Chinese carmakers SAIC and Dongfeng have plans to acquire GM and Chrysler, China’s 21st Century Business Herald reports today. [A National Enquirer the paper is not. It is one of China’s leading business newspapers, with a daily readership over three million.] The paper cites a senior official of China’s Ministry of Industry and Information Technology– the state regulator of China’s auto industry– who dropped the hint that “the auto manufacturing giants in China, such as Shanghai Automotive Industry Corporation (SAIC) and Dongfeng Motor Corporation, have the capability and intention to buy some assets of the two crisis-plagued American automakers.” These hints are very often followed with quick action in the Middle Kingdom. The hints were dropped just a few days after the same Chinese government gave its auto makers the go-ahead to invest abroad.
Hmmm… if this happens, would the bailout/loan still happen?
Thanks to McCullough.
three million out of a billion people, compared to the nation Enquirer…
They are acquiring some assets, meaning the money making parts while leaving the unions to deal with the pensions.
Sounds like a no brainer to me. It’l piss off a lot of NASCAR fans. At least the ones left who stuck around after TOYOTA was let in.
China takes over the world.
Will they also take over GM’s multi-billion $$ pension and health-care obligations?
Never happen. But China practically owns us anyway.
This is the main reason I don’t see America falling into an economic abyss. We have too many things that foreigners want and are able to buy. We probably won’t fall into a depression, but we will own much less of our own country.
Wake me up when everyone is speaking Chinese, thanks.
GM and Chrysler won’t be around, gone, unless this happens. Quite frankly, those HQs need to be relocated outside the USA, it’s the only way to stop the failure train.
#7 – Sargasso – Don’t be such a pessimist. Are you saying there is not a single American that can run a car company?
On the one hand, it may be good. China merely picks up another ‘manufacturing sector’, big whoop.
On the other hand, China may pick up and own what may arguably an immensely important and strategic industry in next generation battery operated transport industry.
Be careful what we wish for.
Why stay in a country with much higher corp taxes & cap gains tax.
China has lower corp tax & 0% Cap gains tax.
China wants businesses, the U.S. Gov’t doesn’t.
Not rocket science. Simple market forces.
I’ve said this before, China is a better Capitalist society than America. Their society views good businessmen like rockstars, and their government views business as their partner and friend.
Not like here in America where we view businesses like the enemy and businessmen like crooks. Where we make the exception the rule and act like everyone is Enron.
How else could it be that a country we laughed at 20 years ago is eating our lunch?
#8. Aaahem (politely clearing my keyboard’s throat), my dear fellow, I would not presume to imply or to impugn that there aren’t many fine CEOs in your great and gracious land. They just don’t live in Detroit.
#1 “three million out of a billion people, compared to the nation Enquirer…”
It’s a Business News paper not a General News newspaper so it’s not target to a billion people.
“Be careful what we wish for.”
We already have what big corporations (including the automakers) and wall street wished for – the outsourcing of manufacturing for short term gains. Ford-Mazda, GM-Saab, etc.
It will take forever and great pain to get on our feet without doing manufacturing here. Only manufacturing employees large numbers of people at decent wages.
The one factor that will increase wealth without inflation is manufacturing. America used to have factories, until the owners moved them overseas to make bigger profits.
When we mine an ore and turn it into a useful product, we have created a durable wealth. Selling that product overseas only increases our wealth. That is sustainability to a high degree.
Continually buying products from another country and depending upon non-wealth creating service jobs is unsustainable, and will create inflation.
A strong sustainable economy is dependent upon how much wealth we can create for most of our citizens. It is weakened by concentrating wealth in the hands of a few, at the expense of most. Not one recession or depression we have ever had has been caused by the manufacturing sector. Not one! Every one has been caused by the service sectors, especially the financial sector, putting artificial values on artificial creations until the bubble bursts.
It bears repeating. For growth to be sustaining, it must be durable – that means manufacturing things.
That a communist country has to save our behinds is proof how wrong the right wing free market zealots where, and still are.
Wow, GM and Chrysler may actually start producing quality cars. This could be great for America.
#14 I generally agree with you. I also feel the US needs to place greater emphasis on manufacturing durable products here in the US for growth, stability and to an extent – economic security.
The other issue is that while the world is ‘flat’ from an economic sense, the Chinese do not play fair game. They are and will provide preference to their own for critical technologies like batteries and the like.
The only industry which the US government appears to want to ‘protect’ is high tech. Even so, that industry already has one foot in Beijing.
False hope is better than no hope at all — and that is about all we (the USA) have.
We need to insure that our school systems start teaching kids to say “Do you want fries with that?” in Chinese.
Maybe the “unknown” Obama will provide the leadership that we have been lacking for so many, many years.
Correct me if I’m wrong, but didn’t the money for that economic stimulus package come from China? Now this!?!?
Sophocles said it best – Nought from the Greeks towards me hath sped well. So now I find that ancient proverb true, Foes’ gifts are no gifts: profit bring they none.
Hopefully someone will have the common sense left to avoid the sale of one of the last great american industries. On the other hand this could be a carefully prepared strategy to pump up support for a detroit bailout – I wonder how much a chinese reporter costs, pretty cheap I’ll bet.
11,
Are you joking? The US panders to large corporations at every turn. Where have you been for the last 20 years? Why ELSE do you think that US corps get TAX BREAKS for sending jobs overseas? Because that’s what the voters want? China has cheap labour. LOTS AND LOTS of cheap labour. That and poisonous products.
#12 – sargasso – not American evidently… pandering to patriotism obviously won’t be very effective!!
Actually this isn’t based on the country. It’s the markets. No one invests for the long term anymore. I include foreign investments as well. Everyone wants to hit the lottery.
Had a CEO suggested 5 years ago it would be wise to spend millions on small, efficient and reliable cars just in case of a rainy day down the road, they would have been ousted rather quickly.
Everyone (but me) has been shortsighted. Like we really needed Lincoln and Cadillac pickups.
19, that may be true for some of the really huge corps, but for the majority of them, the middle and smaller ones. The US has pretty much raped them with taxes. 10, made a good point. Why would you stay in a country that hates you and penalizes you constantly when you can go to a place like China which actually acts like they want corps to put their HQ’s their.
Coming soon the all new 2009 Shanghai Impala and Dongfeng Grand Marquis! ;(
Something must’ve happened and now … we are a vassal of China.
Har! We’re China’s bitch!
Toyota seems to do just fine here in the US. Sure, they are geared towards producing smaller vehicles but it shows automakers can succeed in this economy. The industry’s main issue is globalization. It is cheaper to build overseas and cars are not so technologically dynamic that they have to be produced in country. Unions have their place, but the $71/hour cost per worker at the big three is not reasonable nor sustainable. If these workers want to keep the jobs here, they will need to concede on pay/benefits. Toyota’s $47/hour is a good wage and benefit rate, and is low enough to compete with foreign wage scales.
As much as people like to think manufacturing is the key for economic health, innovation and adaptability is what brings about wealth. That is why the US protects high tech. All industries have a life span and American wealth is built on the early to middle stages. The auto industry is entering the late stage. Textiles used to be produced in the US, but now you would be hard pressed to find clothing produced in the US. Building cars will meet the same fate (hopefully later than sooner). The US needs to prepare itself for adapting to the ever-changing economy. As a part of economic strategy, schools should be blunt about where our future lies and what careers kids should be aspiring towards. That is not to say the US will have no heavy industry in the future. It is just to say that if you are looking for job security, building cars would not be the wisest choice.
If the deal becomes a reality I sure hope the Chinese will screw up the UAW.
#28 – Angel H. Wong
I think the UAW pretty much screwed themselves. Or maybe it’s just us smart folks here that understood the union (and the management that agreed) took more than was viable.
Union leadership is just as bad as corporate management. Power and money are the only objectives.
(coming from a former CWA member)
The U.S. doesn’t want a thriving business sector. Many within the federal government, as well as PAC’s, are all too willing to allow the U.S. to be owned by foreign countries. When we’re all living in bondage to foreign regimes, don’t forget that I was the one who told you so. Remember, it was FDR that said, “Nothing in politics, (or government for that matter), happens by chance”. This is strictly by DESIGN.
# 27 Bruno said, “Toyota seems to do just fine here in the US.”
Gee, they aren’t based in the US, don’t pay the same corp rate & don’t have the CRUSHING union commitments…