USC GOP

I remember when Ross Perot was railing against the ratification of NAFTA claiming that a giant sucking sound would be heard from the jobs being sucked out of the United States into Mexico. Well, that has happened with one exception: the country is China, not Mexico (and NAFTA has nothing to do with that).

But United States assets are potentially being lost as well. The communist government of China is supporting the CNOOC's takeover bid of Unocal to the tune of $10 per share at little or no interest. This would allow the communists to effectively take over a major fuel asset of the United States. Chevron should not be the only entity concerned - all Americans should be bothered by this potential deal. Yesterday, the House moved to block the Bush Administration's ability to investigate and reccomend the deal in a 328-91 vote, but the deal is not dead. CNOOC may turn its sites (as dictated by Bejing) on to other assets (like Australia's The Gorgon Project). Although this might seem good for the U.S. in the shortrun, having our allies lose control of their petroleum production is not a good thing for us in the long run.

Then there is venerable Maytag who makes washer, dryers and Hoover vacuums among other things. Haier of China has entered into a bidding war after the due diligence period was supposedly over and a contract signed between Maytag and Ripplewood. At stake are 18,000 American jobs. The odd part of this story is that one analyst thinks that Haier is less likely to ship the jobs back to China. That would only be true, in my humble opinion, after the Chinese demand major concessions from the union employees. The analyst counters by saying that the Chinese are likely to use the existing plant to provide parts for its current Chinese line of products.

Meanwhile, Thursday was the last day for United States citizens to inform the IRS of offshore accounts. Those "who fail to comply face a $10,000 fine and a maximum civil penalty of $100,000 or 50 percent of the value of the offshore account." The result may be that people will have already or will have soon shift funds from "friendly" reporting countries to places like Singapore and, drum-roll, China (as in the Hong Kong Shanghai Bank).

If there is any good news, it comes from Toyota, who is expanding its Camry plant in Kentucky and building a truck assembly plant in San Antonio. Unfortunately, Toyota has announced plans to expand in North America, but not in the United States with plans to build one new plant and expand another in Canada.