Stimulus Projects quickly being brought to a halt over 'US Content' requirements
It seems that the federal gov't has finally figured out that buying a product from an 'American' company does not mean that the components are American or that the assembly was done in America. As such, stimulus project contractors are seeing all sorts of projects come to a grinding halt because nobody makes a truly American component anymore, and a specific gov't stimulus project waiver is required to use non-American components.
Re: Stimulus Projects quickly being brought to a halt over 'US Content' requirements
Quote:
Originally Posted by
Melonie
http://www.bloomberg.com/apps/news?p...d=a3BnSk0B8ZmQ
It seems that the federal gov't has finally figured out that buying a product from an 'American' company does not mean that the components are American or that the assembly was done in America. As such, stimulus project contractors are seeing all sorts of projects come to a grinding halt because nobody makes a truly American component anymore, and a specific gov't stimulus project waiver is required to use non-American components.
But this does NOT apply to the Cash for Clunkers program. There is no requirement to buy an American made car.
Re: Stimulus Projects quickly being brought to a halt over 'US Content' requirements
Quote:
Originally Posted by
Eric Stoner
But this does NOT apply to the Cash for Clunkers program. There is no requirement to buy an American made car.
The cash for clunker program is this:
- A means to introduce more debt onto american's backs by asking them to eliminate already paid for automobiles for unpaid for ones.
- A means to enhance demand among the poor for mass transit when they find all the used cars have been shipped to China.
- A program for China to obtain raw materials (steel) as input to it's economic system to aid with all those dollars they are buying.
- A program to stimulate car and sales taxes for local governments.
- Additional government aid to car companies, though these are less specific than the GM and Chrysler bailouts.
There are a few more but they are just to damn depressing. :'(
Re: Stimulus Projects quickly being brought to a halt over 'US Content' requirements
^^^ now add to that list a future 'subprime' car loan situation ... where low income people of questionable creditwortiness were able to obtain new car loans thanks to the 'cash for clunkers' cash being applied to the down payment requirement. In a year, a good percentage of the new 'cash for clunkers' based new car owners will be delinquent on these loans. What happens then ? A. the cars are repoed, and the 'poor' car owners are worse off than before, or B. yet another gov't 'bailout' program will be instituted to bar lenders from repo'ing cars bought under the 'cash for clunkers' program ( analogous to 'subprime' home owners ), with associated losses for the lenders as well as US taxpayers (especially if the loans were made by GMAC using taxpayer TARP money).
Circling back on topic, we're back to the point about the vast majority of US corporations making use of imported components and often non-American assembly labor (i.e. Dodge trucks assembled in Mexico). If America ever attempted to set tariffs at the border to protect US jobs / compensate for carbon footprint / whatever, there simply isn't enough left of America's industrial base to fill the void, at any price !
Re: Stimulus Projects quickly being brought to a halt over 'US Content' requirements
Many decades ago US car makers had assembly (and maybe even component) plants in Canada. They even produced vehicles in foreign countries, made for those countries,among them are Australia and Europe. Now they are partners with overseas companies, Europe, Asia, South America. Further, materials and parts of components from their suppliers are now also made abroad.
It's hard to believe that the government didn't already know that. It's just more internationalization, and apparently to be expected from here on out.
Re: Stimulus Projects quickly being brought to a halt over 'US Content' requirements
^^^ yup, and consider the following. GM used part of their US gov't loan money to fund the construction / expansion of component plants in foreign contries such as Brasil and China !
(snip)"General Motors says it is to invest more than $1 billion to develop two new car models in Brazil despite woes at the company’s US headquarters. GM says the planned investment should create about 1,000 jobs. A government tax break which cut the cost of new vehicles in Brazil, led to GM seeing record sales in the country.
The expansion comes as GM emerges from bankruptcy proceedings as a private company which is majority owned by the US government. However, GM in Brazil is financially independent of the US company – and it has been keen to stress that there will be no dependence on products from the United States.
Half of the investment will come from the company itself and the rest from loans from state-run banks, says the BBC’s Gary Duffy in Sao Paulo…
The US government has a 60.8% stake in the new U.S. company, while Canada and a United Auto Workers union retiree healthcare trust fund also have a stake."(snip)
from
(snip)"General Motors (GM) is planning to build cars in China and import them into the United States, a strategy that could trigger further job losses and union anger in the US. This plan to shift a greater proportion of the struggling car maker's production overseas is still being negotiated with US politicians, who have already lent GM $15.4 billion in order to keep it afloat and safeguard its 90,000 US workers.
However, a spokesman for GM in Shanghai said it was "only a matter of time" before vehicles made in China are imported into the company's home market, in another blow to the US car industry."(snip)
from
... but by some 'strange coincidence' none of these developments ever seem to be reported in US mainstream financial media !
Re: Stimulus Projects quickly being brought to a halt over 'US Content' requirements
Ford Motor Co was making money on European Fords when they were losing on domestic Fords.
Do you want them to become profitable again, so they can pay back their loans and the government can get out of their business?
That's the real question in these times.
Likely you'd find those articles in Motor Trend, Automotive News, etc. Or blogs among those who have some sort of ulterior motive.