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Company is hiring hundreds of American workers, building new facilities, and trying to improve efficiency

When you think General Motors Comp. (GM) you probably think of Detroit, Mich.  But the domestic automaker is also heavily invested in Texas, where it employes 4,500 people.  A two-shift plant in Arlington has 2,500 employees focused on building Chevrolet, GMC and Cadillac SUVs.  GM Financial employs 1,800 at various locations across the state.  And there's two call centers with a couple hundred employees, as well.

I. GM Expands Texas Hiring

And GM isn't backing down from its friendship with the Lone Star State, whose former governor George W. Bush was the original architect, and to this day ardent defender of the bailout and structured bankruptcy that arguably saved the company from liquidation.

The company today announced plans to build a new IT center in Austin, Texas which will hire 500 professionals.  Among the positions GM is looking to fill are software developers, project managers, database experts, and business analysts.

The center will be located just miles from other industry giants, such as Apple, Inc.'s (AAPL) largest U.S. call center and Samsung Electronics Comp., Ltd.'s (KSC:005930) massive chip fab.

Arlington Plant
Among other locations, the new Austin data center will help serve GM's large
Arlington, Texas SUV plant. [Image Source: GM]

The IT center is part of GM's bid to centralize its formerly scattered IT efforts, which often operated pseudo-automously on a site-per-site basis pre-bankruptcy.  The IT consolidation should both drive cost savings, and -- according to GM -- "drive breakthrough ideas".  GM says the Austin center is the "first of several new IT Innovation Centers".

 GM Chief Information Officer Randy Mott cheered the move in a press release, remarking:

We want IT to keep up with the imagination of our GM business partners, and to do that, we plan to rebalance the employment model over the next three years so that the majority of our IT work is done by GM employees focused on extending new capabilities that further enable our business.

We anticipate hiring as many as 500 new GM employees in Austin.  We look to the Innovation Centers to design and deliver IT that drives down the cost of ongoing operations while continuously increasing the level and speed at which innovative products and services are available to GM customers.

The next generation of IT workers, the talented visionaries we want contributing at the Innovation Center, are being trained at top computer science schools in Texas and surrounding states.  The IT Innovation Centers are critical to our overall IT business strategy and transformation.

II. Bailout Benefits Finally Being Realized?

GM is also adding a third shift to its Arlington plant, which could raise wages for some and add at least a few hundred more well-paying skilled labor jobs, which come with health care benefits and a pension.  GM is also opening a $200M USD part stamping plant which will "create or retain approximately 180 jobs".

GM data center workers
GM IT workers (L-R) Dan Krzywosinski, Neal Bond and Michelle Lauka try to resolve a client issue at a data center in Warren, MI.  The workers will soon be getting new colleagues in Texas, courtesy of a GM IT hiring/improvement effort. [Image Source: GM]

The company has drawn a lot of fire over the last couple years over accepting government money and opting for structured bankruptcy/government takeover instead of a liquidation.  However, the hiring spree is a welcome trend amidst mass layoffs from the likes of Research in Motion, Ltd. (TSE:RIM), Dell, Inc. (DELL), and Hewlett-Packard Comp. (HPQ) in the tech industry.

Of course, Ford Motor Comp. (F) is also in the relatively small minority of companies looking to expand its domestic manufacturing and professional workforce in the U.S., and it received a more limited amount of bailout funds (in the form of certain Recovery Act grants for advanced vehicle development).

Ultimately the U.S. government estimates its losses on the bailout of GM, Chrylser, Ford, and industry parts suppliers to be around $25.1B USD.  However, that figure does not account for preserved spending power and taxable GDP -- which will likely return billions to the government.  In the end it's clear that something was lost, but something was gained as well in the auto bailout.

Source: GM

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Too early to know...
By topkill on 9/7/2012 7:52:00 PM , Rating: 2
"Ultimately the U.S. government estimates its losses on the bailout of GM, Chrylser, Ford, and industry parts suppliers to be around $25.1B USD."

I'm sorry, but it is too early to tell if taxpayers will lose anything on this whole thing or not. How much gets paid back, when, what they sale any portion the gov't now owns for, etc. will determine whether or not we actually "lose" money on this.

It also ignores potential tax revenue from preserved jobs and an industry which may have totally gone away and the potential effect on the economy.

When people make claims like this, they are not intelligent enough to even understand the question....or else they have an agenda.

The VALID question is whether or not the industry would have recovered and been healthier in the long run with a more traditional bailout. Where they could have had a free hand to totally throw out Unions and change wage scales, etc. But the correlated question then would be whether or not the industry would have survived for US automakers if they DID go down this path.

Presidents Bush and Obama didn't want to test the theory to see if they survived. I think they were right on this one.

RE: Too early to know...
By topkill on 9/7/2012 7:53:36 PM , Rating: 2
"a more traditional bailout."

Sorry, I meant "a more traditional bankruptcy"

RE: Too early to know...
By inperfectdarkness on 9/8/2012 2:39:37 AM , Rating: 5
Those who claim the bailouts were a success typically only view the continued existence of GM as proof positive that it worked. That's like saying welfare works because you collect it.

The reality is, automobiles are a market whose demand is very stable. Eliminating one of the top manufacturers of automobiles would create a large vacuum within the industry--one which would quickly rushed to be filled by other existing competitors. The net result would be increased automotive production by Toyota, Nissan, Honda, BMW, VW, Audi, Hyundai and others. As we have already seen within the past 10+ years, these large foreign firms have found it more beneficial to create plants here in the US, rather than seeking to place them in China or Mexico.

So what would have happened without bailouts? UAW would have died completely. GM would have been broken into smaller pieces and sold to creditors who would have in turn sold those pieces to other existing auto firms. 90% of the existing workforce "endangered" by this bankruptcy would find employment under new management in a different company--doing virtually the same type of work.

The US has decided to elect leaders who have collectively decreed that it is better to allow their government to be insolvent--rather than mis-managed corporations. The problem is, corporations can effectively wipe out their debt by declaring bankruptcy and closing their doors. Governments can't do that.

There is no difference between bailing out a corporation due to financial insolvency--and bailing out an individual because they chose to spend above their means.

RE: Too early to know...
By Mathos on 9/8/12, Rating: 0
RE: Too early to know...
By tng on 9/8/2012 10:14:21 AM , Rating: 1
I always love the KILL THE UAW People...
I don't think that is what people wanted. It became obvious that the UAW had way to much say in how the company was being ran and had basically turned GM into a welfare state for it's members.

A bankruptcy would have allowed GM management to bring the company back to an acceptable stance with the UAW.

If GM disappeared completely, that would have left millions of vehicles out there that would need service and parts. I, for one, have no doubt that this would have spawned the opportunity for thousands of small businesses to fill the gap much more efficiently and would have arguably been better for the economy as well.

RE: Too early to know...
By TSS on 9/8/2012 5:26:41 PM , Rating: 2
Explain to me how a union is going to protect you from you employer when the union is the employer?

UAW does not equal Unions. Kill the UAW, not unions.

RE: Too early to know...
By Ringold on 9/9/2012 4:10:22 AM , Rating: 4
I'm not sure why everyone always assumes a GM bankruptcy would've meant destruction of GM as an entity with a stop on production, leading to dismemberment.

Airlines go through this all the time. They usually keep flying with zero disruption to service or clients, keep buying the goods and services that go in to its operation, even keep the ball rolling on future acquisition plans in terms of aircraft.

GM may well have gone in to bankruptcy protection and kept building, selling and servicing cars while its lawyers worked quickly in court to throw out specific contracts (like with the UAW and dealerships) that held it up, might've pre-negotiated the outlines of agreements with lenders, and emerged just like airlines do; leaner, meaner, and ready to continue the battle.

Only difference is the UAW would've lost out. Those that can't make the connection between a Democrat President and a "bail out" that eradicates secured bond-holders, shafts the companies suppliers workers, does as little as possible to help the company itself but gives a golden parachute and huge ownership stake to UAW is absolutely blind. It was a huge thank-you note from Obama to the UAW for decades of support for his party.

RE: Too early to know...
By topkill on 9/8/2012 2:07:38 PM , Rating: 2

"Those who claim the bailouts were a success typically only view the continued existence of GM as proof positive that it worked."

No, I clearly said that it could have gone either way and the outcome of the path they chose is still in doubt as would be the other path had they chosen it.

Whether Toyota, Honda, Hyundai, et al would have chosen to come into the same plants or let them lie fallow and move on to other ground in Tn, Ga, etc for cheaper non-union wages is a huge, open question. And we'll never know the answer other than the FACTS that we've seen both with more foreign mfr's choosing to open new plants rather than take on old, outdated equipment/sites. Would the net to the US have been the same? Maybe.

People who claim to know the outcome with certainty are the ones who are showing their ignorance. There are a few billion variables involved, but if you think you know exactly what would have happened, then you keep living in your fairy tale world but at least be smart enough to know you spout opinions rather than facts.

At least I was smart enough to offer an OPINION and admit it was just that.

RE: Too early to know...
By Ringold on 9/9/2012 4:01:42 AM , Rating: 3
Something you're not considering is the future, as well. The bailout, as previous bailouts in the industry did (remember, this isn't the first time), didn't do a great deal to change GM's existing contracts or costs. Not nearly as much as full bankruptcy protection would've, where GM could've likely continued business as usual while bankruptcy courts allowed them to tear up old contracts.

Another problem is it's almost inaccurate to say it was a GM bailout. GM's previous owners were essentially annihilated. The old GM ceased to exist. It's new owners are, for now, essentially the Treasury and the UAW. Ask bondholders or former shareholders if they feel like they got a "bailout" or if they got a 12-gauge slug to the backs of their skulls.

But back to where I was initially going.. With those old plants and old workers making largely the same old inflated wages, there's no need to look at "billions of variables" for long-run analysis. As long as the UAW has its legal privileges (in the form of infinite White House support), huge ownership stake and inflated wages, GM will not be competitive in the long run versus its peers, either domestic firms that went through bankruptcy or foreign ones that never let themselves be invaded by the union scourge to begin with. And what does all economists agree happens in the long run to uncompetitive firms? They die. Unless... they get government support, again.

So is a bailout that simply leaves in place conditions likely to require another bailout in the future really a success? Only in the most short-term of analysis, where you can get away with waving your hand and trying to suggest its too complicated to know.

Look to France as an example of how this sort of industrial policy leads to failure. They try as hard as they can to create laws to force employers to keep jobs there, they occasionally throw money at manufacturers, they let unions kidnap corporate executives, they acquire ownership stakes in companies. And yet, Frances manufacturers, generally speaking, still shed jobs, still go bankrupt, still bleed billions of euros, and still try as best they can to move jobs elsewhere. It's a losing game.

Better here than in China
By Beenthere on 9/7/2012 8:00:35 PM , Rating: 2
It's nice to see GM create soem U.S. jobs for a change after eliminating tens of thousand and spending like a drunk in China while cutting it's U.S. workforce.

RE: Better here than in China
By wordsworm on 9/7/2012 9:39:47 PM , Rating: 2
Are you referring to the government or the general population, or both?

I remember that before FreeTrade with the US, folks at the grocery store made about $15-17/h. Now, they make less, but back then you could buy a house for 1/6 of what it costs now. Free trade was the worst thing the Conservative government ever did to Canada.

RE: Better here than in China
By Beenthere on 9/7/2012 10:33:47 PM , Rating: 2
It's good to see U.S. jobs being created. It's bad to see GM sucking up to the Chinese government so that they can sell cars in China. It's bad to see GM relocating it's R&D and other jobs out of the U.S. and to China.

A seach will show you what GM has been quietly (in the U.S. press) doing while GM brags about their actions in China.

RE: Better here than in China
By mugiebahar on 9/8/2012 9:14:41 PM , Rating: 2
while your right from w perspective , its a little more difficult then that. Free trade is not what people say it is, in that being a great thing but there was no choice. The world changed in the late 70's early 80's on the other side of the world. Cheap labor came in and communism was falling. Free trade allowed company's to access capitol that wasn't available before and compete in other markets as well (there is he'll of a lot more but that's diverging more) also interest rates were 20% and more in the early 80's. You couldn't buy a house for 400,000 with 20% and pay for it. The key to cheaper houses is higher interest rates (but you must factor in inflation as well) but doing that kills the automotive industries as you can't sell cars with high %interest. That's why you drove cars longer and 1 per house not 1 per person. Keeping us out of the world markets would have left us 15 years behind and exponentially more as time goes on. Young people would have left to go abroad and there goes the economy because old people don't spend like young materialistic people. So while yeah the rich get richer the poor would have become worse. Only because the whole world went that way. Its not necessarily right morally encouraging materialism but young people are what they see on tv. That's why we had no choice.

RE: Better here than in China
By Ringold on 9/9/2012 10:20:21 PM , Rating: 2
$15 to $17/hr for light, brain-dead menial labor is insane. For the zero skills and experience it requires, the US federal minimum wage is just about right, perhaps a dollar higher. Aldi's pay starts at $10.

And those wages don't fall out of the sky. You pay for it in your bill. If you feel they should be making more, nothing stopping you from tipping them a couple bucks every time you're at check-out. Put up or shut up, comrade.

Further, free trade has squat to do with what people at a grocery store make. Think about it. It's impossible. That labor is local and, until robots are cheaper and more effective, impossible to replace with workers elsewhere. People in Jackson, Mississippi can not bag you groceries in Canada, and thus can not compete with a bid down those wages. Economists would call it a non-tradeable good or service.

Exceptions: Free trade caused drastic, depression-level unemployment, pushing down the wages across the nation. That's not what anyone has ever claimed, though. Another exception: if millions of Americans cross the border to do low-wage work in Canada every day. Again, zero evidence of this.

Sorry to say, but if you don't know the reasons why free trade is a net positive, you don't understand the basics of economics. A great deal of even liberal economists like Paul Krugman are also free-trade advocates, it's only a minority on the left that's stuck in an uneducated 17th century view of the world and economics that still advocates otherwise, plus some 'green' types that would like to destroy global trade as a tool to weaken and isolate humanity more broadly.

By tecknurd on 9/9/2012 1:39:25 AM , Rating: 1
It will be nice for a "change" to spread the wealth to other states besides stupid Texas.

By Icebain on 9/9/2012 11:35:59 AM , Rating: 2
Well, if other states made better environments for business, I'm sure they would go there instead.

By tecknurd on 9/9/2012 7:39:47 PM , Rating: 2
That is a load of BS. My state has plenty of resources for GM to use. GM could put their facilities anywhere in my state because my state has space. Also there are two universities that have developed and constructed equipment that was used for Mars rovers and landers, so that is a common interest. They had the money to take a risk in another state besides stupid Texas, but they took the easy way.

By Ringold on 9/9/2012 10:24:46 PM , Rating: 3
What an idiot. Lots of space and a couple universities that got government money to build a government rover is your states case for business? And mars rovers are a common interest to GM? Can GM now export cars to Mars? I must've missed that press release.

Businesses exist to make money, not spread welfare around to governments that don't appreciate them and have an expectation of entitlement to their investment. So of course they took the "easy" way, why would you expect humans to behave any different than electrons or water that flow down the path of least resistance?

If you want to compete with Texas, grow up, be a man, and compete. Texas isn't "stupid," fool, Texas is employed.

Reminds me of a political cartoon...
By Hakuryu on 9/8/2012 1:29:11 AM , Rating: 1
An elephant saying 'are you better off then you were four years ago?'.

The autoworker next to the elephant says yes. The Monopoly character representing Wall Street says yes. The desicated body of Osama Bin Laden says no.

Personally I think anyone that bitches about the bailouts is a bitch and nothing more. A tool. A sellout. Deal with it rich guys and entitled pseudo-republicans.

RE: Reminds me of a political cartoon...
By tng on 9/8/2012 10:17:08 AM , Rating: 2

By mugiebahar on 9/8/2012 9:21:25 PM , Rating: 2
agree what?

good on you GM
By mugiebahar on 9/8/2012 8:42:47 PM , Rating: 2
I agree that the bailout was a much better choice. If the economy stalled even a little more the effect would be a hundred fold. Yeah I agree small companies would have popped up, but you can't open one over night, and the economy had/was/still on the edge. I look @ it like this (you can agree or not that's everyone's subjective opinion) yeah a car has air bags, re-enforced doors and crumple zones for safety. But why test the extreme limit of a safety net/system built in use the brakes and let the bumper do what it can. Even a smash on the brakes with a bumper tap on a car in front will jerk your head enough. And that's the safer "bet" (bet because as mentioned by others its the unknown and most likely devastating outcome that's not an option with people's lives are at stake) yeah the unions are a big suck ass, but what of wall(mother f#%@ers)street douche bags. I'd rather pay a guy who sweats from real work then a fat ass behind a desk calling shots with money that's not even his. The economy its always (look @ all history before you even question this) better to have a strong middle class then any wealthy. Trickle down doesn't work, as real example its like pouring water over a dried oasis sponge the top will soak it up with nothing for the bottom. But if its well watered with water in the middle then pour water on top then it has a "chance" to reach the bottom. So good on you GM

What a slant....
By GotThumbs on 9/10/2012 11:09:03 AM , Rating: 2
GM never would have fully closed if they had actually filed for "Resturcturing Bankruptcy" but then that's not the message this writer wants to send.

Anyway, my question to you is.....Since GM is centraliizing its EXISTING operations "We anticipate hiring as many as 500 new GM employees in Austin.", " to centralize its formerly scattered IT efforts", are these really NEW jobs or just centrally locating existing GM IT jobs...and those that choose not to move to Texas...loose their current job and THEN...and only then will GM be hiring new Texas employees?

Moving an employee's location...does not mean a new job has been created. Also if one employee is hired in Texas for one IT position eliminated in that really a new job? I say no.

These may be new GM jobs for some...but it simply replaces contract employees/companies SO it is a re-balance and not necessarily NEW jobs.

"rebalance the employment model over the next three years so that the majority of our IT work is done by GM employees"

When reading a "News" story.....
Always ask your self.....what and I NOT being told...and how can this be spun to communicate something positive from an actual negative.

Best Wishes for any programs in Texas.

Revisionist history?
By danjw1 on 9/8/12, Rating: -1
RE: Revisionist history?
By danjw1 on 9/8/2012 11:43:53 AM , Rating: 1
Oh, I forgot, Republicans aren't going to be dictated to by fact checkers. You guys just make up stuff as you go along.

RE: Revisionist history?
By Nfarce on 9/8/2012 2:37:56 PM , Rating: 2
What the hell are you talking about, mouth breather? Bush authorized providing $17.4 billion to GM and Chrysler, with an additional $4 billion available to GM in February 2009, after Obama took office. It was an open ended deal that allowed the wallet to remain open for the next administration to decide what to do. I guess you Obama Democrats don't really care about facts .

And this is irrespective of the fact that your hero Obama took a big massive dump on the GM investors and turned controllership over to his union goon buddies. Start reading outside of PMSNBC, the New York Slimes, and stop turn off Jon Stewart. You may just learn reality through those rose colored glasses you think through.

RE: Revisionist history?
By danjw1 on 9/8/2012 5:34:23 PM , Rating: 2
"In December of 2008, GM approached Congress and asked for a bridge loan to allow them to restructure. While the House passed legislation to accomplish this, it was not passed through the Senate. Days later, the Bush administration initiated a loan through the TARP program which would provide $14 Billion in loans and stock purchases to GM and follow many of the guidelines that were sought in that legislation. This included a restructure plan that would have to be approved by the Obama administration." Source:

Ok, I was mistaken. Bush's Administration gave them a bridge loan to give them enough time to get a reorganization plan together. This was done after the 2008 election. But that was just enough to allow them to continue to operate while getting a plan together.

RE: Revisionist history?
By Nfarce on 9/9/2012 12:47:46 AM , Rating: 2
Yeah I know you were mistaken. Thank you for manning up to admit it. Very few liberals like you do that.

RE: Revisionist history?
By Nfarce on 9/9/2012 12:56:58 AM , Rating: 2
And one other fact : when you hear Democrats gloat about GM paying back the bailout loan? They paid it back with TARP money, not paying off a Visa bill with a MasterCard. Epic FAIL .

RE: Revisionist history?
By KamiXkaze on 9/8/2012 6:29:04 PM , Rating: 2
That is right the whole bailout ordeal started with the Bush administration.


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