it. Ok to give 100's of millions to overseas companies to secure 2 or 3,000 jobs is ok, but to help GM is some kind of sin against all mankind.

Originally Posted by The_Blur

Here is a list of Toyota's factories in America.

Here is a list of GM factories all over. Please take your time to count the US plants and compare with Toyota.

The rest, you'll have to do yourself.

Type into Wikipedia "list of [insert automaker here] factories" as a query. Do this with several automakers. Compare their domestic plants with GM's domestic plants.

Are you really complaining that GM is investing in a plant in Mexico? Why don't you complain instead that Nissan doesn't do enough to support the US economy? Why don't the Japanese complain that Honda is building a couple of plants over here? I'll answer this one for you. Even the Japanese, living in a culture inundated with advertising propaganda, understand that building one car in one country is a great publicity stunt that earns sales. Unfortunately, Americans ignore the obvious logic that building all cars here is expensive.

Let's do some math. Let's assume that all executives, workers, and everyone else makes the same exact money. If a factory in America has more expensive land, insurance, and technology, then the otherwise even playing field is no longer even. That cost has to be offset by reducing wages for someone. Now workers cost more, so executives have to make even less. Now all the good ones go to companies that pay them more. The product begins to suck. The organized workers begin striking over pay and benefits. Crippled by production loss, the company must comply. Quality sucks. Everything sucks with the exception of Corvettes and trucks.

For reasons hard for me to identify, this is when GM found pride. GM remembered that it is a company built in America by Americans, and those people deserve the best damned cars out there. The best car won, and that's why we drive Camaros instead of 370Zs or Geneses. The CTS kicks ass, and so does the Malibu, Cruze, and everything else.

GM did this because costs were reduced. GM is going to stay in business this time by making good business decisions. I don't want to question GM's decision to invest in a Mexican plant. I'm just happy to see GM in business as an American-managed company. Let's not go nuts and expect everything to get made here.

Ahhhhhh, reason. Thanks, Blur!

[a_Username]

Originally Posted by Number 3

Ahhhhhh, reason. Thanks, Blur!

Hardly. Seemed like protectionist rhetoric to me.

[Mr. Wyndham]

Surprisingly...short of the Moronic Title. That article was one of the few "straight-to-the-point" news reports I've read in a LONG time....

Anyways, after reading some of the stupid comments on that site, and then reading through here, I had a great long post typed up...

But I shortened it:

This thread is full of fail....

[The_Blur]

Originally Posted by a_Username

Hardly. Seemed like protectionist rhetoric to me.

It's only rhetoric if you're running for office. Seriously though, it is more expensive to do business here than elsewhere. For the same revenues, it just makes sense to consider alternatives to stay competitive.

[a_Username]

Originally Posted by The_Blur

It's only rhetoric if you're running for office. Seriously though, it is more expensive to do business here than elsewhere. For the same revenues, it just makes sense to consider alternatives to stay competitive.

Yes, but imposing tariffs, devaluing the currency, outright banning free trade, or dabbling in a little state capitalism is not the way to "stay competitive"; these policies actually lead to the opposite of what you want to happen. Not saying you specifically proposed or even implied these views, but it was just a general implication that I got from reading a few replies to this thread.

[DGthe3]

Originally Posted by StreetStrip

Perhaps GM can invest enough in Mexican factories and create enough jobs to keep their people from sneaking into America! Of course, with America's unemployment rate hovering at 10% maybe we'll be the ones sneaking into Mexico for those GM jobs!

Not only that, it's to build "high efficiency" motors to meet the new CAFE standards imposed by the Obama administration. So, Obama gives GM money borrowed on the backs of future generations, GM turns around and invests a large chunk of that borrowed money in Mexican factories to build cars dictated by his administration.

You just can't make this stuff up.

Would that be the up-comming 35 mpg CAFE regulation? Because Bush signed that one in 2007 and I think the even stricter 62 mpg in 2025 has been shot down as being impractical.

Originally Posted by a_Username

Yes, but imposing tariffs, devaluing the currency, outright banning free trade, or dabbling in a little state capitalism is not the way to "stay competitive"; these policies actually lead to the opposite of what you want to happen. Not saying you specifically proposed or even implied these views, but it was just a general implication that I got from reading a few replies to this thread.

It doesn't look like many have suggested those sorts of things, or implied them. Mainly the ones that wanted businesses to be more competitive wanted lower wages for workers and less regulation, in effect making America more like Mexico to keep US jobs from going to Mexico. I see some rather obvious problems with that logic, but you probably see it more clearly than I, right Mr Economist.

But to address what you mentioned ... you're saying that its better for global companies to have their home market be 100% free and open, meanwhile their international competitors enjoy a home field advantage (due to the various methods you mentioned)? Sounds like its great for making everyone else competitive, but not so much for the domestic companies. What I personally endorse are mirroring the trade practices of other nations, at least whats practical. If they want free trade, good for them. But if they try and protect their market so they can sell to you without you selling to them ... that doesn't sit well with me.

[a_Username]

Originally Posted by DGthe3

It doesn't look like many have suggested those sorts of things, or implied them. Mainly the ones that wanted businesses to be more competitive wanted lower wages for workers and less regulation, in effect making America more like Mexico to keep US jobs from going to Mexico. I see some rather obvious problems with that logic, but you probably see it more clearly than I, right Mr Economist.

You're right that many haven't, which is why I specifically said "few replies." For example, "dabbling in state capitalism":

Originally Posted by Number 3

But if you were a Korean or Japanes or German car company and a State threw $100 million at the company for property, buildings and training wouldn't you be tempted? And if you build it here, you can save over $500 of ocean shipping. Holy crap and you guys bitch about the bailing out GM?

Again, I don't get it. Ok to give 100's of millions to overseas companies to secure 2 or 3,000 jobs is ok, but to help GM is some kind of sin against all mankind.

I did very well see more posts relative to the questionable ones, such as the one above, pinpoint part of the actual problem. That is, many recognized the impact these arbitrary wage rates have had on GM and other companies. Also, I'm not defending the type of subsidies and state capitalist characteristics that Number 3 describes. Anyone who is interested in economics knows about the "crowding out" effect that public investment has on private investment, or that government can only spend money it raises through taxes, rather it be present or future taxes makes no difference.

But to address what you mentioned ... you're saying that its better for global companies to have their home market be 100% free and open, meanwhile their international competitors enjoy a home field advantage (due to the various methods you mentioned)?

I wouldn't call those methods an advantage in the least. The first thing you have to do is convince people that government is better at allocating resources than the market. The inherent assumption here is that the (international) market failed, and it did not optimally allocate resources to say the (United States') manufacturing industry. I believe Krugman, who I might add is not your typical "free market = answer to everything" kind of guy, says it best about the manufacturing industry's "decline,"

In 1970 US residents spent 46 percent of their outlays on goods (manufacturing, grown or mined) and 54 percent on services and construction. By 1991, the shares were 40.7 and 59.3 percent, respectively, as people began buying comparatively more health care, travel, entertainment, legal services, fast food and so on. It is hardly surprising, given this shift, that manufacturing has become a less important part of the economy."

Krugman is simply applying the allocative ability of the market to a specific industry. This has happened primarily because the manufacturing industry is requiring less and less workers for its required output. And it is this high productivity that demands both higher paid and more skillful jobs to be fulfilled by the most productive. A side effect of this increased productivity means that capital can now be invested more in the service industry.



The "currency devaluation" method, for example, may increase exports, but it does so at a relatively high cost to consumers (really everyone). Consumers lose purchasing power thus reducing the amount of goods they can buy, which in turn results in a lower standard of living. So, how does buying fewer goods than before help strengthen our economy? Would you identify a regressing standard of living with economic progress? In a real world application, it is probable that Japan's infamous "Lost Decade" may not have happened without a government so keen on devaluing their currency combined with uncontrolled credit expansion and making its manufacturers "competitive" at the expense of making its citizens poorer.

I believe we all know why banning "free trade," which I must say is nonexistent in this country and any other, is bad for our economy. In short, yes I do believe that unhampered free trade will only make us richer, more competitive, and better off in the long run.

Sounds like its great for making everyone else competitive, but not so much for the domestic companies.

I would advise you to look up the division of labor and trade. These two phenomena are primarily what leads to economic growth; economic growth has never been the product of government policy. Also, you have nothing to fear, considering it is mostly comparative advantage and not absolute advantage that drives trade. That is, no country will ever have an absolute advantage in the production of automobiles, which means that the United States will likely always have at least a few automakers. But the comparative advantage may shift from country to country.

For the sake of consistency of the protectionist argument, what if we take this argument to its logical conclusion? Specifically, where is the outrage at the "trade deficit" between Tennessee and Kentucky or any other two states? Should Tennessee not impose laws to "equalize" wage rates by imposing tariffs on the "inexpensive foreign labor" of its northern counterpart? Also, does this mean that consumers can never patronize low-cost firms because it is "unfair" for them to have lower costs than inefficient competitors?

What I personally endorse are mirroring the trade practices of other nations, at least whats practical.

Continuing on the example above, would the retaliatory tariffs made by the Kentucky government not "sit well" with you either? Of course, you don't have to take my word for any of this; I believe Smoot and Hawley knew very well the harmful effects of tariffs and quotas.

If they want free trade, good for them. But if they try and protect their market so they can sell to you without you selling to them ... that doesn't sit well with me.

I'm interested in the consumer. I have no interest or sympathy to whom try their hand in the market and failed.

Originally Posted by Murray Rothbard

So, by imposing protective tariffs and quotas to save, bail out, and keep in place less efficient U.S. textile or auto or microchip firms, the protectionists are not only injuring the American consumer. They are also harming efficient U.S. firms and industries, which are prevented from employing resources now locked into incompetent firms, and who could otherwise be able to expand and sell their efficient products at home and abroad.

[fielderLS3]

Originally Posted by Number 3

Actually no. The U.S. Treasury holds a less than 40% stake in GM. The loans, however, were all repaid IN FULL.

The government put in $49.5 billion, and got out $15.8 billion so far. $49.5B-$15.8B=$33.7B left to go.

Originally Posted by Number 3

I simply ask if you paid me the $500 back, even if it was my own money, how in the world do you think I didn't pay you back? Do you somehow think you should get ANOTHER $500????

Yes, because ANOTHER $500 was borrowed. If you paid back the loan by simply handing back $500 to the creditor, the debt is paid. BUT, if you paid back the original $500 loan by refinancing (borrowing a second $500 at a better interest rate to pay off the first $500), you still owe $500. You "paid" the first loan back, but now you have the second. If you refinance your mortgage to a lower interest rate, do you not still have a mortgage? This is what GM did. They paid off the "bailout" loan with a refinance loan, and have yet to pay back the refinance loan.

Originally Posted by a_Username

Yes, but imposing tariffs, devaluing the currency, outright banning free trade, or dabbling in a little state capitalism is not the way to "stay competitive"; these policies actually lead to the opposite of what you want to happen. Not saying you specifically proposed or even implied these views, but it was just a general implication that I got from reading a few replies to this thread.

I disagree. Our nation's industrial revolution happened at a time of protective tariffs, and that history is repeating itself with China, India, etc. What we have now is anything but free trade. It is "managed" trade at best, and the managers are not us.

Originally Posted by DGthe3

But to address what you mentioned ... you're saying that its better for global companies to have their home market be 100% free and open, meanwhile their international competitors enjoy a home field advantage (due to the various methods you mentioned)? Sounds like its great for making everyone else competitive, but not so much for the domestic companies. What I personally endorse are mirroring the trade practices of other nations, at least whats practical. If they want free trade, good for them. But if they try and protect their market so they can sell to you without you selling to them ... that doesn't sit well with me.

Amen. Give reciprocity or get nothing. That should be the fundamental demand of any trade agreement. Otherwise, it won't work (at least not for us).