President Barack Obama has promised to strengthen the manufacturing sector in the United States.
During the past few decades as America became a more consumer-oriented economy, the manufacturing sector has shrunk.
Many economists have argued that this is a structural change in the economy. They argue that just like a much smaller percentage of Americans work on farms than 100 years ago, so too that jobs to build cars will decrease no matter what the government tries to do.
They argue that the new reality is that jobs will come from companies like Apple, Google and other tech giants, a section in which America is an economic powerhouse. Additionally, if the president didn't hate oil and natural gas, the United States could experience even more of a boom in this sector.
Obama decided to go with the theory that manufacturing jobs are the future of American employment growth. The president bailed out GM and Chrysler in a questionable manner, which put the union members ahead of the creditors. The money for the bailout came courtesy of the U.S. taxpayer.
It isn't surprising that Obama wants money to be thrown at companies with unions like GM, and not companies like Apple, which doesn't have a unionized work force.
GM is doing much better now and selling cars, but the biggest spurt isn't occurring in the United States. China is currently the world’s largest auto market, with more cars sold there in a year than any other country. This growth has been slowing down as the government tries to cool the economy and clamp down on lending — enter GM.
General Motors recently announced plans to increase its dealership network in China by 600, from around 2,900 to 3,500.
GM has been focusing on its new Cadillac model, the 2012 Cadillac XTS.
GM said that the car would be build it in China (not America), and that it plans to follow up with an electric luxury-car line. GM is ignoring the recent slowdown in China and has predicted that the Chinese market should increase 7 percent to 10 percent a year.
The luxury-car market is expanding and BMW is entering it as well.
It is likely that these jobs won't be coming back to the United States. The cars are being built in China and sold to Chinese customers.
Not only is Obama not helping the U.S. manufacturing sector, he is spending taxpayer money to subsidize car production in China.
This is just another example of government money going to waste to make union workers at GM happy. Of course, if this trend continues too long, the union workers will lose their jobs and they won't be smiling any longer.
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