If you thought the bailout of General Motors was about saving or creating American jobs, well, think again. Did you know that President Obama released the company from a requirement that it increase production in the United States? So of course it’s increasing production, and exports, in China. It’s amazing the things that don’t make the evening news these days. The media’s too busy vilifying Republicans to keep the American people informed.
Well, at least we still have outlets like The Washington Examiner to keep us up to speed.
Here’s what happened: In exchange for the bailout in 2009, GM promised to meet certain domestic car production targets over the next four years. The obvious point of this stipulation was to ensure that GM jobs remained here at home and weren’t shipped overseas. The production targets started at 1.8 million in 2010 and were supposed to rise to 2.26 million by 2014. GM repeatedly missed the targets, beginning with an 81,000-unit shortfall the first year. Production increased thereafter, but never quite enough to meet the targets. Last year, GM fell about 13,000 cars short of its 2 million target.
How did it do this year? GM refuses to say. But in February, GM announced in its annual report to shareholders that Treasury had agreed to “irrevocably waive certain of its rights” regarding the federal loan. These included “certain manufacturing volume requirements.” Guess what happened next? GM announced in June that it would stop releasing its North American production figures altogether. Its spokesman tried to justify this move with Orwellian doublespeak about how providing more information would result in “an incomplete data set to look at.”
The same month, GM announced it would boost its output from its China plants by 70 percent. It is not just selling Chinese-made cars to the Chinese, either. GM is nearly doubling its export production capacity there from 77,000 units to 130,000. It doesn’t take a Ph.D. in economics to see what is really going on. GM cannot make the domestic production targets and still turn a profit. It wants to be spared the embarrassment of having everyone know that. Obama, who is in this as deep as anyone can be, doesn’t want the embarrassment, either. So both buried the news.
Read the whole thing. It’s another example where Mitt Romney was right. Oh, and when it’s all said and done we the taxpayers will have taken about a $10 billion loss.