Business, Finance & Economics

U.S. carmakers get federal help

If you're angry about the economy, in Michigan they might say welcome to the club. The CEO of a massive multinational based in Michigan recently spoke about how economies like China and Russia understand how good businesses benefit everyone and they're beating Americans at their own game and on their own land. In Asia, Europe, and Latin America, some U.S. corporations are doing rather well. Take General Motors for example. So the CEO of GM asks why then a company like his faces great difficulties in the U.S.? You might think it's because it's cheaper to build cars overseas, but those companies are also building cars overseas and still expanding production in the U.S. this professor says part of the reason American companies are moving facilities to Mexico because they can escape the unions there. Last year, the car unions and car makers sat down and agreed to a new two-tier system where old workers earn more and new workers earn less and get fewer benefits. Economists argue this will help bring companies back to places like Detroit, but that's not true according to this laborer. He and others sit in the union halls in Michigan. They're paid but they're not working because they say the car companies are waiting them out so they can hire newer, cheaper labor. This union worker says the union was forced to renegotiate because the companies would go bankrupt otherwise. Some economists say this is the reality of globalization. Whatever the cause, in Michigan they're not just giving into the new world order and everyone says the politicians in Washington need to protect American manufacturing.

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