"The business of GM in Shanghai is pretty good," Secretary Yu told the president. "By the end of October this year their sales has increased by 40 percent over the same period of last year. I think that the fantastic performance here in Shanghai is definitely a boost to their business in the United States."
"Absolutely," said President Obama. "I think they can learn from their operations here in terms of increasing sales back in the United States."
Specifically, at a time when the nation's unemployment rate has soared to levels not seen in decades and GM is cutting thousands of U.S. jobs, the company's CEO is considering spending millions from its U.S. coffers -- fattened by $50 billion in taxpayer aid -- on its overseas operations, a possibility that has outraged critics and lawmakers.
"I don't think most Americans believe that when the taxpayer bailouts were happening it was intended for that purpose," said Rep. Anthony Weiner, D-N.Y. "It was intended to protect the American economy -- not take the money overseas."
GM today reported that it lost $1.2 billion in the third quarter, from the time it left bankruptcy protection through Sept. 30.
GM's Chief Executive Fritz Henderson recently announced that the bailed-out automaker might use its U.S. funds to help restructure its European unit Opel, noting that the financing agreements with the Treasury for the $34 billion of bailout funds already spent allow GM to spend any subsequently earned funds as its executives see fit. Some $16 billion remaining after its bankruptcy has strings attached.
In a world where funds are fungible, where GM has yet to repay the $50 billion bailout, and where GM only remains in existence because of those bailout dollars, critics argue sending these funds to Europe is essentially the same as sending taxpayer dollars overseas.
"We certainly need to be prudent about it, be very careful about it, but we do have the ability to run a global business," Henderson told reporters earlier this month.
GM has other plans to expand its business abroad. In August, GM China announced a $293 million venture, while last month GM South Korea announced a new infusion of more than $400 million. The automaker also recently inaugurated a $300 million transmission plant in Mexico.
The reasons for international expansion are obvious -- Asia, for instance, is the fastest-growing economic region in the world, forecast to grow at a 7 percent rate next year.
A GM spokesman noted that the best way for the Detroit automaker to repay American taxpayers is to be strong internationally.
"As much as some people might wish that it were not so, the reality is that the auto industry is global, and no company can survive without a strong global presence," said GM spokesman Tom Wilkinson. "Any dream of a U.S.-only carmaker is just that: a dream."
Wilkinson said "the exit financing agreement for the new GM does permit some money earned by GM here to be used for non-U.S. operations."
The Treasury Department declined to comment on whether it was appropriate for GM to send money from its U.S. accounts to shore up its European operations.