Some thoughts on GM and the US govt's role

[gregster]

I thought I'd post some questions & comments about the US govt owning 60+% of GM.

1. If it is a stated goal of the President and Congress to lower unemployment in the US, why wouldn't they demand GM recall all of the design engineers, prototype buyers, purchasing specialists, etc. which are now employed by GM in Seoul, India, Mexico City, and other places? They let go of US workers from these roles [[over the long-term) from Detroit, Warren, and other places, and then re-hired them elsewhere in low-cost locations. Sure, the price of the personnel will be higher in Michigan and the US, but: [[A) there is plenty of building space [[look at the Warren Tech Center and/or RenCen) and [[B) the economic spin-off of employing these workers will be gained and [[C) the President can brag about repatriating jobs to the US. I always thought [[naively, perhaps) that the US govt, once in firm control of GM, would do something about this.
2. Every time I see or hear an interview with Ed Whitacre, he seems to always slip in this comment about how quickly GM will be paying back the tax payer money. An admirable statement, sure, but it you've got 3 minutes to say something, why not something about the cars they've got? I think he must've read a poll or something where he perceived the majority of car buyers in the US will not consider a GM vehicle because they received tax payer money. If this were true, does he think that after the last penny is repaid, those same people will be rushing to the dealerships? I personally think their biggest challenge is public relations and marketing to the skeptics [[read: the East and West coasts).

Other thoughts? [[please no baseless or frivolous remarks about GM)

[Huggybear]

1. Because the government wants to do an IPO for GM at some point, and this isn't going to work very well if GM suddenly boosts its operating expenses - remember that this is why analysts were clamoring for a Chapter 11.

I don't agree with the government's solution to downsizing, which put half the layoff burden on Michigan [[and a fair share of the white-collar stuff on Detroit). As if the city or the state needs another kick in the teeth. Now both need the Marshall Plan...

2. Ed Whitacre is old enough to remember the Chrysler debacle in the early 1980s, where a billion in loan guarantees was translated by the Young Republican audience into a $1 billion "handout." He would be remiss to ignore this, especially when you look at current auto industry memes like "building cars that people want" - directed at the company with the largest U.S. market share.

[Mikeg]

why wouldn't they demand GM recall all of the design engineers, prototype buyers, purchasing specialists, etc. which are now employed by GM in Seoul, India, Mexico City, and other places?

In addition to huggybear's point # 1, read this Oct. 2009 quote from GM-Latin America President Jaime Ardila to understand why it doesn't make good business sense to centralize more operations in the US:

"the [Latin America] region offers a template for what GM should do "to get the business right" by reducing models, forming a more flexible workforce and gaining concessions from dealers and suppliers....... Over 85 years of presence in Latin America, GM's operation has been the most successful unit in growth, market share, return on investment and profitability...... we operate with tremendous flexibility. Increases and reductions of production of 30% or 40% are not unusual; they are part of everyday life. We have a fixed cost structure that is easy to roll back when tough times arrive and to grow when good times come. The percentage of temporary workers on our payroll is 30% to 40% in Brazil and over 50% in the Andean countries."

[lilpup]

Another point - the automakers have always had overseas design teams to deliver to overseas markets. Ford's philosophy, and GM's is similar, has always been to have local markets served by local industry [["local" basically meaning "on a particular continent") - thus there have been Asian, Latin American, North American, European, etc. design inputs to some degree, but in the past the regional designs hadn't been globalized since globalization is really driven by political and market forces [[which is why diesel is more prominent in Europe, alternative fuels are in Brazil, and the US has yet to break away from a petroleum dominated market).