Finishing them off

Imagine a day when Michigan based General Motors is a completely foreign firm.

Don’t think it could happen?  Consider what the “CEO of the US” said last night..

“We’ll end the corporate tax breaks for companies shipping jobs overseas”

You can take it to the next government owned bank that he means what he says.  But what does it truly mean?  Considering the stranglehold the Unions through the force of government have on Detroit’s formerly largest automaker, one would wonder what choice does a large manufacturing firm trying its best to survive have?  Tax, environmental, and labor laws in many other countries are far more relaxed and conducive to the creation of jobs through a more profitable manufacturing environment.  SOME jobs will have to be kept in those locations to maintain the bottom line and remain profitable. (Which is the entire REASON for being in business)

So what happens when these companies are punished for maintaining a profitable enterprise elsewhere?

The Obama would argue that it would encourage them to develop more domestically and abandon foreign enterprise. This is unlikely, as anyone at the helm of a for-profit business must look at all the variables.  And those variables, as in the case of General Motors, Ford, or Chrysler, being the cost of moving certain operations to countries such as Mexico, Brazil or others is hardly based on a geographical desire, but rather in a general response to the high cost of an elite employment, and an overreaching environmental mandate.  A mandate made possible by an intrusive element of government into the affairs of free enterprise, and the employment control through extortion and regulatory measures.

Consider that GM itself has recently claimed profits in overseas operations. And consider also, that its presence with manufacturing overseas is likely to reap even more profits.  The choice of whether to increase domestic production while ending the otherwise profitable foreign pursuits, or ending a relationship with a country which spawned it for all the right reasons, but then punishes its minor successes might well result in an entire uplift and abandonment of ALL domestic endeavors.

Well played CEO Obama.. well played indeed..  your next move? Ridding us of Health care? or specialized craftsmen?.

Tags: automakers, Chrysler, Ford, GM, Michigan, obama, Unions