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Despite bailout, Americans still could buy GM cars made in China

By   /   May 22, 2013  /   News  /   No Comments

AP photo

NEW MARKET: A Chinese boy walks past a Chevrolet car during a 2012 car show in Xiangyang city, in central China’s Hubei province.

By Chris Butler | Tennessee Watchdog

If you assumed the $50-billion taxpayer bailout of General Motors means the next GM car you buy is made in the USA, you may be in for a surprise.

GM has established 14 production facilities in China and is selling GM cars to the Chinese after investing $8 billion into that nation and hiring 6,000 workers.

GM officials are planning even more Chinese production facilities beyond that, GM spokesman Greg Martin told Tennessee Watchdog.

In fact, GM executives are so eager to foster goodwill with their new international clients that one official said last month that American consumers might eventually buy GM automobiles manufactured in China.

“It could very well happen. You know, I’m not sharing any plans with you, but we try to keep open as to what makes sense,” GM China President Bob Socia told Autoblog.com while speaking at the Shanghai Motor Show.

“We’re open to be doing that. There’s no reason why we can’t be exporting to the states, and obviously the states are exporting here.”

In his interview with Tennessee Watchdog, Martin confirmed that Socia made the statement, though Martin said GM has no plans to actually do it. He, however, wouldn’t rule out the plans either.

“What that gentleman (Socia) was talking about was something that might happen well down the road,” Martin said of Socia’s remarks. “I guess no good deed goes unpunished.

“It’s something we could do, for sure. Everybody else does it, so why not us?”

But that seems counter to what President Barack Obama said during the 2012 presidential campaign.

During a debate with Republican nominee Mitt Romney, the former Massachusetts goveror told the president that the U.S. government should not have bailed out GM and instead should have allowed the company to undergo a managed bankruptcy.

Obama’s response:

“If we had taken your advice, Gov. Romney, about our auto industry, we’d be buying cars from China instead of selling cars to China.”


The U.S. Treasury Department, which oversaw the bailout, is preparing to sell its remaining  GM stock. But, according to several reports, U.S. taxpayers could lose an estimated $5 billion from the bailout.

GM, meanwhile, has about 100,000 employees in the United States at about 40 different plants. The company employs some 1,800 hourly and salaried employees at its plant in Spring Hill, Tenn.

Martin said the number of GM employees in the United States has fallen by 76,000 since 2005.

As Tennessee Watchdog reported last year, GM officials had $35 billion in cash reserves, but company officials are aggressively — and successfully — pursuing state governments, including Tennessee, for tax incentives and state grant money.

Long-term strategy of exports?

Another GM spokesman, Jim Cain, told Tennessee Watchdog the automaker’s interest in China right now is very intense as part of the company’s long-term growth strategy. But Martin said GM has no plans to export Chinese-made cars anywhere outside of the country.

“There will be no exports of these cars built in China. Cars that are built in China are sold in China,” he said, though he qualified that when asked about a Wall Street Journal opinion piece that said more than 100,000 Chinese-made cars would go outside of the country.

“Well, some of those vehicles may go to Indonesia, Taiwan or Korea. I don’t know if it’s 100,000 plus, but those places I just cited are also bases for smaller Asian markets over there for us,” he said.

Visitors look at a Chevrolet Camaro of General Motors (GM) during the 15th Shanghai International Automobile Industry Exhibition, known as Auto Shanghai 2013, in Shanghai, China, 20 April 2013.

Visitors look at a Chevrolet Camaro of General Motors (GM) during the 15th Shanghai International Automobile Industry Exhibition, known as Auto Shanghai 2013, in Shanghai, China, 20 April 2013.

Edward Niedermeyer, the author of the WSJ piece, told Tennessee Watchdog that China is fast becoming GM’s global export base.

“I’ll take GM at their word when they say that it is good business for them to go to China, if it is in service of a commitment to make American taxpayers whole,” said Niedermeyer, the former editor of thetruthaboutcars.com.

“I will support GM in whatever they want to do. My issue is that they are being completely cynical about the bailout and about their obligations to the American taxpayer.”

GM has invested about half as much of its money in China as it has the United States, Martin said.

Contact Christopher Butler at chris@tennesseewatchdog.org

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Chris is an investigative reporter for Tennessee Watchdog. He has 13 years experience in the journalism field working with the Beacon Center of Tennessee, the Ruston Daily Leader, the Wise County Messenger, Highlands Today and the Martin County, Florida edition of the Hometown News. Chris is an award-winning writer and photographer whose work has been recognized by Matt Drudge, Rush Limbaugh and FOX News, among others. Because of Chris' stories, the Washington Post named Tennessee Watchdog one of the nation's best political blogs. Chris can be reached on Twitter @cdbutler1204 and by email at chris@tennesseewatchdog.org.