GM Needs Flexibility on Number of Imported Cars

As General Motors and the United Auto Workers union negotiate the company's restructuring, there's a third party at the table that should be remembered — the taxpayers. That means efforts to cut costs should take priority over other interests — and the taxpayers' representative, the government, should help make that clear.

The UAW has already made painful concessions and is discussing more.

It is now in a public dispute about GM's plans to import some cars from lower-wage countries. President Barack Obama's administration has been clear that it wants the company to change the mix of vehicles, with more small cars that get higher gasoline mileage, available to buyers.

One way for GM to reduce its costs is to import cars from other countries. Documents it has submitted to Congress indicate that it plans to increase its imports from 832,000 in 2009 to not quite 1.2 million in 2012 and then the number will fall to a bit more than 1 million through 2014.

These plans have drawn strong objections from the UAW, which contends increased imports will result in a greater loss of jobs for UAW members. The UAW's political backers, including U.S. Rep. Gary Peters, D-Mich., also have raised objections.

GM points out that the total share of its planned vehicle production in the United States in 2014 will fall by less than 1 full percentage point from what it was last year, to 65.5 percent from 66.3 percent. Its vehicle imports from Mexico, China, South Korea and Japan would increase, but imports from Canada and Europe would decrease or be eliminated. Its net imports would rise 28 percent.

Still, it would have 31 wholly owned plants in the United States, compared with 21 for Ford and 18 for Toyota. (This projection does not include joint-venture plants.)

GM Chairman Fritz Henderson said the company might relent on some of its import plans. But it is in the best interest of the taxpayers that GM remains viable and becomes self-supporting.

If that means it has to increase the number of vehicles it imports, so be it. Obama was right when he stated that it is essential that the United States retains a domestic auto industry. That especially includes GM. But GM will have to be cost-effective to compete.

That means it will need a labor contract — even if it enters bankruptcy proceedings — that matches its foreign-owned rivals in allowing it the flexibility to seek productivity gains and hold down costs.

GM needs flexibility on number of imported cars

General Motors must be able to decide how many vehicles it will import to help control costs

As General Motors and the United Auto Workers union negotiate the company's restructuring, there's a third party at the table that should be remembered — the taxpayers. That means efforts to cut costs should take priority over other interests — and the taxpayers' representative, the government, should help make that clear.

The UAW has already made painful concessions and is discussing more.

It is now in a public dispute about GM's plans to import some cars from lower-wage countries. President Barack Obama's administration has been clear that it wants the company to change the mix of vehicles, with more small cars that get higher gasoline mileage, available to buyers.

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One way for GM to reduce its costs is to import cars from other countries. Documents it has submitted to Congress indicate that it plans to increase its imports from 832,000 next year to not quite 1.2 million in 2012 and then the number will fall to a bit more than 1 million through 2014.

These plans have drawn strong objections from the UAW, which contends increased imports will result in a greater loss of jobs for UAW members. The UAW's political backers, including U.S. Rep. Gary Peters, D-Bloomfield Township, also have raised objections.

GM points out that the total share of its planned vehicle production in the United States in 2014 will fall by less than 1 full percentage point from what it was last year, to 65.5 percent from 66.3 percent. Its vehicle imports from Mexico, China, South Korea and Japan would increase, but imports from Canada and Europe would decrease or be eliminated. Its net imports would rise 28 percent.

Still, it would have 31 wholly owned plants in the United States, compared with 21 for Ford and 18 for Toyota. (This projection does not include joint-venture plants.)

GM Chairman Fritz Henderson said the company might relent on some of its import plans. But it is in the best interest of the taxpayers that GM remains viable and becomes self-supporting.

If that means it has to increase the number of vehicles it imports, so be it. Obama was right when he stated that it is essential that the United States retains a domestic auto industry. That especially includes GM. But GM will have to be cost-effective to compete.

That means it will need a labor contract — even if it enters bankruptcy proceedings — that matches its foreign-owned rivals in allowing it the flexibility to seek productivity gains and hold down costs.

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