Cue “Fanfare for the Common Man” and rev up the Government Motors engines. Wednesday is Great American Auto Bailout Day at the Democratic National Convention. Party propagandists have prepared a prime-time-ready film touting the “rescue’s” benefits for American workers. UAW President Bob King will sing the savior-in-chief’s praises.
Only in a fantasyland where America has 57 states, “JOBS” is a three-letter word and bailouts are “achievements” does Obama’s rescue math add up. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry,” Obama vows. God help the American worker.
But like all of the economic success stories manufactured by the White House, the $85 billion government handout is a big fat farce.
While Team Obama lambastes GOP rival Mitt Romney for outsourcing, Government Motors is now planning to invest $1 billion over the next five years — not in America, but in Russia. That’s on top of $7 billion total in China, close to $1 billion in Mexico, and $600 million for a shirt sponsorship deal with Manchester United, the British soccer club.
GM is once again flirting with bankruptcy despite massive government purchases propping up its sales figures. GM stock is rock-bottom. Losses continue to be revised in the wrong direction. According to The Detroit News, “The Treasury Department says in a new report the government expects to lose more than $25 billion on the $85 billion auto bailout. That’s 15 percent higher than its previous forecast.”
The claims that GM paid back its taxpayer-funded loans “in full” — a story peddled in campaign ads narrated by Hollywood actor Tom Hanks — were debunked by the Treasury Department’s TARP watchdog this summer. GM still owes nearly $30 billion of the $50 billion it received, and its lending arm still owes nearly $15 billion of the more than $17 billion it received. Bailout watchdog Mark Modica of the National Legal and Policy Center adds: “In addition to U.S. taxpayers anteing up, Canada put in over $10 billion, and GM was relieved of about $28 billion of bondholder obligations as UAW claims were protected. That’s an improvement of almost $90 billion to the balance sheet, and the company still lags the competition.”
While the Obama administration wraps the auto bailout in red, white and blue, it’s foreign workers and overseas plants that are reaping redistributive rewards.
GM has increased its manufacturing capacity in China by an estimated 55 percent after the bailout, according to industry watchers. GM’s Dan Akerson crowed at the Beijing auto show earlier this year: “One of our aims is to help grow a new generation of automotive engineers, designers and leaders right here in China.” The U.S. auto giant’s ventures with the Communist regime include Shanghai OnStar Telematics Co., Ltd.; GM China Advanced Technical Center; FAW-GM Light Duty Commercial Vehicle Co., Ltd., in Harbin, Heilongjiang; FAW-GM’s Changchun plant in Changchun, Jilin; FAW-GM Hongta Yunnan Automobile Manufacturing Co., Ltd., in Qujing, Yunnan; and Shanghai Chengxin Used Car Operation and Management Co., Ltd.
In Europe, the UAW’s appointee to the Government Motors Board of Directors, Steve Girsky, recklessly pushed the feds to hold onto GM’s failing German-based Opel AG. The Great American Auto Bailout has been subsidizing this hemorrhaging enterprise while Obama failed to deliver on his 2008 campaign promise to salvage plants like the one in GOP vice presidential candidate Paul Ryan’s hometown of Janesville, Wis. According to Forbes magazine, “GM Europe, comprised mostly of Opel and its sister brand, Vauxhall, lost $617 million in the first half of 2012, on top of a $747 million loss in 2011 and a $1.8 billion loss in 2010. In all, GM has lost almost $17 billion in Europe since 1999.”