American auto makers have decided it’s more profitable to export jobs than vehicles and other industries have been following suit. At the same time, the Republican Party is here to make sure the situation doesn’t change.
It wouldn’t be surprising if you didn’t catch it in the U.S. media, but Ford announced this week that it’s building a new plant in China that will cost $500 million and will produce 400,000 engines annually, starting in 2013.
All told, Ford has exported a little over 100,000 jobs to foreign shores while its U.S. workforce has been trimmed to 58,300. China, which also has two large Ford assembly plants, is far from the only foreign country involved. Two days ago Ford’s global boss told Sky News that Ford’s 15,000 UK workers were “the best in the world,” and he pledged to keep his plants there. Other European activity includes the Focus being built in Germany and the Fiesta in Spain and Germany.
And General Motors - whose new CEO said last week that its $50 billion bailout package would take several years to be repaid to the U.S. taxpayers - has exported over 130,000 jobs to 33 foreign countries. In the meantime, according to its own press releases, its U.S. activity over approximately the past year has involved cutting 900 dealers, closing 13 plants and terminating 13,000 positions, leaving a U.S. workforce of 68,500 employees.
In an effort to give carmakers and other corporations an incentive to stop outsourcing jobs and increase their production capabilities in the United States, the president and the Democratic leadership has been ushering legislation through Congress that would end tax deductions for companies that move jobs overseas and provide tax breaks for companies that hire new U.S. workers. It would also weaken an incredibly inappropriate tax feature that currently allows companies to defer taxes on income earned abroad.
Given the appalling conditions along Main Street, the legislation sounds like a natural economic savior but, as it turns out, it won’t have a chance to get off the ground.
On Tuesday, Senate Republicans blocked the bill.
So, in our system of circular logic, taxpayers who are suffering job losses and insecurity in the workplace will now have to continue subsidizing companies that are sending jobs overseas - thereby increasing their job losses and insecurity in the workplace.
Dave McGill, News Correspondent
Dave’s column, "The Contrarian," generally published every Friday, to Gather Essential News and other groups will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day. It will also often appear on other days of the week
Dave has been a senior officer of an eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development.
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