GM Using Taxpayer Bailout Money To Invest Overseas

On December 19, 2008, President Bush announced that as part of a bailout plan of U.S. automakers, General Motors would be receiving $9.4 trillion in taxpayer funds. Unfortunately, GM has since decided to cut the jobs of 10,000 salaried U.S. workers, while investing heavily in their foreign operations.

When the CEOs of the big three U.S. automakers went before the Senate Banking Committee, Sen. John Tester (D-MT) asked whether or not they planned to invest in overseas markets in the near future. GM CEO Rick Wagoner assured Sen. Tester that the bailout money would be spent at home rather than overseas.

The following exchange took place between the Senator from Montana and Wagoner:

SEN. JON TESTER : "I don't want to give American taxpayer dollars to somebody who's going to invest it in some other country than this country. That's been a problem."

WAGONER: "Sir, let me just be clear. No funding that comes out of this would go to fund the facility overseas."

Despite Wagoner´s denial, president of GM Brazil, Jaime Ardilar recently told Gazeta Mercantil that General Motors would be investing $1 billion in Brazil to "complete the renovation of the line of products up to 2012." Ardilar went on to say: "It wouldn't be logical to withdraw the investment from where we're growing, and our goal is to protect investments in emerging markets."

Though the head of GM came to Congress pleading poverty, as well as his desire to keep Americans working, and assured Sen. Tester that any money received would be used in this country, our tax money will be used to grow their operation in Brazil and hire Brazilians.

Wagoner went on that day to say that he would investigate the rumors that GM planned a major investment and expansion of their operations in Mexico, though he claimed to be unaware of any such plans. However, he never mentioned anything about their plans to spend $1 billion in Brazil…Perhaps, a lie of omission? Or, maybe we are supposed to believe the billion dollar plan simply slipped his mind!

While Wagoner bemoaned years of GM´s slumping sales in this country, he failed to mention the booming business his company is doing in other parts of the world. GM´s LAAM (Latin America, Africa, and the Middle East) division saw sales totaling $14.6 billion in 2006 alone. In 2007, president of GM LAAM Maureen Kempston Darkes said of the previous year: "It was a very positive year for our business in Latin America. We had all-time sales records in Argentina, Brazil, Colombia, Ecuador and Venezuela."

Those rosy sales numbers continued in 2008, despite dismal U.S. sales. In fact, all-time annual GM sales records were set in Argentina, Brazil, Chile, Ecuador, Paraguay, Peru, Uruguay, Egypt, Kenya, North Africa and Middle East markets in 2008. Also, market share was greatly increased last year in Ecuador, Paraguay, Peru, Uruguay, Egypt, Kenya, Israel, Middle East, North Africa, South Africa and Venezuela.

In 2008, General Motors LAAM sold over 1.276 million vehicles, with their market sahre increasing to 17.1 percent for the year. Darkes recently announced: "We are pleased to post our fifth consecutive record sales year, with the Chevrolet brand continuing to lead the growth throughout the region."

So not only do we now have to ask the question…Why isn´t Congress demanding that GM immediately return our money? But perhaps more importantly…Why wasn´t this information brought up during the auto bailout hearings?

My question…Why doesn´t GM bail itself out?

With every new day, we are faced with yet another example of how our money is being wasted and given to scam artists. Whether they reside on Wall Street or in Detroit, it does not matter. Ultimately, the American people will always be the ones left to pay the bill.

The United States is now losing jobs to the tune of 500,000 a month. All the while, new jobs are being created in other countries, with our money!

If GM wants to re-create brand loyalty amongst American consumers, they have a lot to learn.