Fact-Checking Obama: GM World's #1 Automaker?

Obama's 2012 State of the Union address was your typical flag-waving, USA #1 cheerleading exercise. It's to be expected with these kinds of events, to be fair. Particularly notable on the trade end though was Obama declaring the creation of a "Trade Enforcement Unit that will be charged with investigating unfair trade practices in countries like China"--your official China-bashing unit. Those trade evildoers must be punished, eh?

Together with the formation of this odious agency, however, we too have an egregious misstatement of fact concerning the bailout of various troubled American automakers in the aftermath of the (self-inflicted) 2008/09 subprime crisis. To quote from Obama:

On the day I took office, our auto industry was on the verge of collapse. Some even said we should let it die. With a million jobs at stake, I refused to let that happen. In exchange for help, we demanded responsibility. We got workers and automakers to settle their differences. We got the industry to retool and restructure. Today, General Motors is back on top as the world’s number one automaker [my emphasis].

GM's claim to being the world's top automaker is iffy. Germany's Volkswagen Group has a better claim to the title. Since dodgy accounting and America are practically synonymous, we must look into the GM claim. It says that it sold 9.03 million vehicles in 2011. But, this total was achieved with the sleight of hand of including the output of a Chinese subsidiary that it has interests in but does not own:

GM's rivals also point out that the big U.S. auto maker's numbers are boosted by ownership stakes in China's SAIC Motor Corp. and Liuzhou Wuling Motors Co. While SAIC builds GM cars in China, Wuling's 1.2 million vehicles last year are mostly cheap commercial vehicles used only in China.

Some analysts prefer not to count the Wuling vehicles in GM's global total because GM doesn't have a controlling stake in its partner [my emphasis]. "We have to draw the line somewhere and this at least gives us some consistency around the globe," said Jeff Schuster, an analyst with forecasting firm LMC Automotive.

The VW Group previously reported that it sold 8.16 million vehicles in 2011. Unlike GM, it did not count the numbers of its commercial vehicle subsidiaries MAN SE and Scania AB (formerly of Saab-Scania for you trivia buffs). Attention GM: it helps with the bragging rights that VW actually owns these concerns. Adding both in boosts VW figures by about 200,000. So, subtract the 1.2 million Wuling vehicles gives you legitimate GM sales of 7.83 million vehicles. The once and future king of all things automotive however is the maker of the people's car with [8.16 + 0.20 =] 8.36 million in vehicle sales.

Bottom line: American automakers AND politicians are economical with the truth if not necessarily with taking away the well-being of future generations. Yanquis attempting to pull an (amateurish) fast one; what a surprise. Germans have a reputation for being plainspoken; certain others for being emptily boastful. I would also love to hear the response of unionized and protectionist crowds Obama is pandering to when they find out that GM's (bogus) claim largely boils down to Chinese production. "Made in America?" Not quite.

Why doesn't this glib assessment of US bailouts for all and sundry money losers not discuss, say, mortgage lenders Fannie Mae and Freddie Mac? How about the airline industry? Yesterday was a more appropriate moment to call Obama out on this untruth.

As a parting shot and returning to the notion of a level playing field (whatever that is to these folks), given Obama's thumbs-up to massive government intervention, he compounds untruth with hypocrisy in the SOTU with special reference to China:

It’s not fair when foreign manufacturers have a leg up on ours only because they’re heavily subsidised.

Having claimed to have "saved" the US auto industry, I guess that logic legitimizes the PRC slapping tariffs on large automobiles imported from the US, doesn't it? Revisit the good book and what it says about casting the first stone.