Danger of Putting Consumers Ahead of Jobs

"Ford Motor Co. plans to build a $1.6-billion auto assembly plant in Mexico, creating about 2,800 jobs there and shifting small-car production away from the United States at a time when moving jobs south of the border has become a major issue in the U.S. presidential campaign." -- Associated Press, Feb. 7, 2016

With every free-trade act, more American manufacturing businesses either go under or relocate to foreign countries. In America, the consumer appears to have won; the manufacturer, to have lost.

By way of illustration, consider GM and Ford -- two great U.S. corporations, who have had a history of being vital to the American's way of life and national defense.

In Feb. 2011, Dan Ackerson, GM's former CEO told an audience in China:

"Almost seven out of every ten automobiles ... were made outside the U.S.

"We have 11 joint ventures with SAIC [Shanghai Auto Industry Corp.] and FAW [another Chinese entity] ... We're involved in vehicle manufacturing, sales, distribution, engineering design, downstream businesses such as telematics, financing and used cars. We operate 11 assembly plants in China. Four Power train plants in eight cities across the country. We have more than 2700 dealerships and sales outlets across [China].

"We regard our 11 joint ventures as our 11 keys to success -- not just in China, but globally. Our commitment of working in China, with China and for China remains strong and focused on the future."

"We're now building out of the advanced technology center, which will bring our research and development, that is centered largely in the United States -- we're going to diversify that -- more into China because we think this market is so critically important to the success of our company."



So, why does our government allow our great corporations to relocate -- expand -- overseas? Doesn't our government realize that when GM situates its plant in China, jobs in "manufacturing, sales, distribution, engineering design, and downstream businesses go to Chinese workers rather than American workers? Don't American workers lose high-paying jobs when seven of every ten automobiles are made outside the U.S?

Who benefits in America when American companies relocate to China or Mexico? When cheaper Chinese or Mexican goods flood into the U.S.?

Certainly not U.S auto workers. They lose their jobs. American consumers are the beneficiaries. Labor is cheaper abroad, therefore, given "free trade," Mexican and Chinese goods sold and imported into the U.S. are less expensive, and that benefits U.S. consumers. And since there are more consumers who want to buy at lower prices than there are laborers, politicians have catered to the consumers.

But consider an inherent danger.

During World War II, it was American industry and innovation that made certain America would win the war. In his message to Congress of May 16, 1940, FDR spoke of the U.S. producing 50,000 planes a year. That was only possible because America had industries -- such as the auto industry -- that could be converted to war production.

In 1941, 18,466 planes were produced. By 1943, 84,853. And in 1944, to 96,270. William S. Knudsen, FDR's Office of Production and Management chairman said, "We won because we smothered the enemy in an avalanche of production, the like of which he had never seen, nor dreamed possible."

At Ford's Willow Run plant, bombers were produced at the rate of one an hour. By war's end, Ford alone had built 86,865 complete aircraft, 57,851 more airplane engines, thousands of engine superchargers and generators, and 4,291 military gliders.

So what happens when war comes, if all our auto plants are in China and Mexico? In WWII, we were the "Arsenal of Democracy." Will that be the case if we continue to allow all our manufacturers to relocate overseas? If all trained mechanics are in China and Mexico. French fries don't win wars.

America's choice to provide consumers low-cost goods at the expense of the American laborer may well have dire consequences.

Find Mr. Ackerson's remarks at youtube.com/watch?v=Lvl5Gan69Wo&feature=youtu.be. See what Fact Check.Org says about it at factcheck.org/2012/06/is-gm-becoming-china-motors/.


 Posted, April 15, 2016, QCOnline.com

Copyright 2016, John Donald O'Shea