General Motors plans to layoff 30,000 workers in North America. This represents almost a quarter of its unionized employees in North America. The drastic move raises many questions. Is GM any more of an American company than Toyota or Audi? Whatever happened to waiting until after the holidays to wield the ax? Does the same free market that allows for American prosperity also dictate that companies will move labor from America to where it is cheap? Have unions ever been weaker in the past hundred years? Is "Made in America" an anachronism? Would Charles Wilson still believe that what's good for General Motors is good for the country?

With the way corpoarations are farming our jobs out to the world, it won't be long before American consumers will no longer have the means to consume.

When a country ceases to be a producer, it's in serious economic trouble.

"I see now why they gave me ribbons of shame...I was thinking like an american.... It's true. Everybody here thinks they are special. Nobody works for the team. They're too busy getting personalised licence plates. You wouldn't last two days in management training programme... Because you are selfish, it's what makes you weak." -- Sage words from Gedde Watanabe, AKA Long Duc Dong, from the movie Gung Ho.

I was thinking of this movie when I read this post, for obvious reasons as it's about an auto plant taken over by the Japanese during the 80's. When the new owners come in the Auto Union gives them trouble until the Japs finally threaten to leave. Sure, there is a "feel-good" ending, but the fact is that through the entire movie, the union give the Japanese every reason to leave, and in real life they would have. The town the movie is set in was dead before the Japanese came in, and re-opening the plant gave them hope again. But it wasn't good enough for the union.

One has to ask, with so many in "flyover country" losing their jobs due to manufacturing offshoring, wouldn't you think those areas are (ironically) ripe to become the new cheap-labor zones? Why hasn't this happened? The cost of living is too high, sure. But what does it cost to set up shop in America? The answer is way too much. Too much legal burden, too many regulations to comply with, wages are too high, unions too difficult to deal with, health care is too expensive, insurance, etc., etc.,.

We've all seen that, when we ask the Military to become school builders and crossing guards, it ends in a miserable failure. They purpose of a military is to blow stuff up and kill people. You can't ask a turtle to fly like a bird. It's the same with business. Businesses make money, and that's what they do best. You can't ask them to become something they're not. It's Government's job to make doing business in the US, as opposed to China, Romania, etc., more attractive. It's not reasonable to expect US companies to not seek the most efficent, cost effective means of doing business.

If we don't lower the levels of bureaucratic BS that a new business has to contend with, we are going to continue to watch these once-great companies fall.

Good answer to question number 3, Fong. Cheapness in labor doesn't just mean hourly wage. Regulations and litigation, I'm sure, play a role in moving jobs from the U.S. to Asia and Latin America.

Homer, Wired just ran an article on how these areas are becoming cheap labor zones:
http://wired-vig.wired.com/news/business/0,1367,69585,00.html?tw=rss.TOP

They are keeping the plant in Janesville open, even though it is the oldest plant still in operation, having been built in 1919. Possible reasons include the recent re-tooling and one other. The union employee's recently voted to take a cut in paid med benefits among other concessions. Unions can be a force for good. Unfortunately, many are corrupt and wasteful. I've delivered to too many union docks and have developed a serious dislike for the lot. At some point, one has to ask, how much is enough?

Obi Juan, this is basically a reprint/repackage of an article that ran, in the WSJ I believe, a few months ago. I have been watching this development with great interest, and I hope I'll be made to eat my words. Sadly, the instances of this happening are few and far between, and unless the regulatory environment changes in the US, I fear the pace of offshoring will continue.

Also, this article is more concerned with IT sourcing, rather than manufacturing. Services businesses carry much less baggage than a manufacturing operatin.

True. And IT also isn't unionized.

It's not just wages, litigation and regulations - don't forget conditions and health care! Maybe GM will outsource more to Australia; with new legislation coming in down here, it will be illegal for an individual or union just to ASK an employer for certain conditions (e.g. unfair dismissal clause) in an individual or colletive contract (attracting a $33,000 fine just for asking - so much for freedom of speech and freedom of choice.)

The real reason GM didn't close the Janesville plant is due to the reason its the only plant they actually own. Such as the property it sits on and all the buildings. All the other plants are leased making it easy to get out. It GM's only and true asset.