Monday, February 2, 2009

US auto maker to spend TARP money in Brazil

Hey thanks US tax payers! It turns out General Motors is going to take a billion dollars of the TARP monies bailout and invest it in their operations in Brazil. Check this out:

General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program

By Russ Dallen
Latin American Herald Tribune staff

SAO PAULO -- General Motors plans to invest $1 billion in Brazil to avoid the kind of problems the U.S. automaker is facing in its home market, said the beleaguered car maker.

According to the president of GM Brazil-Mercosur, Jaime Ardila, the funding will come from the package of financial aid that the manufacturer will receive from the U.S. government and will be used to "complete the renovation of the line of products up to 2012."

"It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets," he said in a statement published by the business daily Gazeta Mercantil.

Meanwhile, he cut the company's revenue forecast for this year by 14% to $9.5 billion from $11 billion, as the economic crisis began to cause rapid slowdowns in sales.

GM already announced three programs of paid leave, and Ardila added that GM Brazil "is going to wait and see how the market behaves in order to know what decision to take" with regard to possible layoffs.

For Ardila, the injection in Brazil's automobile sector of 8 billion reais ($3.51 billion) recently announced by the federal and state governments of Sao Paulo "has already begun to revive sales," which fell by 12% in October.

The executive said that the company will operate a "conservative" scenario in 2009 with an estimated production of 2.6 million units, and another more "optimistic" that contemplates sales of 2.9 million.

This year sales will reach 2.85 million vehicles, which represents a growth of 15% over last year.

Click here to watch a Detroit News video about Ford's state of the art plant in Brazil - the most advanced auto assembly plant in the world.

So how's this for a theory: The big three auto makers use the financial crisis in the US to essentially go out of business in many places in the US - thus busting the United Auto Workers' union in the process. Then they play up the bold new fuel efficient vehicles they ALREADY HAVE IN PRODUCTION in places like Brazil (and where they are making record profits). Soon GM and Ford (I've yet to read about Chrysler) are IMPORTING sporty little flex-fuel vehicles to the US market.

No union, no legacy costs, no heavy burden of health care costs. Just a lean new start.

Hey auto workers -- thanks for your loyalty! Tough luck.

1 comment:

GingerV said...

I feel some 'pissed' feeling about this. I can't imagine that the bail out was intended to aid growth in other contries, but was intended to keep Americns employed.... another Bush big business legacy.