Friday, June 12, 2009

Questions about the Bailouts of General Motors (GM)

Billions of taxpayers’ dollars have been handed over to GM by the Canadian and United States governments. Some reports have the figures totaling as high as $60.4 billion (see information below). This is a colossal amount of money being handed over to a multi- national corporation that had subsidiaries in offshore tax havens. The Huffington Post of January 16, 2009 stated this:

“General Motors Corp., which received $13.4 billion from the [U.S.] federal rescue package, had 11 offshore subsidiaries…” [1]

Meanwhile, here in Canada the Canadian government has also participated in this billion dollar bailout bonanza for a “free enterprise” multi-national corporation that had subsidiaries in offshore tax havens. In fact, the Canadian Government is on record as saying this about the handover of taxpayers dollars:

“Ottawa doesn't expect to get back the billions in taxpayers' dollars it's investing in General Motors… It's regrettable that public money is funding the $10.5-billion bailout of GM but the move is a necessary one amid a global recession, said [PM] Harper.”
(Source: Keith Leslie, THE CANADIAN PRESS, published 01 06 2009) [2]

One wonders if PM Harper’s government checked out how much money GM had in its “11 offshore subsidiaries” before it started doling out Canadian Taxpayers dollars? Surely, the taxpayers of Canada should be privy to how much money is in these “11 offshore subsidiaries” of GM. After all, he who pays the piper calls the tune, or so the saying goes. Or are the taxpayers of Canada not allowed this information from their own government?

The United States government’s taxpayers are also participants in this billion dollar delivery to a multi-national corporation of a tsunami of money. The Financial Post of June 1, 2009 stated:

“The U.S. government has already provided $19.8 billion U.S. to GM and will inject another $30.1 billion U.S. as the 100-year-old automaker works through its restructuring.” [3]

Meanwhile GM appears to be prospering in Communist China. An article in China Daily of June 2, 2009, stated this: “General Motors Corp.'s fast-growing China operation will be unaffected by the parent company's bankruptcy and plans to open a new factory within five years will not change even as the automaker closes US facilities, the unit's president said Tuesday.” [4]

GM has closed facilities in Canada and the United States, yet it plans to export cars from China and “import them into the United States” according to the Telegraph, U.K. Newspaper of May 14, 2009. In the same article a union lobbyist had this to say: “‘GM should not be taking taxpayer's money simply to finance the outsourcing of jobs to other countries,’ said Alan Reuther, a lobbyist for the United Auto Workers union.” [5]

There are, I believe, many unanswered questions regarding the billions of taxpayers’ monies handed over to GM. For instance, how much money did GM have in its “11 offshore subsidiaries”? Do we know for sure that the bailout billions of taxpayers’ dollars will stay in Canada and the United States? Are there any safeguards in place to make sure that none of this money goes offshore? Could any of this bailout money go to GM’s China operation? If GM in communist China is going to import their China made cars to the United States, how will this affect GM’s operations in North America that has been bailed out by taxpayers dollars? And finally is it in the public interest of taxpayers everywhere that offshore tax havens are used as places to conceal money? I believe answers are needed to these questions.

Stephen J. Gray
June 12, 2009.






Other info at:
U.S. Subsidiaries in Offshore Tax Havens
By LYNNLEY BROWNING Published: January 16, 2009