Friday, August 10, 2012

The Inconvenience of Truth


Pueblo, Colorado, August 9, 2012:  “I said, I believe in American workers, I believe in this American industry, and now the American auto industry has come roaring back,” he said. “Now I want to do the same thing with manufacturing jobs, not just in the auto industry, but in every industry.
 

“I don’t want those jobs taking root in places like China, I want those jobs taking root in places like Pueblo,” Obama told a crowd gathered for a campaign rally at the Palace of Agriculture at the Colorado State Fairgrounds here.

...

“Gov. Romney brags about his private sector experience, but it was mostly invested in companies, some of which were called 'pioneers of outsourcing,'” Obama said. “I don’t want to be a pioneer of outsourcing. I want to insource.”


Defining Moments: 

"insourcing"

Delegating a job to someone within a company, as opposed to someone outside of the company (outsourcing).


One reason for insourcing to occur is if a company had previously outsourced a certain task, but was no longer satisfied with the work being done on that task, so the company could therefore insource the task and assign it to someone within the company who they believe will do a better job.

and,

Insourcing is when a company ceases to contract a business function and begins to perform it internally. Insourcing is the opposite of outsourcing. Insourcing is a business decision that is often made to maintain control of critical production or competencies. Insourcing is widely used in production to reduce costs of taxes, labor and transportation.

Insourcing is also sometimes defined as bringing a third party outsourcer to work inside a company's facility. An IT outsourcing provider, for example, will be hired to service a company's IT department while working inside the company's facilities.[1] In addition to contracting an entire team of workers from an outsourcing provider, outside experts are sometimes hired as consultants (to improve certain processes etc.) and the internal staff thereafter implements their recommendations.[2]

Insourcing is often confused with onshoring which is a company's decision to bring jobs back from overseas.

Sounds to me as if President Obama is incorrect when he uses the word, 'Insourcing'.  But, then again, he's President.  He can make up stuff as he goes...  As for me, I'm a purist.  I believe that words mean things. 

You know, like all those words in The Constitution which mean nothing to the President either... 


Inconvenient Truth #1:

National Review Online, May 2012:  Would you hire President Obama as your financial adviser?

Three years ago his administration invested more than $100 billion in taxpayer money to bail out General Motors. On Tuesday, the entire company, not just what the government owns, was worth less than $34 billion. By anyone’s definition, that investment is a glaring failure. Yet over the last few days the Obama campaign, in a $25 million marketing blitz, has flooded the airwaves with ads in battleground states, claiming the bailout should be counted a rousing success.
 

Unfortunately, assertions that “all loans have been repaid to the federal government,” that the bailout “saved more than one million American jobs,” that “U.S. automakers are hiring hundreds of thousands of new workers,” that GM is again the “number-one automaker” — all are based on creative accounting.
 

The money the government spent adds up quickly: $50 billion in TARP bailout funds, a special exemption waiving payment of $45.4 billion in taxes on future profits, an exemption for all product liability on cars sold before the bailout, $360 million in stimulus funds, and the $7,500 tax credit for those who buy the Chevy Volt. GM’s share of other programs is harder to quantify but includes, for example, some of the $15.2 billion that went to Cash for Clunkers. Those costs are in addition to the billions taken from GM’s bondholders by the Obama administration.
...

A look at the accounting shows the trouble with contentions that much of the TARP money is getting paid back. The Obama administration compares the $50 billion in direct bailout funds with the price it will eventually be able to get for selling the GM stock it owns. But that assumes that the stock price won’t reflect government subsidies, including GM’s exemption from paying $45 billion in taxes. By the Obama administration’s logic, if the stimulus grants to TARP recipients were simply large enough, all the TARP money could be paid.
 

Claims that GM paid back its TARP loan are true but misleading. President Obama clearly wants to create the impression that all the money given to the auto companies has been paid back. But the $6.7 billion loan to GM was just a tiny fraction of the money given to it. As TARP special inspector general Neil Barofsky explained, GM used “other TARP money” to pay off the loan.

Obama’s economic advisers told him during an April 2009 meeting that job losses in the auto industry would be only a fraction — 10 to 20 percent — of these claimed numbers, even for the much weaker Chrysler. The advisers reported the obvious: Bankruptcy would not kill all jobs at GM and, even with cutbacks, suppliers would pick up other work. But Obama keeps using numbers that his own advisers told him were wrong.
 

Even saving 20 percent of 400,000 comes at quite a cost — at least $780,000 per job. How many workers would have been willing to quit working for GM for a $400,000 severance payment?
 

The “number-one automaker” assertion is no more accurate. Obama’s sales totals include 1.2 million mostly cheap commercial vehicles built by China’s Wuling, a company in which GM owns a small stake, and it excludes sales by vehicle makers in which Volkswagen owns a majority share. Fortune magazine lists GM’s revenue as smaller than Toyota’s and Volkswagen’s.
 

The only real winners from the GM bailout were unions, which were protected from pay cuts, from losing their right to overtime pay after less than 40 hours a week, and from cuts to their extremely generous benefits. They faced only minor tweaks in their inefficient union work rules.

Having just $34 billion to show after a $100 billion-plus investment would get a chief executive of any private company fired. Unfortunately, Obama does not seem to understand how this money has been wasted.


Inconvenient Truth #2:


General Electric's health-care unit is moving the headquarters of its x-ray business from Waukesha, Wisconsin to Beijing to gain from Chinese growth, according to Bloomberg.
 

The company said only a few of its top managers would move to China, and that it expects no job losses at its Wisconsin office, that has 120 employees. GE Healthcare will however hire 65 new engineers and other staff at the new Chengdu facility.
 

This is part of the parent-company's broader plan to invest $2 billion in China. General Electric expects its health-care revenue in China to rise 20% annually through 2015.
 

Earlier this year GE Healthcare launched a three-year "Spring Wind" initiative that aims to helps the Chinese government by developing affordable healthcare products, boost medical distribution network across China and offer training for Chinese healthcare professionals. In 2010, GE Healthcare also committed to sending 500 members into rural China to help grassroot medical institutions.

While the company reported no job losses in the U.S. stemming from the move, President Obama and Jeffrey Immelt are likely to face flak, since Obama appointed Immelt the top outside economic adviser and charged him with running a jobs-focused panel to help bring the U.S. economy back on track.
 

GE came under scrutiny earlier this year after The New York Times reported the company did not pay any taxes in 2010. It has since been reported that GE had not finished its tax filing, and that the company expected to pay taxes.
 

Immelt (the Obama Administration's 'Job Czar') has also been criticized for employing 36,000 more people abroad, than in the U.S. and cutting 34,000 American jobs after becoming CEO, according to The Huffington Post.


Looking forward to reading about today's 'Made-Up-Facts-Du-Jour' from the campaign trail...

I wonder if Mitt Romney killed anyone else today?

I wonder if Allen West, R, FL, has pummelled any women lately?

Oh, it appears that he has...


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