2010: The year Washington became business friendly
America has made the climate as comfortable as possible for CEOs, who have repaid the favor by creating more and more jobs – in other countries.
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That doesn’t mean GM will be creating lots more blue-collar jobs in America, though. 2010 was a banner year for GM’s foreign sales — already two-thirds of its total sales, and rising. In October, GM became first automaker to sell more than 2 million cars a year in China. The company is now making more cars in China than in the United States.And GM has just signed a deal with its Chinese partner to try to crack India’s potentially huge auto market.Skip to next paragraph
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Meanwhile, back home in the U.S., GM has slashed its labor costs. New hires are brought in at roughly half the wages and benefits of former GM employees, under a two-tier wage structure accepted by the United Auto Workers. Almost all GM’s U.S. suppliers have also cut their payrolls.
It’s much the same even for America’s biggest retailers. 2010 wasn’t an especially good year for Wal-Mart in the United States. Its third-quarter sales fell, as U.S. shoppers continued to hold back.
But Wal-Mart International is contributing mightily to its bottom line. Its UK business, Asda, will be adding 7,500 new jobs next year. Wal-Mart is also doing well in Japan and Brazil, and hiring like mad in both countries.
So when President Obama tells American CEOs our biggest challenge comes from abroad, you’ve got to wonder. The leaders of American business are already abroad, and doing quite nicely.
Just after the midterm elections, the President’s chief economic advisor, Larry Summers, told a group of top U.S. CEOs that the election was partly a “rejection of elites…that were seen as more citizens of Davos than of their countries.” American CEOs, Summers warned, should “think very hard about their obligations as citizens of this country.”
Yes, they’re citizens. But first and foremost they’re CEOs. And CEOs have to show profits – wherever those profits come from. Under American-style capitalism, profits matter. Jobs don’t.
2010 was the year Washington became even more “business friendly.” The result has been more and better jobs – but not in America.
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