According to the Wall Street Journal, China’s Ministry of Industry and Information Technology is currently drafting a 10-year plan that has as it’s goal making the country the world’s leading producer of plugin hybrid cars and technology by 2020. This news was provided to the Journal from a group of international auto executives.
The policy is being designed to force foreign automakers to share critical EV technology and intellectual property with the Chinese government in exchange for being allowed to sell cars there. The automakers would be required to enter into joint ventures with Chinese state-run companies, and would only be allowed to take minority stakes in these ventures.
The rapidly growing Chinese market, and its emphasis on reducing petroleum dependence is extremely important to automakers looking to expand sales and profit, GM included.
Since Chinese car companies have been unable to break into international sales, blackmailing US and other automakers into giving away EV technological secrets is a shortcut to that goal.
Needless to say, foreign automakers are very unhappy and concerned about this developing policy.
The plan is “tantamount to China strong-arming foreign auto makers to give up battery, electric-motor, and control technology in exchange for market access,” a senior executive at one foreign car maker. told the Journal. “We don’t like it.”
US Representative John Dingell, a Michigan democrat, became outraged at the idea after reading the Journal article and has written a letter to China’s ambassador to the US Zhang Yesui. Dingell said the Chinese plan would violate “the sanctity of the intellectual property laws we hold so dear in the United States.”
In the letter he said China should not “require foreign automakers to hand over electric vehicle technology to their Chinese competitors in exchange for market access in China.”
“China generally blocks U.S. companies from holding majority stakes in ventures and requires them to get Chinese partner, he added. “The U.S. has no such requirements for Chinese companies to acquire U.S. firms.”
Dingell and Senator Carl Levin also of Michigan (D) are urging a congressional committee to examine China’s actions. “We should all be alarmed by China’s attempts to dominate the renewable energy industry through measures that discriminate against foreign manufacturers,” Levin said.
GM has a large sales volume in China, even greater than its US volume. It also plans to sell the Volt there, and is already in a joint venture with Chinese company SAIC to develop the pure electric Chevrolet New Sale for the Chinese market. The SAIC-GM-Wuling joint venture has been successful in selling cars in China since it was formed in 1998
There are reports that the Chinese government via SAIC is eying the upcoming GM IPO closely, and is considering buying a stake in GM from the US government, currently a 61% owner. In fact, the U.S. Treasury Department has conceded GM investors would be sought from “multiple geographies.”
“Shanghai Automotive is watching GM’s progress closely,” wote SAIC staff in an email to the AP. “As a strategic partner of GM, SAIC-GM hopes for a successful IPO.”
If you think you have a problem with “Government Motors,” how do you feel about “Chinese Government Motors”?
Food for thought.
Source (WSJ), (AP), (Bloomberg), and (Detroit News)
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Sep 23rd, 2010 (6:24 am)(click to show comment)
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Sep 23rd, 2010 (6:29 am)(click to show comment)
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Sep 23rd, 2010 (6:33 am)(click to show comment)
+5
Sep 23rd, 2010 (6:35 am)SAIC is considering a 1% stake in GM’s IPO. Hardly an ‘ownership stake’ which implies greater than 50%.
The Chinese have been unsuccessful in global car markets because they don’t know how to build global-content cars. Even if they get some IP from GM, that IP will be obsolete by the time they can roll out a product.
It’s the software that makes Volt work. Without that, building a Volt clone is impossible. You can’t just take version 1.0 and run with it. Version 1.1 will make your clone uncompetitive.
+8
Sep 23rd, 2010 (6:38 am)Just scarey stuff. Governments in general are scarey. We could hope that the Chinese government becomes as inept as ours, but…
+18
Sep 23rd, 2010 (6:40 am)It is the same old story.
If you have the cash, you get to try to dictate the terms.
Does GM have the stones to just say no? Because if not, it is all over for GM. Once The IP is out, GM is then competing with itself, and that is no long term strategy for success………..
JMHO
+47
Sep 23rd, 2010 (6:47 am)IMHO, this issue is about protecting emerging technology that has the capacity to produce much needed US based jobs. China will copy get the technology eventually and copy it; they just should not be allowed to extort it.
Yes, China is now the largest car market in the world; and yes, China holds vast reserves of the natural resources needed to produce EV components – particularly batteries. However, China has proven capable of two things: making things cheaper and making things cheaper. Many, although not all, Chinese made products are produced cheaper than elsewhere – due in large part to minimum labor costs. This is begining to change. And Chinese made products have proven to be made of cheaper materials, thus product quality and consistency has been called into question.
At the very time that our US economy is in desperate need for job creation, emerging technology holds our best chances for true quality job growth. At a minimum, the US Governement must help US business protect the intellectual property they have invested in developing and allow US companies a chance to earn back at least some of that investment.
+31
Sep 23rd, 2010 (6:47 am)They did the same thing to boeing, now they are planning to cut boeing out that they have all their Tech and build their own large jets.
+6
Sep 23rd, 2010 (6:48 am)Not just the software in the car, but the software in the GM mainframes that run the design models and simulators.. these are the ones (along with the engineers) that allow extreme fine tuning and refinement.
An example may be the BYD F3DM, featuring a mechanically sophisticated serial-parallel architecture.. yet by some reports it does not achieve the refinement or efficiency of a Prius.
Motors have been around for a long time, and the tech is VERY mature.. fairly soon every manufacturer in the world will use almost identical motors/inverters to everyone else.. it will take a little longer but eventually the same thing will happen to batteries. This is good, this will lower prices.
+4
Sep 23rd, 2010 (6:49 am)IP is obsolete once it hits the manufacturing process. It would have to be a constant process of updating their code base and knowledge base as new products are invented. There will be some delay in that process making the information non-competitive.
Look at China’s success with PC clones. Not a ringing endorsement of using technology that you don’t control. With PCs, they still have to license Windows from Microsoft.
GM and other American companies are not stupid (generally). They will figure out a way to get the blades sold that are required to make the razor work.
+23
Sep 23rd, 2010 (6:54 am)If a billion brains cannot come up with innovative ideas, I as a “government” would ask myself why instead of trying to steal anyone else ideas. But I guess that’s a question they’re not allowed to ask.
-1
Sep 23rd, 2010 (7:08 am)the Chinese EV market is not so important that they would give away billions worth of investment for a few sales – electric cars have a long way to go before acceptance there; just trying to find a plug to hook up to would be a major challenge. Not impossible, but a major challenge!
Actually, i personally doubt the claims will get any further than a “suggestion”. they were probably just mentioned in passing or raised at some general meeting and someone decided to add it to a report. I also heard a general say “lets just attack Taiwan now and get it over with…”, that hardly makes it policy.
+9
Sep 23rd, 2010 (7:40 am)The unions should be happy if China buys GM… Remember it is the “Worker’s Party” that is running china. The unions are surely to benefit!
My dad was a UAW member at an Axle plant in Wisconsin. His old UAW newsletters were full of ads for various socialist and communist group meetings (Madison & Milwaukee) in the 70′s. I give him crap about it all the time! LOLOL
-2
Sep 23rd, 2010 (7:47 am)“Since Chinese car companies have been unable to break into international sales, blackmailing US and other automakers into giving away EV technological secrets is a shortcut to that goal.”
Whoa Lyle dude! That sounds like a battle cry! So far, I am happy to see most responses have been rather sober.
This is a negotiation point. From the Chinese perspective, it’s a quid pro quo. But you know in a negotiation no side gets everything they want. They have a market of 100 million “rich” consumers capable of buying an American car. The others will need something like an electric Nano. The future Chinese business model and how it fits in with the rest of the world is going to be the most exciting challenge all business majors will have.
When the Japanese first starting making cars people thought they would be too cheap to compete and now Toyota and Honda are the most popular cars in the world but we still have US made cars. 10-20 years from now there will be many Chinese electric cars rolling around and Indian cars etc. The best way to stay in business is to compete and keep making things better. This makes it better for us the consumer.
+35
Sep 23rd, 2010 (7:51 am)This is extremely alarming.
I do not trust communism.
I would rather have my tax money tied up in GM than the Chinese.
From the article
“China generally blocks U.S. companies from holding majority stakes in ventures and requires them to get Chinese partner, he added. “The U.S. has no such requirements for Chinese companies to acquire U.S. firms
Well, then maybe we should.
+8
Sep 23rd, 2010 (7:56 am)At least China is being upfront about stealing technology. Usually they just reverse engineer it in the shadows.
We could also force China to open plants in the US for any product they want to sell here? tit for tat?
+4
Sep 23rd, 2010 (7:59 am)Easy come easy go.
Say good bye to the Chinese market or say good bye to your automotive Voltec proprietary lead.
NPNS!
Sep 23rd, 2010 (8:18 am)Related,
Cars.com American-made Index:
“GM, once responsible for half the models on the AMI, is down to just one player: the Kansas-built Chevrolet Malibu, which comes in fifth place. The automaker’s full-size pickups — the Chevy Silverado and GMC Sierra — were once regulars here. Production of both trucks is split between the U.S. and Mexico, however, and today’s models have only a 65 percent domestic parts content.”
http://www.cars.com/go/advice/Story.jsp?section=top&subject=ami&story=amMade0710
+20
Sep 23rd, 2010 (8:20 am)What a clear indictment of China’s inability to compete head to head with regards to technology. They cannot build anything that can compete on the world stage, all they can do is copy existing technology and reproduce it at a lower cost.(and at lower quality)
By requiring auto manufacturers to share their intellectual property they are essentially admitting they are unable to engineer competitive cars and need help. I know it’s a huge market but I would love to see GM and others tell them to shove it and let them continue to drive the crap they make there. Cheap, imitation junk is all they can make. I don’t want to see GM or anyone else give them any IP that took them years to develop.
+7
Sep 23rd, 2010 (8:27 am)While the strong-arming and Intellectual Property blackmailing are alarming, there is a positive side. This action shows that China desperately doesn’t want to become an oil-junkie… like some other countries I know. This is good news for peak-oil worriers. Without 100 million new Chinese gas tanks to fill, we may get through this.
Electric cars are coming and they’ll be common place sooner than we ever anticipated.
+27
Sep 23rd, 2010 (8:32 am)GM needs to protect its technology at all costs and NOT give it to the Chinese. They need to learn their lesson from their joint venture with Chery, who copied one of their designs a few years ago. These people want the technology, so they can copy it and build their own cars in competition. The Chinese have no respect for property rights whatsoever. If GM gives them access to the Volt technology, they WILL copy it; that is a guarantee!
A lot of Western companies are being so short-sighted, it’s crazy. Airbus did the same thing GM did with Chery and look what happened……a Chinese aviation company has announced a new aircraft and, gee, what does it look like? An Airbus A320 variant!
I have been to China twice and lived there for several months and I have seen first-hand how their culture is. NOTE: I don’t hate the Chinese because I met wonderful people over there and they were very accommodating.
But when the communists took over in 1949, one of the first group of people they went after were the intellectuals, the innovators, the inventors, people who could think for themselves. This was further exasperated by the Cultural Revolution of the ’60s and the aforementioned people were killed.
The reason I mention all of this is that it has done incredible damage to Chinese society, as creativity is not encouraged, innovation is not encouraged, or anything of the sort. All they know how to do is COPY other peoples’ ideas.
Chinese society is no longer unique; they are becoming extremely Westernized, eating at McDonald’s, watching Western TV shows and wearing Western clothing. I even told some people over there that China has a rich history and a lot of things that have been contributed to the world and that they needed to stop copying the USA and instead innovate, be creative and come up with their own things to contribute to the world.
GM needs to closely guard the Voltec technology; if they don’t, the Chinese will COPY it and create a Chevy Volt CLONE shortly thereafter.
+3
Sep 23rd, 2010 (8:40 am)=============================
I agree and disagree with your logic:
I don’t think that IP is immediately obsolete once it hits manufacturing. Agreed in the PC world where CPU chips have a life span of about one year, but not that way for all other industries.
How many unlicensed copies of Windows are installed in China for every paid copy? That is a real problem for all software companies, as the government turns a blind eye to it. Here is a link:
http://news.idg.no/cw/art.cfm?id=1664AA90-1A64-6A71-CE65AD5485C04350
As far as companies not being stupid, I tend to agree, but I just hope that GM and other international companies don’t give away the store, just to get some market share. Sometimes the bean counters don’t see the long term implications of a short term profit margin.
JMHO
+26
Sep 23rd, 2010 (8:53 am)Chinese ownership of GM will turn this life-long GM buyer into an overnight Ford man.
+31
Sep 23rd, 2010 (8:55 am)When will we get smart and just tarrif the crap out of Chinese goods?
+9
Sep 23rd, 2010 (8:59 am)This isn’t a new tactic for China.
+9
Sep 23rd, 2010 (9:04 am)+1. Yeah the Chinese are thieves. No doubt about that. Let’s add “currency manipulating thieves”. Ha ha.
Sep 23rd, 2010 (9:06 am)There is no reason to dump negatives on herm’s comment at #3.
One may or may not agree, but what he said is hardly troll-like.
Sep 23rd, 2010 (9:07 am)It’s business, and the Chinese are pretty good at it. They recognize that Chinese markets are one of their most valuable resources and the Chinese government has near total control over it. I think this is a good move on the part of the Chinese. They will be eager to have some major manufacturer cave to this approach. If GM wants to penetrate Chinese markets it may be in their intrests to take the bait, but it they are early in the game they may be able to get concessions that others won’t. At some point in the near future the US taxpayer will be getting rid of their 60% share of GM. If the Chinese are going to bid the price up then bailing out GM will prove to have been one of the all time great decisions by the US government.
I agree with Loboc that the voltec IP value will decrease dramatically once manufacturing ramps up. On the up side tens of millions EV in China will certainly be a positive impact on vehicular climate impact.
+3
Sep 23rd, 2010 (9:11 am)Dragging O.T. politics into the forum is what sets people off. Now if Dingel was pro-China or had some other link to this thread, then, there may be a case for it.
-2
Sep 23rd, 2010 (9:27 am)Just more international bull crap that has over the years been a GM primary move of having far too much reliance on foreign markets. We have a big country and over the years the US Auto Makers have let the foreign Auto Makers out shoot them in the autos that obtain good gas mileage. GM shot themselves in the foot when they built a good electric (EV1) and then destroyed them like a bunch of goof balls.
Well it seems as if they are starting down the road of giving away something now so they can make a profit tommorow which, doesn’t last long. If China wants to purchase the Volt, let them do it but with out stipulations on our technology. The US Tax payers funded the VOLTEC program regardless of what the “New GM” may think. I guess while GM thinks about that, they will need to give out a few more Million Dollar Bonuses.
Will the Volt cost $40,000 plus in China. Probably not if they get the VOLTEC besides, they will make it much cheaper and maybe affordable in this country. Um! There goes our EV market. Does it sound like the past or is any of the GM Executives old enough to remember what happened about 50 years ago.
+9
Sep 23rd, 2010 (9:28 am)This sounds like a new kind of (forced) outsourcing. In addition to our jobs going overseas. Now we may be required to give away our intellectual property to have access to a market. A new way to steal secrets… now in the open???
The days of protectionism ( ’30s ) may be back upon us. Do we make the same requirements for products that come from China ( or other places that Chinese influence) where a plant is required here with a US partner plus tariffs?
+25
Sep 23rd, 2010 (9:31 am)China seems to be playing in a childish manner; akin to “It’s my bat and my ball and if I don’t get to play pitcher, I’m going home.” Well, what do you do when the child says, “I’m going to hold my breath until I get my way”? You let the child sit there…, and pass out if need be. The worst thing you can do is let the child dictate the rules. I hope world automakers unite (and GM, I hope you are listening), do not give in to Chinese demands. They have drawn a line in the sand. If you give in to this demand, it would be tantamount to giving Hitler the Sudetenland. China must learn there are limits to dealing with foreign countries (and corporations). If you give in now, there is no predicting what the next set of demands might be. Hugo Chaves, anyone??
+5
Sep 23rd, 2010 (9:31 am)I think the problem is if China buys GM, the first thing they will do is shut down US plants and start bringing in all the cars from China. GM would lose many customers as this would not bode well w/them. Even if China continued to produce the cars here, I still think a huge portion of GM’s customers would jump ship.
+4
Sep 23rd, 2010 (9:35 am)Don’t fool yourself it’s politicians in general.
+5
Sep 23rd, 2010 (9:37 am)I have bought China-built auto parts and they are crap.
I bought a replacement window regulator for my Dodge truck that was sourced in China. The copy was an exact duplicate of the original. However, Dodge had redesigned the original because of a weakness in the design.
The Chinese copy broke within a year and I had to buy a Dodge part to fix the truck. Yeah, the Chinese part was half the price, but, I had to do the repair twice which wiped out my savings and more. The Chinese part was also noisier and lower quality than the original. (The original lasted 8 years and only broke because of ice on the window.)
This is the point with my previous comments in this thread. You cannot just copy something forever. The new and improved part/system/software obsoletes the original eventually.
As with a xerox copy there is a fuzziness to the precision. It’s just not the same.
Sep 23rd, 2010 (9:37 am)If its a trade war you want, be careful what you wish for.
When China stops buying US debt, our nation is put in peril.
We are now officially between a very hard rock and a very hard place.
Our nations debt level now makes us suceptible to international blackmail.
This was very well illustrated about some time ago in the movie “I.O.U.S.A.”
http://www.youtube.com/watch?v=O_TjBNjc9Bo
(This 30 miniute YouTube version is now a bit dated since it was done pre-Obama.)
And what’s to keep China from becoming the largest GM stockholder?
But enought of that from me. This is more “Static” territory.
My primary job in life is to be happy.
+7
Sep 23rd, 2010 (9:40 am)We won’t for a long, long time. We are just as hooked on cheap Chinese products as we are on Middle East oil.
-1
Sep 23rd, 2010 (9:43 am)Microsoft did this to itself, if you try to buy your own copy of windows it will cost you $169, yet companies such as Dell pay about $35 for it.. yes you can buy older versions for less.
http://www.amazon.com/dp/B002DHGMK0
Sep 23rd, 2010 (9:44 am)i don’t think the boeing analogy applies; private individuals don’t buy commercial airliners and if the commercial airlines in china are government owned, then the chinese government would pretty much be able to do whatever they wanted to do. the united states government doesn’t have to operate under wto restrictions when it makes defense purchases.
automobiles, however, are generally purchased by private parties, so it is hard for me to understand how china could legitimately enforce such a plan. this plan, as reported, sounds so suspicious that i am wondering whether it is being accurately reported.
-4
Sep 23rd, 2010 (9:51 am)jingoistic rhetoric is all fine and well, but ultimately, you have to live in the real world. if china is the largest market for gm (as i understand it, the china market basically saved the buick brand), it is not realistic to expect that they are going to build all their cars here in the united states and export them to china – they would get killed on import duties. if they go into high volume sales in china, the cars will be made in china. that’s no different from what japanese car companies do – the high sales volume cars tend to be made in the united states while high end, lower volume cars are made in japan. bmw and mercedes benz follow the same scheme. that’s just the way that the real world works.
+1
Sep 23rd, 2010 (9:56 am)There must be a lot of Dingell supporters here.. he has been in congress for 55 years representing parts of Detroit so someone must like him.
-3
Sep 23rd, 2010 (10:05 am)these kinds of mindless stereotypes about how asians only know how to copy but don’t know how to innovate have been around for decades and don’t serve the interests of the united states or its people. instead, it leads to a false sense of security and a tendency to hold on to a “norman rockwell” view of the world while in reality the world around us is changing.
1949 was over 60 years ago. you can’t live in the post-world war II world forever; post-world war II, the united states accounted for about 80% of world GDP. things change. president obama is quite correct in noting that other nations are doing a better job of educating their youth than we currently are. if that continues, this country will not be able to compete in the future. that’s why it is so important to get rid of the stereotypes that suggest that there is some “american exceptionalism” that inherently makes the united states superior. when that happens, you can be assured that you are living in a civilization that is in decline. i’m sure that the leaders of the roman empire stoked their people with talk of “roman exceptionalism”; but now the roman empire is merely a historical footnote.
-1
Sep 23rd, 2010 (10:06 am)Lol. I had to look that one up. By jingo.
+4
Sep 23rd, 2010 (10:11 am)if you buy 1 share of stock in a company, you have an “ownership state”; it just turns out that that ownership stake is called a “minority interest”, as opposed to a “majority interest” or “controlling interest” (these two are not necessarily the same).
as to the idea of IP being obsolete by the time goods enter production. i don’t believe that – if it were obsolete, it would have no value and nobody would buy it. the reason why people get patent protection for IP is because the IP does not become obsolete by the time of production.
+2
Sep 23rd, 2010 (10:13 am)And this from a blogger that uses 18th century jargon like ‘jingoistic’.
Very fast blogger though. Must type like 160wpm. I guess not using the shift key is way faster.
+6
Sep 23rd, 2010 (10:16 am)IMHO This is no surprise to me. Once GM decided to build a state of the art research lab in Shanghai, with Chinas partnership, technology is um, shared. I try to avoid buying Chinese products when Possible, because of safety, labor practices and trade imbalances. The camels head is allready in the tent and she is carrying alot of U. S. Debt in her saddle bags. The rich will get richer and the rest of us are screwed.
Sep 23rd, 2010 (10:27 am)The IP will be obsolete by the time the Chinese roll copies to production in 3 to 5 years. You believe that a 2011 car designed between 2006 and 2010 and it’s tech will be current in 2016? GM has already admitted that their battery tech is on Gen 5.
Ok. Wheels and other hardware don’t change much. The software, engine controls, transmission controls etc. change at a much faster pace. Styling changes fairly quickly as well.
The Chinese build stuff like the Russians used to do it. Cranking out old tech way past it’s prime.
-1
Sep 23rd, 2010 (10:35 am)A lot of red numbers here today.
There are many ways GM can go on this issue. One obvious way is to simply provide lip service. And explore other fertile areas around the world.
With the long tradition of gasoline sucking monsters GM has produced. They aren’t in a hurry to covert more than 5% of their sales to Voltec. This will take many years and many positive reviews. Along with growing demand for Voltec. So, in the meantime, produce 100k Voltec cars. And 100k Voltec trucks per year.
Watch the other manufactures scramble to get on board. Then when it’s apparent that change is the profitable route to take. Get serious about cranking hard on production and let the sales force deal with the units to be moved.
There will be a day when GM must choose to dominate or cut bait.
=D-Volt
+9
Sep 23rd, 2010 (10:51 am)Well, this route will save the Chinese from the headache of having to commit industrial espionage like they normally do…
+6
Sep 23rd, 2010 (10:58 am)That doesn’t make it OK to steal someone else’s intellectual property. If they can’t afford the up-to-date version, they can buy a cheaper version. Or go without.
By the way, not having to pay for Windows gives Chinese companies an artificial advantage…
+1
Sep 23rd, 2010 (11:02 am)LOL!!! China is ENCOURAGED to buy many shares of the new GM IPO!! About time China started investing in U.S. manufacturing. Will they ever own a controlling interest? No. GM makes strategic assets for military and can never be owned by a foreign guvm’nt. Especially one with minority rule and a shameful human rights track record.
But GM welcomes Chinese dollars that expand manufacturing, grow new JOBS, and buoy the local economy!
As for sharing trade secrets… in exchange for market exclusives. China has only a market to bargain with. They have little original IP and manufacture low quality copies of western technology. The crippling of their infrastructure from massive traffic jams lasting weeks at a time and overzealous projections has dramatically slowed new car sales. The current growth rate in China is utterly UNsustainable.
+3
Sep 23rd, 2010 (11:03 am)Sure you can compete w/uneducated youth. You just force everyone else in the world to give you their technology. What’s the point of educating youth, if all the work they do will just be given away? Sort of like the bully making the nerd do his homework.
/end snarkyness
-1
Sep 23rd, 2010 (11:04 am)We seem to give into demands of the junk science enviromental extremists, all the time. More and more senseless red tape and EPA extreme doctrinaire, weighing down our economy. Case in point,
we are going to kill our economy even more with idiotic cap and trade rules, dictated by an un-elected EPA, to regulate CO2, 95% of which is created naturally.
WTF, China owns are butts anyway, the 2 party oligarchy has pile up so much debt, all we can do is STFU, and let China own GM.
-1
Sep 23rd, 2010 (11:06 am)Gummint owns GM
China owns Gummint
What’s your problem?
Don’t like State control of the means of production?
Maybe you are wising up.
+1
Sep 23rd, 2010 (11:07 am)i fully believe that battery technology is evolving. but that doesn’t mean that current technology would be worthless in 3 to 5 years.
+5
Sep 23rd, 2010 (11:11 am)We provide equipment to foundries, and a few years ago I was talking to one of the managers at a foundry. He said they had lost a lot of business because some of his customers were buying their castings from China for much cheaper. I asked him if he was worred. He said he was until a couple customers came back to him. Apparantly they had received a huge shipment of castings from China and they were all painted. This surprised them because they hadn’t asked for the castings to be painted. So they put a few of the castings in the blast machine to remove the paint. Instantly they realized why the castings were painted. The blast machine not only removed the paint, but also the plaster used to conceal all of the pitting in these horrible quality castings. After checking a few more of the castings they realized they were all basically worthless scrap metal. They wondered how many other US customers didn’t bother removing the paint, or do any kind of quality check.
-1
Sep 23rd, 2010 (11:12 am)these numbers don’t have a lot of meaning for determining which posts might be more worth reading than others. i see some posts that get big negative numbers and when i look at it, i find it hard to understand why, other than the post might have some critical commentary. on the other hand, i see some posts that get big positive numbers and i find no substance that would explain why the post got so many positive votes.
Sep 23rd, 2010 (11:12 am)Well, nineteenth century actually … and very nearly the twentieth.
Which is to say, specifically, 1878!
See etymology of “jingoism”, George Holyoke, etc., found at:
http://en.wikipedia.org/wiki/Jingoism
</pedantry_mode> <— Oh, oh! Now I gotta look that one up, too…
+2
Sep 23rd, 2010 (11:12 am)We need the highest-level trade talks with the Chinese. In fact, the whole world needs to be in talks with itself. Lots of export/trade issues are coming to a head, e.g., everyone wants to export themselves out of their slow growth and deficits. This EV intellectual property issue is just part of that bigger picture. We all need a lot of international coordination here. Don’t expect to see any attempt until after the Nov. US elections, though, at the earliest.
+6
Sep 23rd, 2010 (11:16 am)Actually, if China stops buying US debt, we’ll be a lot better off in the long run. And probably even in the short run. It would instantly render the American economy a lot more competitive. And it could create a lot of jobs.
Basically, in order to stop buying our debt, they’d have let the renmimbi appreciate relative to the dollar…
+8
Sep 23rd, 2010 (11:21 am)No one–Chinese or American–can replicate our IP without copying it. The developed countries have too large a lead. However, once we give away our head start–we discount their abilities at our own peril. We underestimated Japan. And South Korea. Let’s not underestimate the Chinese.
+6
Sep 23rd, 2010 (11:25 am)Will we ever wake up and address UNFAIR TRADE!? This has been going on for at least 30 years.
Unfair Trade is our main economic problem.. fixing it will fix many other problems.
+6
Sep 23rd, 2010 (11:42 am)Question:
You are at the auto mall and you have 2 choices (and you can afford either one):
a) A new Volt, built in the United States of America for $40,280
b) A new Volt-clone, built in the People’s Republic of China for $17,995
Which do you choose?
If you choose ‘b’, I hope the company you work for goes belly-up due to the continued economic recession that you are helping to cause; I hope you lose your job, your home, and you don’t qualify for welfare.
Sep 23rd, 2010 (11:44 am)I believe GM sold “GM defense” in 2003, which constituted the bulk of their military production.
http://findarticles.com/p/articles/mi_qn4188/is_20030303/ai_n11381545/
I believe they still retained their military trucks division, but they could easily spin that off if they had to…
http://www.accessmylibrary.com/coms2/summary_0286-11344604_ITM
+3
Sep 23rd, 2010 (11:45 am)Agree totally. +1 +1 +1
America is the true people’s country. We are a people – Americans. We are not a GOVERNMENT. This is lost in translation to a few, but most of us in our hearts know this is our history and our heritage and we’ve fought for it in two world wars and conflicts just and unjustified.
It’s election season. Tell your Congresspersons or candidates this is TOP PRIORITY on your measuring stick. It’s our responsibility to impress upon politicians they work for us. This is another line-in-the-sand moment for us with China and it’s understandable they will test waters from time to time. Greed and shortsightedness cannot lead us into severe compromises such as giving anyone intellectual and financial authority over such an important sector of our industrial integrity.
RECHARGE!
James
-1
Sep 23rd, 2010 (11:51 am)But, other than that, you are OK with it? You know, if the quality of the product is equivalent, I would have to question the price. How long would that kind of govt subsidizing survive? That makes the $7500 tax credit we’re planning on for the Volt look paltry. It is quite a give away for the US consumer. I’d be tempted to take them up on it before they realize their mistake – so would many others of a practical nature.
+2
Sep 23rd, 2010 (11:54 am)obviously you’ve never heard of something called “predatory pricing”. in a predatory pricing scheme (which, by the way, is illegal), a company will sell products at a loss to drive competitors out of the market. then, after the competitors are gone, they jack the price up.
+3
Sep 23rd, 2010 (12:03 pm)Many Americans still believe all Japanese cars are better than American cars. Many Americans still believe that everything “made in China” is cheap crap. GM is still fighting to improve ‘their image’ of quality. How many years will it take China to convince anyone that their cars a quality-built and safe? I wouldn’t put any member of my family in one. I wouldn’t even buy my kid a car from Korea. With all of the best manufacturing jobs leaving the USA to go to far east, it’s no wonder this country is swirling the toilet bowl. All we need now is our current administration to sell what’s left to China. That would be the same as pressing the flush handle. Oh, I think he already did that.
Sep 23rd, 2010 (12:05 pm)Basically, Earth needs to run a current account surplus with Mars.
Sep 23rd, 2010 (12:12 pm)Well if it is illegal that should settle the issue once it works its way through the fine system of international justice. Really though, you’d pay $22,000 more for exactly the same product if it was a legitimate offer? I’m as proud as anyone of the US, but I can’t believe that kind of a price differential is ever going to make it to the car lot near my house. If it did – I’d buy it quickly before anybody noticed the insanity of it.
+4
Sep 23rd, 2010 (12:20 pm)It might ‘look like’ the same product, but is it really? With the Chinese reputation of ‘cutting corners’ and using cheap materials… Yeah. Go ahead and get one. If you really believe a Chinese copy is as good as the original… I’ve got a Rolex here I can let you have for $50 bucks. Deal?
+1
Sep 23rd, 2010 (12:23 pm)China is a multi-faceted enigmatic threat. Its enormous 1.3 bil. population is slowly westernizing and must adopt western economic culture to survive. An engineer’s pay runs under $500/mo. (Compared to US $7500 mo. typical before taxes.)
At the same time its a grave military threat. Claiming the entire South China Sea; threatening all its neighbors; and refuses to work with USA trying to stabilize the region. The PRC treasury now has amassed almost 2 trillion US dollars. Much of this resource is used to establish a presence in the Western Hemisphere. Particularly in South America and Canada. PRC could do the entire GM IPO out of its back pocket no sweat.
GM’s over 50% PRC sales must rely on continuing ties with us here and with the EU. It should be abundantly clear GM must spread some of this 50% sales risk across the EU directly – not through Opel.
-1
Sep 23rd, 2010 (12:24 pm)Well that is a different story. If the Chinese product doesn’t work then I suspect a few would chance it but most would learn of the quality difference and avoid it (platerboard come to mind). But that is not really an equivalent product.
+1
Sep 23rd, 2010 (12:35 pm)I, for one, eschew obfuscation and prolixity …
+3
Sep 23rd, 2010 (12:38 pm)Dude. It’s a community like any other.
Outsiders, or people who look like outsiders, are not easily accepted into the community. Declared outsiders have a real problem. Outsiders who attack a member of the community are summarily dismissed.
The community’s rules are not easily deciphered by a newcomer making it even more difficult to join. In the case of web forums, such as this one, it’s almost tribal. We’ve been called ‘Voltards’ and any number of derogatory epitaphs. Do that, and ya get voted off the island. Even if your next comment is positive or constructive, the precedent was set.
Go into any other forum (web or otherwise) and take a negative position. The same thing will happen.
/life’s not fair. And then ya die.
+2
Sep 23rd, 2010 (12:39 pm)If CJS comes around today, he’s gonna be busy on dictionary.com for sure.
+1
Sep 23rd, 2010 (12:40 pm)I guess this time they believe they cannot reverse engineer the thing fast enough for the result to be relevant. Tech moves fast.
They are not being upfront. There is just too much knowledge they cannot get fast enough in these new cars. Gosh, they can’t manufacture decent ‘old tech’ cars right now so…
They will buy US manufacturers outright. They have tons of cash to spend. They will not create jobs doing that.
+2
Sep 23rd, 2010 (12:40 pm)OT; Not sure how many miles you drive a day?
GE has created a very cool app that calculates it for you.
http://www.ge.com/thegeshow/electricvehicles/index.html#ch1http://www.ge.com/thegeshow/electricvehicles/index.html#ch1
NPNS!
+3
Sep 23rd, 2010 (12:49 pm)Corvette Guy,
There is a Walmart in your town right? This question has already been answered with actions. What people say & do when it comes to their money is to different things. People don’t care about quality anymore because society has become so disposable & instant. People are not concerned about “buying American” because people already know 70% of the Sh!t they buy is made outside our country anyway.
I couldn’t agree with your sentiment more, but unfortunately were on the wrong side of the ball on this one.
+4
Sep 23rd, 2010 (12:53 pm)Exactly. It’s a catch 21 thing : the poorer we get, the more we need to buy Chinese products. The more we buy that crap, the poorer we get…
+1
Sep 23rd, 2010 (1:02 pm)Words of wisdom.
+1
Sep 23rd, 2010 (1:05 pm)There’s a difference between obsolete (a newer/better product is in the pipeline) and worthless (no longer viable). A 386sx computer might still have some worth, but, it is completely and undeniably obsolete.
+1
Sep 23rd, 2010 (1:12 pm)Before using the product, how can you tell ? That’s the problem. You buy a Chinese product that ‘looks’ as good as the North American one but afterwards, you realize the quality is nowhere near the original.
You get nothing for nothing.
+1
Sep 23rd, 2010 (1:14 pm)You are an exec in a large American auto company. You have two choices …
a. Buy very safe and good but more expensive batteries from an American company
b. Buy cheaper batteries from a Korean company
If you choose ‘b’, I hope the company you work for goes belly-up due to the continued economic recession that you are helping to cause; I hope you lose your job, your home, and your company doesn’t qualify for a bailout.
“Patriotism is the last refuge of a scoundrel” ~ Samuel Johnson April 7, 1775.
+2
Sep 23rd, 2010 (1:50 pm)Exactly the reason GM is building their own battery plant in the USA. Thanks for making my point.
Sep 23rd, 2010 (1:54 pm)what makes a 386sx computer both obsolete and effectively worthless is that it would not be able to run current software. the equivalent is not likely to be true for the current volt.
+1
Sep 23rd, 2010 (1:58 pm)Another question: “If a Patriot waves the American Flag at a crowded auto mall and shouts, “Buy American”, does anyone really hear?”… Apparently the answer is “No.”
When my youngest kid (9) is my age, I hope his Chinese TaskMasters allow him to have a good job since they will own everything by then.
+1
Sep 23rd, 2010 (2:06 pm)LOL, We have an old Tandy TL1000 at work that is used for a special test instrument. It is a 286 4 or 8 Mhz. It was really ahead of its time in 1988. It could sense if a program was for 4 Mhz and slow the computer down to run the program!!!! Anyway it has churned out data since 1988 and is still going. It kinda became a joke around the lab, and now we do everything possible to keep it alive!
+3
Sep 23rd, 2010 (2:24 pm)I would buy the $40k one, but then I will expect the difference as a tax credit.. its about time rich people (that can afford $40k cars) get a break. This will stimulate the economy so everyone wins.
Do we know yet what percentage of the Volt will be made in the US?
+2
Sep 23rd, 2010 (2:27 pm)China is one of the reasons we are in the economic mess we’re in, Pick up any product in the store and look where it’s made – 9 out of 10 times you’ll see “Made in China”. That’s why they are now the fastest growing car market in the world because they all have jobs and the ability to afford cars. Fifteen years ago everyone in China rode bicvcles, but China got smart and started manufacturing all kinds of goods sold abroad with cheap labor (Cheaper than labor in the US). Now they have our jobs and our wealth, because we handed it over to them. We should All as Americans look at where products are made before we buy and find a way to live without chinese made goods. If we would all do this, then China would no longer be a lucrative place to sell our cars and many of our problems would correct themselves.
+1
Sep 23rd, 2010 (2:57 pm)This is an alarming event, however not surprising. The Chinese are not interested in buying products from other countries, they prefer to steal the technology and produce it themselves at a lower cost due to less regulation and lower labor costs. They also devalue their currency in order to make their goods cheaper in other countries.
Over time the quality of Chinese goods will continue to improve and the costs of labor will continue to grow making their products more expensive. We just need to make sure that there is fair trade with them instead of what’s going on now. Competition is good; however we need a level playing field.
I believe electric car and other green technology is what’s needed to keep this country prosperous. From what I’ve read, we lost a great deal of our industrial commons (Education, manufacturing, parts infrastructure) to Asia, primarily in the electronics industry. It’s easier to just have that HP laptop designed and manufactured in Asia as opposed to designed here and manufactured in China. We cannot afford to have our exports to only consist of raw materials and weapon systems.
Sep 23rd, 2010 (2:59 pm)Therefore, not worthless, even though it can’t run Windows 7.
+3
Sep 23rd, 2010 (3:11 pm)China’s demand on our technology base is pathetic. We must not give a damn thing to China for if they get their will in this event, it will be worse in the very near future however, we put ourselves at their will by letting them in the front door. They got in the front door simply because they had money and we couldn’t seem to manage ours.
This can’t happen. GM does not need China and they will recapitulate when they know where they stand for they want to become captalist, their style of captalist. To do what they want to do is to have cooperation of captalistic countries such as the, United States.
I believe General Motors and the US Government should just say NO! Don’t set around and think about it. This thinking action always draws out the greedy nature that, money must be the top consideration and this is not the case.
-1
Sep 23rd, 2010 (3:14 pm)Well said. +1
+6
Sep 23rd, 2010 (3:18 pm)You give China the IP at your peril.
They WILL steal and copy the technology WITH the support of the government and they WILL undercut the pricing structure until you fail.
Honestly, they will steal it anyway through reverse engineering but giving it to them outright is foolhardy.
(been burned…)
+3
Sep 23rd, 2010 (3:19 pm)I don’t understand why we still do business with China. Oh yea, because every large American corporation can make their stuff there for basically nothing, then sell it to us and to people in other countries and make much greater profits. What happens if we stop allowing U.S. companies to make things in China? They’ll probably move their headquarters to other countries and we’ll lose out on Tax revenue from those corporations to the U.S. government.
What’s this all about really? Slave labor. Any country that will have employees work the cheapest will have the most manufacturing jobs. As long as the product is reasonably good. Since I don’t see us going back to slave labor here, I think we’ll just have to focus on really high quality items. I see the Iphone and Droid phones, The Volt, and Perhaps our Military and Civilian Jets as being examples of those. It seems like perhaps Germany had to adjust to this model as we were probably producing items like the Model T much cheaper long ago.
China still has tons of problems and I’m still happy to be an American.
Sep 23rd, 2010 (3:24 pm)No crystal ball necessary to guess that this thread would “go political” quickly. Since I have zero desire to debate politics (“Never try to teach a pig to sing. It doesn’t work and it annoys the pig), I’ll just contribute a 1948 post-WWII “propaganda” cartoon:
http://nationaljuggernaut.blogspot.com/2009/09/this-cartoon-seemed-far-fetched-in-1948.html
and say…..
Be well and g’nite,
Tagamet
+2
Sep 23rd, 2010 (3:26 pm)Um, hasn’t Japan already been doing this for decades? And in all sectors, not just plug-in hybrids.
GM would be STUPID to go along with this plan. What audacity to even come up with something like that.
Sep 23rd, 2010 (3:29 pm)The per capita income in China is still around 3.600 U.S. dollars and the average person still doesn’t have a car. And if you were the puppet master of the world would you really want China a country of 1.1 billion fellow human beings to fall back into the gutter? One good thing about China is our pollution levels are down here and up there. Big northern U.S. cities used to be pollution cesspools. At some point China is gonna face some serious internal strife from it’s population if they don’t keep improving.
When the average Chinese person makes 10 to 20 grand a year which will be 50 to 100 years off it will be interesting to see where we are.
Where does money really come from anyways? How does this all really work?
-1
Sep 23rd, 2010 (3:32 pm)How hard is it really to reverse engineer something? I’d guess not hard at all. So is there really a big deal here? They’ll get it anyways. These are cars here not fighter jets or the latest Tony Stark Weapons.
+3
Sep 23rd, 2010 (3:34 pm)I use a similar argument with people who say we should buy American.
If two identical items are on the shelf in Walmart, one is made in China and costs $5.00
the other is made in America and costs $10.00, which one are you going to buy.
The answer is always the $5.00 item because people buy with their money and not their hearts.
I agree with both you and CG. Our situation is self perpetuating, and it sucks.
Sep 23rd, 2010 (3:36 pm)Well, I guess we disagree then. I happen to have a 386sx laptop and it is perfectly happy running DOS 3.3. It’s not worthless to me. However, it is obsolete.
Name one 5-year-old car and show it’s not obsolete in some way. I don’t see any model still having the exact same parts for 5 years for the entire car. Manufacturers make slip-stream changes in the same model year as issues arise. Parts become obsolete quite often with the replacement part being backward-compatible in some cases.
A 2011 Volt will be obsolete in 2016. Heck, it’ll be obsolete to me when I trade it in for a 2014. The person that buys it used will see some value, so, it won’t be worthless.
+2
Sep 23rd, 2010 (3:42 pm)They need time to reverse engineer. That’s what they are trying to steal. Time. Because they know that while they take TIME to understand what was done on their own, GM and other car companies will keep going forward, creating a new gap in technology.
You don’t catch up while reverse engineering. You just set yourself to build a ‘sort of’ obsolete technology.
Sep 23rd, 2010 (4:00 pm)Tag:
Where in the world did you find that video?????
+1
Sep 23rd, 2010 (4:03 pm)Iphone is made in China.
Sep 23rd, 2010 (4:05 pm)…Dingell said the Chinese plan would violate “the sanctity of the intellectual property laws we hold so dear in the United States.”
Now there’s a real joke!
+2
Sep 23rd, 2010 (4:07 pm)Harder than you think. The reason my company still has a few orders for China is only because we have machines they couldn’t reverse engineer. They tried & failed, so (for now) they still have to buy from us.
Sep 23rd, 2010 (4:15 pm)O/T
Just saw this:
“Chevrolet Volt’s electric-only range now 50 miles”
http://content.usatoday.com/communities/driveon/post/2010/09/gm-revises-electric-only-range-of-chevrolet-volt/1
Sep 23rd, 2010 (4:23 pm)I keep all the good ones (lol).
(A new thread, sans China, is posted)
Be well,
Tagamet
+2
Sep 23rd, 2010 (4:23 pm)Call your representatives about this. Now!
It’s easy to find your senators.. just go here… http://www.usa.gov/Contact/Elected.shtml
Tell them you want the US to respond to the Chinese demanding our technology!
Sep 23rd, 2010 (4:26 pm)your 386sx may have personal value to you, but i can’t tell you what should be of personal value to you – that’s your decision – it’s just not worth anything to anyone else. and while it would not surprise me if you could sell it on ebay, the value is for reasons other than its utility. after all, guys sell pdp-11 computers on ebay.
as to your comment about automobiles and obsolescence; i currently have a 10 year old honda accord. it is not the least bit obsolete: there are still many on the road so there is no difficulty in finding parts. the issue of backward compatibility that you mentioned is one reason why change in automobiles is generally quite slow. of course there is backward compatibility in computers as well; the difference is that in computer it is generally assumed that people don’t keep computers more than 5 years, so backward compatibility only goes back for 5 years, if that long. then the old computers become obsolete because they software makers stop making software that runs on them.
Sep 23rd, 2010 (4:27 pm)For some reason I can’t get posts to register.
Tagamet
Arrgh, so THIS ONE registers. (LOL). New thread is up.
Had the cartoon in my history vault.
Sep 23rd, 2010 (4:33 pm)automobiles today are a lot more complex than they were 40 or 50 years ago. today, they make heavy use of electronics. you would be surprised at the complexity of integrated circuits today. it is very difficult to reverse engineer electronics. i don’t know how complex the software is in the volt; while displays are relatively easy to reverse engineer, software the controls functions are more difficult to reverse engineer.
it would be a tall order to reverse engineer the volt without at least getting some access to gm ip (often by undercover means).
Sep 23rd, 2010 (4:34 pm)Suuuure, the US is all about “free trade”.
Until American corporations play the “National Security” card, then free trade goes out the window.
I wonder if China is calling its economic strategy “national security” ?
So how did this work out ?
http://www.chevron.com/annualreport/2007/financials/notestothefinancialstatements/note2.aspx
Note 2. Acquisition of Unocal Corporation
By an amazing coincidence, Condoleezza Rice headed Chevron’s committee on public policy until she resigned on January 15, 2001, to become National Security Advisor to President George W. Bush. Chevron, for unspecified reasons, honored Rice by naming an oil tanker Condoleezza Rice after her… She also served on the Board of Directors of Chevron.
http://en.wikipedia.org/wiki/Condoleezza_Rice
Sep 23rd, 2010 (4:40 pm)New thread? Where? Where? And where is the comment I just read linking an article which makes an exciting claim worthy of a new thread?
I hate it when Lyle does this …
+1
Sep 23rd, 2010 (6:09 pm)Sure they can buy up U.S. companies but do they want to pay what American’s make. NOT! Even today they are having trouble with raising wages in certain areas of their own country. As a result, whole factories are moved to where wages are lower. I don’t think your suggestion would work for them.
But that is what we should do – make them manufacture there products here in the U.S. It’s the only way to balance out trade and create the atmosphere needed to keep a country’s citizens employed.
In three days a new tariff on tires imported from China will go into effect. The rate, 35%, reminds me of the days when the original tariff rates applied to China before it was given most favored nation rates. Provo to Obama for having the guts to raise the tariff rate on Chinese tires!
http://www.washingtonpost.com/wp-dyn/content/article/2009/09/11/AR2009091103957.html
A lawyer representing the Chinese tire industry said, ” “Frankly, a temporary tariff is not going to get them to change their business plan.” in regard to U.S. manufactures moving production to low cost countries. Well, maybe they should consider moving their production back to the U.S.
The United States government should use some of the same tactics that other countries use. The tactic that China is threatening is not one that we can use since we believe a just system of trade. However, tariff rates should be raised to bring those governments that use unfair trade practices to the table to negotiate an equitable arrangement that protects the businesses and labor force of both countries. Until labor rates equalize all over the planet, the end to trade wars and trade imbalances will never end.
To end poverty, our trade policy allowed setting up factories in underdeveloped countries to manufacture products for resale in the United States with low tariff rates. This was a fine plan for ending poverty abroad but somehow the idea of lowering tariff rates across the board for everyone was believed to increase our export business. This was founded on the belief that our products were better than the foreign competition. Well that idea is passe. Many foreign products are very competitive. I am not proposing that we should increase tariff rates across the board but where-ever unfair trade practices are used to the detriment of U.S. manufacturers, rates should be raised.
Future administrations should also target various industries to rebuild the manufacturing bases for certain products.
Happy trails to you ’til we meet again.
+2
Sep 23rd, 2010 (6:20 pm)It may be that we need to decouple from doing business with them. They have systematically engaged in technology theft and depression of their own currency for the purposes of undermining manufacturers foreign to them. I don’t necessarily blame them, but why in the world would we allow it in our business transactions. Are we to stupid to see the end game here? – Fair trade would be one thing, but fair trade, this ain’t.
-1
Sep 23rd, 2010 (6:35 pm)Well, I’m not going to continue to engage someone who states that something is worthless and yet has value on eBay. I don’t deal well with circular logic.
I also doubt that Honda is still building 2001 Accords and re-labeling them as 2011s. Why did it change? Because it’s obsolete, deprecated, kaput, no longer in production.
Sep 23rd, 2010 (7:43 pm)In other news,
It’s a complicated question. Short answer–Money functions as both a medium of exchange, and a store of value. And the two roles often conflict.
The money “comes from” various governments who manipulate their money supplies for various reasons. The basic aim is a low sustained rates of inflation. (Deflation is worse than inflation, but hyperinflation is also really really bad.) It used to be backed by gold (and some other things), but that was basically to reassure the populace that the money had actual value. Which it does, as long as everyone else agrees that it does.
The major problem with China manipulating its currency is that it gives them a relative advantage. And it’s inflicting damage on basically every other economy in the world. They’re trying bleed as much demand as possible to shore up their economy.
-1
Sep 23rd, 2010 (8:11 pm)That is NOT why LG is building the blant in US. It just makes more economic sense given the weight of the batteries. That is why Nissan is building a 150,000 a year battery plant in TN.
Sep 23rd, 2010 (8:36 pm)Apparently the Chinese have asumed that Obama-like extortion and corruption are OK.
Their big mistake is assuming that there are any big secrets when it comes to hybrids.
The key to a better EV has nothing to do with anything GM has found out during its development of the Volt. It’s all in the battery technology. Once you have a good battery, ANYONE canbuild an OK electric car. That’s the beuaty of the technology – it’s so damned simple. They were building these things in acceptable fashion before WWI. People need to understand that the real outcome of EV
transportation is that the barriers that now exist to newcomers practically disappear. By far the biggest obstacles to new companies is the need to produce gas powered engines and transmissions. Those things go away, and with them the enormous advantage enjoyed by the mammoth carmakers who dominate today’s market. It has nothing to do with the technology being better. It’s all about design and manufacturing simplicity versus what we have today, with those incredibly complicated ICEs and auto trannies. Just take a look at the systems that do nothing more than provide the fuel to those guys.
Sep 23rd, 2010 (8:52 pm)China has been doing this for years. And getting away with it. This is nothing new. If a CEO has a choice been short term profit, and long term survival–they’ll usually go for the short term profit. Higher bonuses that way. And they’ll likely be retired before the Chinese clone drives the company out of business…
Sep 23rd, 2010 (9:14 pm)On that note–there’s one thing we’re apparently selling that many wealthy Chinese citizens are very interested in. Green cards. Through the Eb5 investor visa program. Minimum investment? 500k.
http://www.newsweek.com/2010/08/30/china-s-brain-drain.html
http://www.washingtonpost.com/wp-dyn/content/article/2010/01/09/AR2010010901056.html
Sep 23rd, 2010 (9:30 pm)Oh,oh Global Motors
+1
Sep 23rd, 2010 (9:52 pm)No problem–it’s the ‘in the red’ planet, after all. lol
Sep 23rd, 2010 (10:11 pm)Perhaps we should stop selling debt to Chna and try just selling green cards
But seriously, I know it would raise the cost of new debt but what would be the other ramifications of not directly selling debt to China?
Sep 23rd, 2010 (10:36 pm)As far as I’m concerned, the more the merrier with the EB5 visa. These are intelligent successful people who want to come here. And are willing to invest in this country to do so. Ideal immigrants, IMHO. In fact, I think we should make it easier than it currently is.
Assuming other countries didn’t come in and fill the gap? Because there are a lot of other countries eager to devalue against the dollar. Like, say, Japan, who’s version of the fed recently intervened and bought dollar. A number of individual Japanese have also bought dollars possibly at the request of the Bank of Japan. (All of which needs to be discouraged, IMHO. The dollar’s reserve currency status has cost us enough, IMHO.)
If the Chinese stopped buying our debt, they would have to let the renmimbi float. That would probably raise the cost of new debt in the long term. But in the short term–the Fed could step in and buy treasuries instead of sub-prime mortgages. Obviously, that’s not a permanent solution. But at the moment, we need inflation.
The main consequence would be a rise in the price of Chinese goods. Anything made in China would be more expensive for US consumers. Theoretically, at some point, for some goods, US production would step in and would be more competitive than it currently is because of economies of scale. But in the meantime, anyone wanting to buy a flat screened TV, a computer, or even an iphone would have to pay more.
Prices would probably also go up for things like fish, where we get the bulk of our consumption from China. Even though we still have a fish industry, when Chinese fish becomes more expensive, demand would increase for American fish. And it takes time for economies of scale to kick in.
Prices might also go up for other imports. Like oil. Again depending on the reaction of other countries. That would be bad for the US economy in the short run. But in the long run–it’s inevitable. So the sooner we start dealing with it, the easier it will be to adjust.
Sep 23rd, 2010 (11:08 pm)I forgot to add–there would also be margin squeezes for many US companies. That would mean that price would go up less than they otherwise would. But it would mean a reduction in the stock prices. And a decline in the value of many 401ks. And many pension funds would take losses, which would, in many cases, increase the liability of the taxpayers.
Sep 23rd, 2010 (11:48 pm)if japan wanted to strengthen the dollar against the yen such a strategy would be even more effective if they were bidding against china and other would-be purchasers of u.s. debt. there is certainly good reason for japan to want to weaken the yen in relation to the u.s.$ since the dollar has fallen in value by about 15% relative to the yen in the past 4 months.
but it is not a true statement that the rmb would necessarily float if they cut back on dollar purchases because the chinese central bank can generally counteract such float tendencies by selling more rmb’s on the currency markets. with the balance of trade deficit that the u.s. has with china, a weakening dollar would tend to mean that there would be a greater demand for rmb’s. so by selling additional rmb’s to meet the increased demand, the chinese central bank would still be able to counter the tendency for the rmb to strengthen against the u.s.$.
of course the most effective strategy for maintaining a relatively fine-grained control over the u.s.$/rmb exchange rate would be for the chinese central bank to both purchase treasury debt and sell rmb’s.
Sep 23rd, 2010 (11:56 pm)the margin squeeze is a byproduct of the relatively one-way nature of u.s. trade with china. if the trade were more balanced, u.s. companies would likely see increases in profits as a result the presumed increase revenues from sales to china due to the comparatively lower prices of american goods.
Sep 24th, 2010 (12:19 am)You can’t sell the renmimbi without selling it for something. And that something is usually some other currency. In this case, the dollar.
If China is going to sell the renmimbi, what they sell it for matters. If they buy yen, Japan will almost certainly buy dollars in order to negate the inevitable strengthening of the yen. If they buy Euros–I’m not sure what the EU will do. But they will complain. A lot. And, ultimately, they’ll probably do something about it much faster than the US did. They could buy commodities and other assets. But there are limits to that sort of thing.
They could, of course, simply print a lot of yuan. And spend it domestically. Etc. Which would drive the value down vs. the dollar. But they already have a major problem with inflation…And they’d have to print a LOT of yuan. There are still other tools they could use. But they have associated unintended consequences. And they generally aren’t as effective.
By the way, increased demand usually drives the price up, not down.
Sep 24th, 2010 (12:22 am)This is true. And some US companies might benefit from the increased markets enough to offset the decrease in margins. But China still has a lot of control over its domestic market. So I doubt strengthening the renmimbi would lead to a large increase in imports. Any more than the plaza accord substantially increased Japan’s imports.
Sep 24th, 2010 (12:23 am)The Chinese make no sense let the Americans have there jobs back! So the economy can flourish once again and as well make great products that have excellent quality so they can last for a very long time instead of letting the Chinese make copies in quantities with pure poor quality that we can’t take for granted because if we continue giving our businesses to the Chinese than our economy will be on the brink of falling to a collapse and we don’t want that do we? Everybody agree.
Sep 24th, 2010 (12:51 am)what i am saying is that exports of goods from china to the u.s. creates demand for rmb’s because the chinese seller is going to want payment in rmb’s and not u.s.$’s. so the u.s. purchaser is going to want rmb’s to pay for his goods (in practice this is typically cleared through the purchaser’s bank, but you get the idea). if the demand for rmb’s exceeds the supply, the price of the rmb relative to the u.s.$ will tend to increase. on the other hand, if the chinese central bank supplies additional rmb’s to meet demand, the rmb will have less tendency to float relative to the u.s.$.
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Sep 24th, 2010 (6:21 am)GM, Ford, & Chrysler cannot continue to ‘do business as usual’. The word has too many automakers and we ARE running out of petroleum (despite our best efforts to pretend otherwise). Car makers must transition to the 6.7 BILLION people reason$ to build solar and wind energy producing products. They have the needed infrastructure, supply stream, factory workers, sales facilities, and mechanics to install. This must be done on a ‘grand scale’ in order for America (and the world) to become free of fossil fuel dependency and thereby create a sustainable economy. Nearly every activity Americans engage in consumes fossil fueled energy. Yet, we continue our hedonist energy waste it as if it doesn’t matter. 100′s of millions of light burn unnecessarily , over heating, over cooling, and over driving are the norm in America. America wastes over 70% of the energy it consumes.
We are running out of time as we rapidly deplete the fossil fuel supply which is need for transition to renewable energy supplies. Failure to quickly transition away from our fossil fuel dependency will lead to the demise of humanity.
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FREE Alternative Energy Available NOW :
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Sep 24th, 2010 (5:25 pm)If the Chinese government wants access to technology, then we want a 25% tariff placed on all goods that enter the US from China. Sure this will cause inflation, but it will also create jobs here in the US and if you are smart you will take jobs over cheap goods all day long. If you don’t think China is taking US jobs just go to the store and try to buy 10 non grocery items, most will be made in China.
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Sep 25th, 2010 (8:00 pm)This will not work for me, China is trying to rule the world economically. We should not share any trade secrets with them under any circumstances. We should avoid buying Chinese goods. Support America, buy American!
Sep 29th, 2010 (12:20 am)Let the Communists get it the old fashioned way… through a spy network in the [decadent-capitalist-running-pig-dog] west of course!
Oct 1st, 2010 (12:37 pm)The easy solution to this is to just sell cars in China that are 10 years behind cars sold in the US. So when Honda comes out with a an extended range serial hybrid, they can sell them 2007 Prius vehicles. They will still be much better than SAIC but won’t be giving current tech away. It is just like when the US sells F-4 Phnatoms to other countries when the F-15 went into service. Now the US sells F-15′s and uses F-22 Raptors for themselves.