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June 11, 2010

Take the Money and Run to Mexico

Shuttered auto plant Back in December 2008-June 2009, American taxpayers saved General Motors and Chrysler with a $62 billion slice of the TARP bailout money.  The rationale for this policy was that allowing the auto giants to fail would put thousands of Americans out of work.

GM and Chysler have found an interesting way to repay us for our generosity: moving American jobs to Mexico, with help from NAFTA. Bloomberg reports:

Mexico’s share of North American auto production may rise at a quicker pace as General Motors Co., Ford Motor Co. and Chrysler Group LLC seek out workers making less than 10 percent of what their U.S. counterparts earn….Mexico’s gains will come at the expense of workers in the U.S. and Canada, said Dennis DesRosiers, president of DesRosiers Automotive Consulting Inc.

As Bloomberg reports, GM has invested $3.8 billion in new and existing Mexican plants since November 2007 while closing five U.S. auto plants since June 2005.  

NAFTA’s elimination of U.S. tariffs against vehicles produced in Mexico has given the taxpayer-supported auto manufacturers an incentive to fire workers in the U.S. and move production to Mexico. Bloomberg reports:

In addition to labor costs, automakers are attracted to Mexico because of the North American Free Trade Agreement and the country’s proximity to the U.S., Robinet [vice president of global forecasting for CSM Worldwide] said.

U.S. autoworkers have been hit hard by the Clinton-Bush trade policy. Between 2001 and 2008 alone, the number of auto manufacturing jobs in the U.S. declined by 28 percent.  

It’s pretty disgraceful that these automakers who were bailed out by the American taxpayer are siding with NAFTA rather than American workers.

(Thanks to Flickr user Bob Jagendorf for the photo of a closed auto plant in Detroit.)


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