From Janesville to Jilin

Government Motors opened plant in China four months after closing plant in Wisconsin

August 31, 2012

A bailed out General Motors expanded its small truck and SUV manufacturing in China soon after closing down similar facilities in Janesville, Wisconsin—the plant Barack Obama pledged to save and keep open for "another hundred years" in 2008.

GM has increased its manufacturing capacity in China by 55 percent since emerging from bankruptcy thanks to a $50 billion bailout from taxpayers. An important piece of that increased capacity has taken place in Changchun, Jilin Province in China.

On August 30, 2009, GM entered into a "50-50 joint venture" with China FAW Group Corp., one of China’s largest automakers. GM’s cash influx helped boost FAW’s efforts to expand its light duty commercial vehicles and SUV manufacturing. The partnership sold more than 88,000 vehicles in 2010.

The move came four months after GM shuttered its Janesville plant, which built SUVs like the Chevrolet Suburban. The closure has become a matter of controversy on the campaign trail after Janesville congressman and Republican vice presidential nominee Paul Ryan noted the Obama administration failed to save the plant despite promising to do so on the campaign trail.

Obama stopped by the Janesville plant in February 2008 while campaigning for president and pledged to save the jobs of more than 2,000 employees.

"If our government is there to support you, and give you the assistance you need to re-tool and make this transition…this plant will be here for another hundred years," he said.

In October 2008, Obama reiterated his claims that he would save the GM plant: "As president, I will lead an effort to retool plants like the GM facility in Janesville so we can build the fuel-efficient cars of tomorrow and create good-paying jobs in Wisconsin and all across America."

That turned out not to be the case. GM closed the plant in April 2009 despite Ryan’s efforts to preserve it.

The Obama campaign has made the GM and Chrysler bailouts a centerpiece of its campaign, as Obama and vice president Joe Biden have claimed that their actions "rescued" the American auto industry. Democrats also plan to use the personal tales of autoworkers at the DNC next week, according to Politico.

Obama, who has blasted Mitt Romney as an "outsourcer in chief," has made no mention of GM’s rapid expansion in China and its use of cheap labor: 70 percent of GM’s manufacturing is based overseas, while foreign purchases represent only 40 percent of sales.

Taxpayers have not fared as well as Chinese automakers. GM and its lending arm Ally Bank have yet to repay $42 billion of the $57 billion they received from American taxpayers. And GM’s struggling European operations have dragged its stock price down 40 percent since its record-setting IPO in November 2010.

The stock’s tumble is another blow to taxpayers, who still own more than 25 percent of the company’s shares. GM’s stock would need to triple in order to fully repay taxpayers.