On Tuesday GM’s CEO Dan Akerson explained why the company could very well build the Volt in China, as it is the hot new frontier in which GM is already well positioned to reap a harvest.
For now, GM will ship the Volt in from the U.S., Akerson told the press at a Bloomberg News forum, but it could be a costly experiment as the Volt is ineligible for over $19,000 in government incentives as GM tests the Chinese waters.
“We’re going to export into China for probably a year or two and see if it gets a take … if customers set the right usage patterns,” Akerson said. “If it does, we may manufacture it there.”
A Volt on the road to Shanghai.
Akerson denied allegations that China has pressured GM to fork over intellectual property and said it is making these decisions all by itself.
The new automotive market paradigm GM envisions is a more collaborative one, as evidenced by GM’s recent big plans to build EVs in China with joint venture partner SAIC, and its formation of its venture capital firm last year charged with finding new opportunities and given $100 million in seed money to do it.
“We don’t invent everything ourselves,” Akerson said, explaining GM’s new perspective. “We either build, buy or we partner.”
And to be sure, this partnering phenomenon has quickly become the new pattern for several major and minor industry participants, with more collaborations expected.
China is Hot, America is not
In the next decade, Akerson said, the Chinese auto market growth could equal the total sales in the U.S. market. That is, auto sales in China could increase by 13 million vehicles, he said, which is on par with the present U.S. total.
“This is where you want to be strong,” Akerson said.
And really, GM has been playing this strategy already. Last year its China sales were up 30 percent. This year, according to the Detroit News, they are only up by 5.4 percent through August, comprised of 1.6 million vehicles sold.
To get things back toward 2010 growth levels and beyond, GM intends to invest between $5 and $7 billion over the next five years in China as it introduces 60 new or significantly refreshed models, the Detroit News reports.
The goal of GM’s five-year plan in China is to bump total annual sales there to 5 million vehicles.
While a five-year plan sounds like something the Communists would come up with, make no mistake, this is fully in line with ideals born in The Land of the Free, and Home of the Brave.
In thinking as it is, GM is also being true to its shareholders, many of which saw GM’s strong Chinese market position as a reason after its bankruptcy to add their dollars toward the New GM’s record-breaking $23 billion initial public offering.
What’s more, JPMorgan Chase & Co. Vice Chairman James “Jimmy” Lee – who helped GM launch its IPO – told the Detroit News that GM’s strength in China was a key factor in drawing not just U.S., but international investor interest.
“When we sat down with investors worldwide, they were really excited with respect to China” and GM’s strengths, Lee said.
Inherent in GM’s decision making process is a lack of faith in the American economy to be anywhere near as promising as China’s.
In contrast to a Chinese auto market that is booming, Akerson said he believed the U.S. market will be “flat” next year, although GM’s September sales – expected to be announced Monday – were still “not that bad.”
Presently the U.S. Treasury Department holds a 26.5 percent share in GM. Akerson praised the Treasury for staying hands off, and not sending a representative to sit in on board meetings – including the most recent one held in China.
But whether or not the government sits in on meetings, it and the taxpayers it represents are still along for the ride. At GM’s current stock price, if the Treasury sold its stake now, it would mean a loss of about $16 billion out of its $49.5 billion committed for the bailout.
In front of a sundial in Shanghai.
The government has expressed interest in shedding its GM holding, but not at such a loss.
Unknown is whether its leaving GM free of interference represents tacit approval of GM’s policy.
As it is, Akerson outlined plans for investing in China for the company that is yet one-quarter owned by U.S. taxpayers, and defended the U.S. Treasury Department loans as not merely saving a company, but rescuing an industry.
Speaking of which, in the heyday of that industry in the early 50s, it was said that “what was good for the country was good for General Motors and vice versa,” and perhaps GM would still contend that what it is doing is for the greater good.
Today there are fewer people inclined to see the clarity of such assertions as billions in technology, manufacturing know-how and jobs are going offshore at a time when the U.S. needs all the help it can get.
To be sure, GM is also making efforts to invest in U.S. manufacturing, but this could arguably be called enlightened self interest too, as sourcing and producing close to the point of consumption can be good for business.
The Volt in China
For now, the Volt will not be produced close to its point of Chinese consumption, thus its value proposition will be reduced without subsidies available for domestically produced EVs.
Certainly there are those in China with the disposable income to pay up for one of the world’s most advanced automobiles, but selling it in larger numbers will require some adjustments to put the Volt in a more attractive position.
Aaron Bragman, an IHS Automotive analyst told the Detroit News building the Volt in China could “make sense.” Assuming subsidies, GM could make significant money with the Volt in a burgeoning Chinese market heavily favoring electrified vehicles.
GM could conceivably also export Chinese made Volts to other markets.
Since setting up shop in China a decade ago, GM has kept (at least some) of its intellectual property safe, and actual risks to the Volt are open to speculation – although with the prospect of building the Volt there already on the table, GM is apparently not too worried about it.
Even more clear at this point, however, is the siren song of a bright and promising new market being sung by China. It is one that GM finds irresistible and undoubtedly it will do what it takes to succeed there, as Bragman also observed.
“If you want to participate in the Chinese market, you have to play by their rules,” Bragman said.
This entry was posted on Thursday, September 29th, 2011 at 5:55 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.
+14
Sep 29th, 2011 (6:14 am)There is a lot I would like to say in regard to this post. Will keep it positive. I own a Made In America Volt and am happy with it.
=D-Volt
+4
Sep 29th, 2011 (8:04 am)It is very reassuring that China has not asked for intellectual property from GM. That whole issue has been a red herring.
So this makes it no different than building Toyotas or Hondas in the US or Amperas in Europe.
What is important is that the Volts and other GM products built in China are not exported back to North America. Also sourcing of a large majority of parts for manufacturing in the US should be local.
The US Treasury will get its money back, all it has to do is wait for GM shares to rise enough in value. This will be happen sooner if GM continues on its path to increase sales in China. This is a great reversal of the normal pattern of one-way trade where US citizens purchase made in China without any return in kind.
+27
Sep 29th, 2011 (8:54 am)Both Japan and China don’t offer incentives for EV’s made in other countries but sold locally, but the USA does.
Who’s right? And, who’s protective of their own labor markets? It’s hard to have free trade with countries who don’t honor the same.
+18
Sep 29th, 2011 (9:47 am)“If you want to participate in the Chinese market, you have to play by their rules,” Bragman said
So why doesnt the US do the same. We continue to get pissed on by china,japan,and south korea when it come to the car business. THis has been going on for decades.Nothing ever changes.
+9
Sep 29th, 2011 (10:32 am)We put ourselves at a terrible disadvantage when competing with other countries. We subsidize their products with our own money. China forces companies to share their intellectual property and goes even further with their own form of protective trade. We really need to wake up our officials by replacing them with people that understand business. There is no free trade.
Hawk
+3
Sep 29th, 2011 (10:37 am)OT – Fox Car Report – The Chevy Volt – One Year Later
http://www.foxnews.com/leisure/2011/09/29/chevy-volt-one-year-later/?test=faces
+8
Sep 29th, 2011 (10:55 am)China, Japan, Korea, and every other socialist or communist country has central planning. The US currently does not. We have anti-central planning because our government agencies are too powerful and work in silos like dysfunctional older companies.
The EPA, for one, just does it’s own thing without regard for consequences. There are policies in place, IRS is a good one, that cause (heck, even forces) companies to offshore their main business/manufacturing. Our energy and health care policies are so scrambled that there is no policy or direction. DoT is so messed up with ancient regs that I’m surprised there is an auto industry at all. FCC and FAA move so slowly that newer technologies are delayed for decades.
These agencies need their budgets cut and their scope limited. A lot of these entities need to disappear all together or their function privatized. In some cases, these powers should be returned to the States.
+5
Sep 29th, 2011 (11:32 am)We worry about the lack of legal rights, the lack of human rights in China, and rightly so. Their provocative and ambitious military is disconcerting. The politics are crude.
So America and China will have issues with each other for a long time to come.
But there is one thing: hard work. There is virtue in hard work, sacrifice, and saving for the future and investing in your own education. To me, that gives China a somewhat positive glow.
Contrasted with say, Russia. I look at Russia and I don’t see resurgent neocommunism. All I see from Russia is vodka-ism. Not so with China.
So countries relying on petrodollars as cheap geopolitical power and free money, such as Russia, Venezuela, Arabia/Middle East, and Iran, shall face decline, IMHO.
The future will be prosperous for the hard workers: Japan, China, the Asian “dragons”, Aus/NZ, India, Israel, Eastern Europe, Northern Europe, parts of S. America, and, yes, America/Canada….
The rest will either undergo painful change or languish in misery for a long time.
+4
Sep 29th, 2011 (12:10 pm)“If you want to participate in the Chinese market, you have to play by their rules,” Bragman said.
————————–
If that’s the case, then we need to change our rules to match their rules.
+16
Sep 29th, 2011 (12:14 pm)As political as yesterday’s subject was – I was hoping for a nice, happy light subject today… Since that didn’t happen, I’ll just post this nice photo of a Topaz Blue Metallic Volt, perhaps the first one – surely the only one we know of – first posted yesterday by wainair in gm-volt forums.
What do you think of the new color?
VOLT, IT’S MORE FREEDOM THAN ELECTRIC! ,
James
+2
Sep 29th, 2011 (12:24 pm)“If you want to participate in the Chinese market, you have to play by their rules,” Bragman said.
When you have an unchallenged product like the Volt you make your own rules.
Does anyone smell a bribe baking?
NPNS!
Volt#671
+6
Sep 29th, 2011 (12:30 pm)If I understand this right, China is good because it has central planning but the US is bad because it has ineffective central planning. If this is correct, then the correct course would be to EXPAND the powers not to restrict them.
But somehow I get the feeling that all the problems are somehow the fault of misguided government agencies is simply right wing drivel unsupported by any actual facts. Let’s take your EPA example. Of course you know that Congress has told the EPA to regulate CO2 emissions. And of course you know that the Supreme Court has ordered the EPA to implement regulations to that effect. Now, and please explain this to me, can you conclude that the EPA doing “it’s own thing without regard for consequences”?
Or take your IRS example, which is even more ridiculous. Yes tax policy disadvantages US manufacturing companies. And you know what would cure this? If you don’t I’ll tell you. It’s something called the value added tax or VAT. And the reason why not having a VAT disadvantages US manufacturing is that when foreign companies sell here they don’t have to pay VAT but when we sell there our manufacturers have to pay income tax if they repatriate the money. IOW competing with countries that use VAT when you’re using an income tax is like trying to play four on five in basketball. And you are telling us that the problem isn’t that Congress doesn’t implement VAT but that the problem is that the IRS hasn’t just implemented VAT on its own rather than implementing the law as written by Congress?
You can’t possibly be serious.
Sep 29th, 2011 (12:56 pm)It isn’t only GM looking to China for opportunity. Any corporation seeking to provide a service or product while maximizing benefit for it’s shareholders is remiss to ignore it. It is not some vast Whatever-Wing Conspiracy which has made China hot and the USA not; and no, it isn’t a failure to make the American economy come under more centralized control:
http://www.myfoxboston.com/dpp/news/national/coca-cola-chief-criticizes-us-tax-rules-20110929
http://www.npr.org/blogs/thetwo-way/2011/09/27/140847430/coca-cola-chief-u-s-becoming-less-business-friendly-than-china
You could say that it is a vast Political Class Conspiracy; but in fact, it’s our responsibility to spur our “public servants.” If business cannot be carried out in America as well as in Communist China, what does that tell us? Which side of our toast should we be buttering?
+4
Sep 29th, 2011 (12:56 pm)I see racial bigotry is alive and well. Interesting that few of the areas you’ve identified as “hard working” have native people with dark skin. As a point of fact, I’ve spent plenty of time in China, and some in Japan, and I can tell you categorically that people living in West Africa work just as hard or even harder.
The biggest difference between countries that do well and those that don’t is how effective the government is. We have a very effective government. Liberia doesn’t. Or to use your example of China, is this the same China whose economy DECLINED by 30% between 1958 and 1970? Were the Chinese suddenly transformed from slothful lazy human beings into energetic and industrious workers, or did this have something to do with the “Great Leap Forward” and the “Destroy the Four Olds” initiative?
Do me a favor and keep your racist nonsense to yourself.
+2
Sep 29th, 2011 (1:02 pm)He’s absolutely right as a matter of policy. But do you understand that what’s he advocating is a national sales tax and the abolition of the capital gains tax rate?
+1
Sep 29th, 2011 (1:03 pm)I don’t understand how this works;
So if we did have central planning, which we do not, the agencies that would implement it are so powerful that they block the central planning that we don’t have, that we will use to coordinate our efforts to compete with communist countries, even though we don’t use that planning because we don’t even have that planning? Which is being blocked by the agencies because they are anti planning and are so powerfully anti planning they are blocking planning which does not exist?
Sorry, it took me a while to edit that
+3
Sep 29th, 2011 (1:05 pm)“Racist! Racist!” The last rhetorical refuge of scoundrels. Why not defend your point of view with persuasive arguments?
+2
Sep 29th, 2011 (1:12 pm)Dude, that made my head hurt.
+1
Sep 29th, 2011 (1:16 pm)I’m gonna go have a latte, better yet is it too early for cap’n jacks old standby, more bang for the buck with coffee and Kahlua!
+1
Sep 29th, 2011 (1:23 pm)A Volt on the road to Shanghai.
Look at the air there (a strange phrase in itself). Once the ICE turns on and runs exhaust past the cat converter, the air is probably cleaner than it was when it went in. Too bad there won’t be more Volts in China for a while. For a lot of good reasons.
-1
Sep 29th, 2011 (1:24 pm)Cap’n Jack dropped by yesterday, but he may not be back for awhile.
He can’t stand this political $#|+.
+6
Sep 29th, 2011 (1:26 pm)One thing lacking, I think, in our kids’ schools is some kind of “importance initiative” that shouts at them “you kids must dig down and plan for your future”. Something that can dissolve some of their distractions and have them consider the future their own and not just freely handed to them by parents and governments. It’s almost like kids feel like they are victims and just have to go along for the ride.
Something like a generational morals/responsibility candor class. Learn hard-knocks early and when it hits you later, you’re ready for it.
I want to see lines of 10,000 people clamoring to get into a University. And not trying to get picked for American Idol.
As a grade school kid, I went to a small private school which actually had a cadet program. Not ROTC like you would see in college, just a minor bit of character building and guidance from a retired Army Major. Anyway, it taught the kids a lot to go through those teachings in what were really minor military trainings. Our kids of today would never put up with even the slightest bit of that training today. I loved it and it gave many of us boys some strength that we can use all through life.
+1
Sep 29th, 2011 (1:38 pm)#10 James So how do you like the new color?
My wife really likes it! So I said “I will get started on the order;” not being serious. Well she said “OK”; not being serious. So off the top of my head I calculate: 40,000+approx. 1900 for Nav/Bose gotta have + upgraded leather not sure1200+ sales tax and blab la bla= approx. 47000- 7500 if we can get a temporary loan for that= 39500- 5000 down-payment= 34500 to finance@ 5 yrs. I don’t know what kind of payments that would be 600-650? But I don’t think I can talk her into that and leasing is out of the ?. I’m thinking that not that many Volts would be bought in China without subsidies. Actually if China really wants the Volt, they will accommodate GM; we should not try to push the Volt on their market JMO.
+2
Sep 29th, 2011 (1:42 pm)While I fully understand that GM has a legitimate business interest in manufacturing the Volt in China, I believe that the temptation to export them back to the US will become overwhelming. It is an imperative at every level to lower the Volt’s costs, and side-stepping US labor could come to be seen as the primary method.
Would anyone at GM care to address this concern? Does anybody at GM still read this site?
It’s possible that only one model would be built in China, say the MPV5; it and the original Volt would get shipped back and forth as needed: This would only serve to sugarcoat a process which short-circuits American automaking leadership and recovery, IMO.
-5
Sep 29th, 2011 (1:50 pm)this statement is incorrect and, i suspect, is typically of the kinds of statements that get made on this forum based on incomplete and/or incorrect information. the reason why the “cash for clunkers” program could not be limited to purchases of american-made cars is because such a provision would be in violation of gatt. if an incentive is offered on ev’s in japan and china it would have to be based on something other than the mere fact of whether the car was or was not produced domestically.
Sep 29th, 2011 (2:03 pm)34500 @ 5% financing over 5 years is 651$ a month. Minus 150$ or so a month in savings on fuel (+electricity – gas), you’re looking at 500$ a month. Affordable.
+2
Sep 29th, 2011 (2:03 pm)I read this a $7500 in tax credits for the Leaf will not be offered for any American EV in Japan. Pretty much until the end of…forever.
+1
Sep 29th, 2011 (2:15 pm)I was going to go the opposite way, and say they all need to get on the same page with common goals, and leave the politics at the door.
+3
Sep 29th, 2011 (2:21 pm)I think a National Sales Tax (Specifically, the Fair Tax) is a pretty darned good idea; especially as a replacement for Income and Capital Gains taxes.
I favor the Fair Tax for it’s “prebate;” a monthly payment to all individual tax payers (based on government figures already generated) for the amount of sales tax which would be paid for the basic necessities of life during that month. Those with low incomes would effectively pay no tax at all. This mitigates the “regressive” aspect of a sales tax. (Yes, the wealthy would get it too; but this is the (small) cost of having a simplified tax which treats everyone the same. Our current complex tax codes, endlessly game-able for the wealthy, are far more expensive; not just in terms of lost revenue, but in costs to implement).
The lack of Income Tax, particularly, closes a lot of loopholes for the rich: there is no tax code to game. Everyone pays the sales tax rate when wealth is consumed, and that’s it. “Millionaires and Billionaires” wouldn’t pay income or capital gains, but they will by God pay sales tax on that new mega-yacht or jet. They’ll end up paying more, but they won’t be singled out to do it: the Fair Tax treats everyone exactly the same.
In addition, with no Income Tax say good bye to tax shelters, audits, the considerable costs of compliance (tax preparation and accounting), withholding, business decisions based mainly on the tax consequences of any action, tax lobbyists, etc.
One of the reasons we see US Corporations doing what GM is seeking to do in China is that business at home is crippled by ever-increasing tax (and other) regulation, while monies acquired overseas cannot be repatriated without huge taxation. The result is that foreign profit tends to get reinvested offshore, not at home where it helps the economy. The lack of Capital Gains taxes would return to our shores not only departed American investment, but increasing foreign investment. The result would be a flourishing environment for business and economic growth.
In case you think these are bad things, I’d suggest to you that what we need isn’t more taxes, but more tax payers. In a Country where business can afford to expand, there will be more jobs, less public assistance and a bigger pie overall. With a broader tax base, the total amount of government funding will be far greater, even at lower rates. To demand more and more from ever fewer taxpayers is to squeeze the lemon dry; so that no one gets any lemonade.
Or do you think that taxation has a mission beyond the raising of government revenue?
+2
Sep 29th, 2011 (2:22 pm)I’ve spent time in all the countries you’ve mentioned and many more (except the middle east ones). One thing I’ve learned is people are people. Some work hard, some don’t. You can’t stereotype countries/races. If you want some statistics, South Korea technically has the longest working day at 10hrs avg. Does that mean they are more productive or harding working? I don’t know. Some of the “hardest workers” ive personally seen are in Mexico. It was 10 guys working 16 hour days, but not using the proper techniques or tools. So 3 correctly trained guys w/the right equipment could have done the job much quicker.
+1
Sep 29th, 2011 (2:23 pm)exactly.
+1
Sep 29th, 2011 (2:28 pm)Speaking of “tit for tat”, when’s the last time you guys have been to South America? Have you been exposed to the reciprocity fee yet? I first saw it in 2004 & 2006 going to Brazil. Because I was American, and Americans charge $131 for Brazilians to come to the US, they were charging a reciprocity fee of $131, just for Americans. I was somewhat pissed, but what are you going to do, fly back home? Then the rest of South America got on the band-wagon and when I went to Chile & Argentina last winter, they both charged $131 reciprocity fees. I like the fact they dont even hide what it is with some BS name. They just call it a reciprocity fee.
So, why doesn’t the US do this in regards to international trade commerce? We could force the Chinese to partner with US companies and build the products here, or pay a reciprocity fee of 25%. If they don’t open shop here, soon domestic companies would realize it would be more economical to produce the parts in the US, and we would see more domestic manufacturing.
Sep 29th, 2011 (2:29 pm)I’m totally serious. Our government is dysfunctional. They can’t even agree on paying bills that are already in flight.
There are too many people working on the same issues from different directions. No leadership. No planning. No execution.
And I’m not laying all this on Obama. It’s been going on for generations. 2008 finally opened up the can-o-worms that is our government.
-1
Sep 29th, 2011 (2:34 pm)#8
I don’t see where we have any room to talk on either subject. I don’t see the Chinese invading anybody, or operating hundreds of bases around the world in other people’s countries. And the political rhetoric going on in our country currently gives new meaning to the word “crude” IMHO.
“Judge not, lest ye be judged” -1, and I don’t do it very often.
+2
Sep 29th, 2011 (2:36 pm)The original cash for clunkers in Japan was for domestic vehicles only. The US had to complain until they finally changed it for all cars. It was pretty much a waste anyway because Japan is such a closed market they barely let foreign cars (from any countries) in as it is.
http://content.usatoday.com/communities/ondeadline/post/2009/12/us-cars-excluded-from-japans-cash-for-clunkers-program-/1
http://www.usatoday.com/money/autos/2010-01-19-cash-for-clunkers-japan-cars_N.htm
Sep 29th, 2011 (2:36 pm)#10
Meh. Makes my white look good IMHO. All a matter of taste though, I would hasten to add.
Sep 29th, 2011 (2:42 pm)As well you should hasten to add. I love the blue color.
+2
Sep 29th, 2011 (2:43 pm)#13
Do you want to trade your standard of living and quality of life for those of a Chinese worker?
Take another look at #20
+2
Sep 29th, 2011 (2:46 pm)The difference is, wether you give the technology over or not, you still have to parnter with a Chinese company. We do not require foreign companies to do this in the US.
Sep 29th, 2011 (2:47 pm)#37
Well he asked, LOL.
+1
Sep 29th, 2011 (2:56 pm)Fortunately, there are more than these two specific choices, lol.
Your implied cause-and-effect is murkier than that photo. Are you actually suggesting that we can’t compete with China without becoming as polluted? That’s a pretty negative viewpoint. “Business friendliness” has no direct connection I can think of with air pollution — unless you find that all business stinks.
Nor should we accept Chinese wages. There is oh-so-much room for improvement in the areas of business-crippling US regulations, lack of leadership, and economic strangulation by policy. I expect the gap between our countries can be greatly reduced long before we’re breathing mud on $20 a week.
Try reading #29.
Sep 29th, 2011 (3:12 pm)#41
And you don’t see that as code for get rid of or cripple the EPA, the Clean Air Act, the Clean Water Act, the National Environmental Policy Act, and the Endangered Species Act, just for a start? Not to mention all of the onerous regulations on poor struggling Wall Street?
-1
Sep 29th, 2011 (3:14 pm)#41
I tried, I really did, but it gave me such a splitting headache I had to give up.
-1
Sep 29th, 2011 (3:29 pm)wto trade agreements are a matter of law. matters of law require closer reading than is typically done by the casual reader. let’s take your first usatoday reference for example. i gather your casual reading of the article led you to believe that the japanese “cash for clunkers” program was crafted to block us-made automobiles. however, a closer reading of the article was show that the article included the critical statement that detroit has no cars that “meet strict Japanese fuel economy rules“. that requirement would provide japan with a basis, *other* than source of national origin, for excluding automobiles.
just to let you know, btw, the u.s. is not a completely open market to import cars. there are a number of vehicles that you will see in other countries that are not allowed into the u.s. market because of u.s. regulatory requirements. this is allowable under wto trade agreements.
so the moral of the story is that international trade is complicated stuff and superficial talking points that you may extract from some story that you read almost certainly will not give you sufficient information upon which to draw the kinds of conclusions that i often see posted here.
+2
Sep 29th, 2011 (3:29 pm)We need a culture which maintains a reasonable quality of life while not destroying those who make that culture possible. In a single word, balance. There are legitimate needs for those programs, but not at the expense of those they’re meant to protect.
If you’re going to automatically take the most extreme view possible (reacting against an opposite extreme), you’re left only with a white-knuckle determination to fight “the enemy;” and no real solutions. No, I don’t see this as “code” for some nefarious conspiracy.
Nor am I talking about Wall Street, you are. I’m talking about the many thousands of small businesses in this country who are being squeezed out of existence by regulation surrounding Obama Care, and his seeming determination to zero-in on the middle class as a target for economic and class warfare (There are other increasing regulatory restraints as well, of course; but those two are the most publicly visible at the moment). This isn’t evil Wall Street or faceless Billionaires, it’s Mom and Pop down the street with maybe a dozen employees, and little companies with maybe fifty. Business on this scale produces the majority of jobs in this Country.
Punishing those who take risks to succeed is the road to National ruin. America is suffering from an auto-immune disease; eating it’s own strength for dubious political ends. What we need to return to is — balance.
Well, I think we’re just going to have to agree to disagree then.
Sep 29th, 2011 (3:36 pm)Good article Michael. I guess fox isn’t wrong all the time.
I liked:
“My dad, a former teamster and truck salesman who drives a Mercury Marquis by choice, was pretty smitten by the Volt.”
Sep 29th, 2011 (3:43 pm)Here’s a quote from the webchat the other day. Im still trying to find the quote where Akerson said something like technology developed in China could be used in the US. I remember that one because it scared me a bit.
———————————-
Comment From Scott B.
How will the battery R&D work done at the new GM China Advanced Technical Center in Shanghai impact/coordinate with the efforts here at GM NA?
Bill Wallace:
Scott, the China Battery R&D Center, which opened last week, is tightly linked with our battery lab here in Warren. The lab here will remain the hub of our battery research and we will now be able to collaborate with our China team to do additional research on technologies that may be available in that part of the world.
————————-
+3
Sep 29th, 2011 (3:55 pm)So you don’t think Japan is a purposely designed closed market in order to keep competition out? I don’t care really about how they rig their laws or regulations, or deflate their currency, the end result/goal is to keep out competition. I think that is the moral of the story.
-1
Sep 29th, 2011 (4:01 pm)i think you have identified the root of the problem; you look at the result and conclude that the result proves that there has been a violation of trade law. however, what you apparently believe is not the way that trade law actually works.
+1
Sep 29th, 2011 (4:29 pm)You share knowledge with the Chinese at your peril.
They steal your IP and build a much cheaper version in direct competition.
This is a very bad idea.
+2
Sep 29th, 2011 (4:42 pm)So all of this hub-bub from the US goverment and US coporations about trade inequalities is just noise? Even though they pay lawyers thousands of dollars to analyse the trade laws, and have concluded they are unfair or not being followed, we should just ignore that?
What exactly did Japan change (law-wise) that suddenly allowed US cars to be a part of the cash for clunkers? If it was always that way, then they wouldn’t have had to change anything, right? Why does the US constantly seek probes and file lawsuits with the WTO about China’s shady practices?
The trade laws, like any laws, can be set up to provide guidelines, but that doesn’t mean people/coporations/governments don’t bend or break them constantly. Everyone is not as honest you believe they are, and there is no “world police”.
+1
Sep 29th, 2011 (4:49 pm)no comment,
Here’s a good read for you.
“How Japan has Maintained The Most Protected
and Closed Auto Market In the Industrialized World”
by the American Automotive Policy Council
http://www.americanautocouncil.org/default_files/Japan's%20Protected%20Auto%20Market.pdf
+1
Sep 29th, 2011 (5:26 pm)I think all American cars should be available in Red, White and Blue. It’s nice, but, I prefer the Diamond White Tri-Coat.
Normally, I like blue, but, it hasn’t been long enough since my last blue car. Ya can’t go with blue every time!
Sep 29th, 2011 (5:31 pm)It was too political for me to post this morning, and I see it has not improved much during the day……………..
I will wait for tomorrow’s thread!
Sep 29th, 2011 (6:01 pm)Well, that’s convenient.
Sep 29th, 2011 (6:17 pm)It’s Democracy. Same complaint for nearly 235 years. It’s messy because to do anything big requires consensus. And even with consensus some people will fight to the death over what is nearly universally seen as a good thing. Just another day with the top ripped off of the worms. Nothing new here.
That’s why now and then someone runs for office and gets popular saying I’m going to run government in a businesslike manner. Business = deciding on a vision, convincing the troops to move forward, and sometimes firing the ones who don’t.
There’s no equivalent process with citizens, or congressmen. Unless you want to try deciding on a vision, and if people don’t follow it, tape their mouths shut. Leadership would be a lot stronger if people got letters from their representatives stating, sir I’m firing you as a citizen – please indicate your new country of origin and place it in the enclosed envelope. But that’s what the Constitution is designed to protect against. The first amendment pretty much says, even if you’re currently off of your meds, publish your craziest rant ever, no problem.
Sep 29th, 2011 (6:44 pm)#45
I operate a business with19 employees, and I don’t find any of that to be true. Urban/political legend IMHO.
Sep 29th, 2011 (6:48 pm)#53
Aha, a person of taste and discernment surfaces. +1
Sep 29th, 2011 (7:27 pm)Just as a NON political comment,
I just am not that crazy about the new blue…..but, so what, no one is forcing me to order it. I am anxious to see the other colors in person though. hopefully the dealer will have cars in those colors when we go for our test drive!!
+1
Sep 29th, 2011 (7:30 pm)Loboc??????
Sep 29th, 2011 (7:43 pm)I remember reading about a Doctorate candidate that wrote his thesis on the Japanese Culture Government/Corporations. I think the Japanese taught the world how to suck money out of the US while maintaining a closed market… a win win for those countries… a lose lose for the US and we are now seeing the effects.
To me it is total stupidity that we give Japanese German Korean car makers $7500 per electric car while they put huge tariffs on any car we try to sell in their markets…. it’s stupidity and Tyranny.
Our government’s duty is to support Americans and that includes American companies… it has been doing nothing to help or protect American industry for 30 years.
-12
Sep 29th, 2011 (7:49 pm)(click to show comment)
Sep 29th, 2011 (9:01 pm)Loboc,
Just kidding of course.
+1
Sep 29th, 2011 (9:11 pm)Not sure why so many have rating this up – but this is factually wrong. Tesla Roadster gets bigger incentives (since the incentives are based on the price) than Nissan Leaf in Japan.
Sep 29th, 2011 (9:20 pm)I believe that foreign companies take advantage of tax and trade loopholes that were created for American companies. So they incorporate an American version of their brand (remember the American Honda?), promise to create local jobs, prevent unions from entering the workforce so they can pay less, produce some vehicles, and sell them locally only. They make millions out of innocent buyers, and fill up their foreign bank accounts while taking every tax break they can to pay less tax than the normal American business.
That is what I expect to see happening for the “American” Leaf in Tennessee.
They don’t allow American companies to do the same in their countries. So it is another win-win for them!
America will suffer a crash again before 2029, and will never recover!!
Raymond
+1
Sep 29th, 2011 (11:59 pm)evnow: Tesla Roadster gets bigger incentives (since the incentives are based on the price) than Nissan Leaf in Japan.
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And who bought a 50 million stake (for starters) in Tesla right before they got the Japanese incentives…. Toyota.
Sep 30th, 2011 (12:25 am)Ray, for and economist you are one heck of an engineer
Yes we are being taken advantage of. It’s part of starting out as the most advantaged after WWII, putting the worlds economies back together via Bretton Woods for a time and achieving hegemony. It’s about time to build a level playing field though.
-2
Sep 30th, 2011 (1:00 am)there is, however a “world trade organization” and there are procedures under which disputes of trade law get resolved. but you need more than allegations and stuff that you just “read somewhere”; you actually have to be able to *prove* stuff.
all that said, even though there is a trade law regime in place, there are many loopholes. to your point about “honesty”, this may surprise you but in reality, notwithstanding the existence of international trade law, it is ultimately an “honor system” to a significant degree. so as a practical matter you still see a role for bilateral negotiations as opposed to going to the wto to resolve disputes.
where i come down in all of this is that rather than lob misinformed allegations at other nations the more pressing thing for this country to do is to develop a domestic industrial policy. that, in my opinion, will go a lot farther than most of the other ideas that i see posted. but the failure to develop a domestic industrial policy for the u.s. is a failing of the american political system. you can see some of the problems in the postings here; you got the libertarian nonsense posted by teabaggers like jackson and loboc who apparently don’t see much of a role for the federal goverment (other than law enforcement, national defense and judiciary). i suspect that the teabagger solution is that the u.s. institute protectionism; of course, what the teabaggers fail to realize is that other countries would likely retalliate. another thing that the teabaggers fail to realize is that such a scenario of trade wars played out in the 1930′s and the desire to prevent a repeat was one of the motivations for establishing gatt in the first place.
Sep 30th, 2011 (1:49 am)My my my… I think you’re just a teensy weensy bit off-base… lol.
My harshest remark was about Russia, for goodness sake (vodka-ism) !
Are Russians dark skinned?
Good point about W. Africa. Here is a good essay about the lack of wealth in Haiti, inspired by an episode of Anthony Bourdain’s No Reservations:
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http://mises.org/daily/5277/When-Capital-Is-Nowhere-in-View
“Where is the wealth? There is plenty of trade, plenty of doing, plenty of exchange and money changing hands. Why does the place remain desperately poor? If the market economists are correct that trade and commerce are the key to wealth, and there is plenty of both here, why is wealth not happening?”
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IMHO, the politics are crude in China because information is restricted, and so it stunts the political culture of China.
Being in California reminds one that the Chinese are (were) hard workers. E.g. the transcontinental railroad, gold mining and all that… (Not the intercontinental railroad, Mr. President)
+1
Sep 30th, 2011 (8:31 am)I think the US would fair well in a trade war. We are by far the biggest consumers in the world, and currently have trade deficits with most countries. Maybe a trade war is not what we need, but a trade battle. Something to reset the system.
+1
Sep 30th, 2011 (11:38 am)no comment,
Japan did it ,their cash for clunkers ruled out ALL FOREIGN made cars,how the worded it is unimportant.
Sep 30th, 2011 (1:06 pm)don’t put too much faith in bravado talking points; the united states is a large economy but it is not a self-sustaining one – a trade war would have absolutely *crippling* effects on the domestic economy and on the world economy in general – that’s why nobody wants one.
Sep 30th, 2011 (3:34 pm)I didn’t say it wouldn’t be crippling, but it would be much less crippling for us than other countries. And they know this. That’s why a bluff, or a “trade battle” as I coined, could work to reset the system and even the playing field.
Sep 30th, 2011 (4:52 pm)a global trade war would be globally destabilizing. you can’t have something like that happen without *substantial* blowback, which would be beyond the ability of this country to control. the last time that happened in the 1930′s, it ended in military conflict. that’s not the kind of “reset” that anyone sane is ever going to want to consider.
Sep 30th, 2011 (6:30 pm)Roy_H,
Get real. You have no idea how Chinese government operates. GM said what it had to say.