GM is Gaga For Texas IT Center
September 7, 2012 5:44 PM
comment(s) - last by
Company is hiring hundreds of American workers, building new facilities, and trying to improve efficiency
When you think General Motors Comp. (
) 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
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
, and to this day
ardent defender of the bailout
that arguably saved the company from liquidation.
The company today
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 (
) largest U.S. call center and Samsung Electronics Comp., Ltd.'s (
massive chip fab
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
". 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 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
over the last couple years over accepting government money and opting for structured bankruptcy/government takeover instead of a liquidation. However, the
is a welcome trend amidst mass layoffs from the likes of
Research in Motion
, Ltd. (
, Inc. (
) in the tech industry.
Of course, Ford Motor Comp. (
) is also in the relatively small minority of companies looking to
expand its domestic manufacturing
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
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.
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RE: Too early to know...
9/9/2012 4:01:42 AM
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.
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