Posted on 12/18/2013 9:02:41 AM PST by jazusamo
Just days after the US government announced their exit from General Motors, the company announced a move that sounds like it could have come directly out of the Obama Administration playbook. GM is boasting about "creating or retaining" roughly a thousand jobs at the cost of approximately $1.3 million per job in a move that could only be viewed as a positive from a political point of view.
The heavy spending to preserve union jobs did not go unrecognized by the Obama-friendly UAW. UAW Vice President Joe Ashton stated:
Today's announcement is a win for American workers. The UAW is proud to be a part of this successful collaboration with GM that has helped rebuild the nation's economy, created good paying, union jobs in communities across the country, and brought manufacturing that was moved overseas back to the U.S. This is further proof that collective bargaining works.
I would argue that this is "further proof that collective bargaining works" only if you believe that taxpayers should be obligated to pay billions of dollars to bail out companies like GM when union wages and legacy costs drive them into bankruptcy. You would also have to believe that spending $1.3 million per job saved is efficient spending. Besides that, should the motivation of GM be to save jobs or create profits for shareholders? I can not disagree that the process works well for UAW members, but the benefits came at a high cost to American taxpayers.
GM was essentially given a blank check tied into the American taxpayers' bank account. They continue to spend the money they were gifted as if the account will never become overdrawn. The similarity to how our government spends is eerie. Even the terminology of "creating or retaining" jobs sounds identical to phrases used by the Obama Administration to justify spending billions of dollars to reward cronies and favored classes.
Incoming CEO, Mary Barra, should be wary of continuing the free-spending course set forth by the politically-influenced and Obama-appointed leadership at GM. At some point, the realization that spending billions of dollars for political gain is not a sound business strategy should sink in. If not, GM will squander the $49.5 billion that it received from US taxpayers and the risks will increase when the cyclical nature of auto sales inevitably again rears its head.
Mark Modica is an NLPC Associate Fellow.
Working link:
http://nlpc.org/stories/2013/12/17/gm-spends-13-billion-%E2%80%9Ccreate-or-retain%E2%80%9D-1000-jobs
Pigs will fly before I ever drive another GM product.
>Today’s announcement is a win for American workers.<
.
BS. Which American workers?
It is just candy for only GM.
Hear, hear.
This kind of wasteful behavior is eventually self-limiting, because the society runs out of resources. But, that limit may only occur when the society reaches a very low economic (and political) level. Soviet experiments; African klepto-economies; overpaid Greek workers come readily to mind as examples.
Well said, dead on the mark.
Pigs will fly before I ever drive another GM product.
I second that.
That is insane. Sounds like a government operation.
I was opposed to the bail-out, too, but that doesn't mean GM should never, ever again invest in production. What am I missing?
Ditto!
I would agree as long as GM invests money they earn and investors and taxpayers are not ripped off but that is not the case here.
Open and fair competition would be best for American workers. Big corporations are welfare recipients through the tax code.
Now that is effective cost analysis by GM there.
“It makes so much sense to spend $1,300,000 per job ‘kept’ that we’ll do that instead of doing a real analysis!”
I think that $10.0 billion doesn't include the bailout of the old GMC financial nor the tax credits going forward. The actual loss to the taxpayer is quite a bit higher.
You’re absolutely right, the $10.5 bil was the loss in the stock sales, the total loss will be much more.
It's pretty obvious by the last couple of gov. shutdowns...the majority of Americans want no part of Gov. spending restraints, no matter where the (monopoly)money comes from, or hows it's created.
After all, it has nothing to do with "earning" anything...because the media and the gov. have successfully convinced the majority of Americans that...it is the "responsibility" of GOVERNMENT to provide a comfortable standard of living...FOR ALL...and by any means necessary(ethical/otherwise).
...and now they don't even require taxing "rich people" to provide for the "entitled". With the creation of the Federal Reserve/other Gov. agencies(in bed with slimy, politically connected, financial institutions)whatever is needed will simply be..."conjured up"...will it not?
Look, several days after Obama was elected I saw him on TV saying "America is broke"....then he proceeded to spend $1 trillion + a year.
...how could that happen? /s
This money cannot possibly be borrowed, as no financial institution in their right mind could leverage themselves to such an impossible extent...unless there was a guarantee(or a "gimmick") to cover their a$$.
The only thing that prevented(and continues to prevent)the "worst economy since the great depression"...is the greatest Ponzi scheme in history.
...all Empires eventually fall...
$1.3 billion/1000 jobs = $1.3 million per job
Wow, and their workers make $50K plus benefits per year?
GM is going bankrupt ... again.
Yep...It won’t be a surprise if they do.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.