As thousands of General Motors workers await word on more U.S. plant closures, reports that the company plans to import Chinese-made vehicles to the U.S. have created a political problem for the automaker and the White House.These auto companies are utterly clueless. I happened to pick this example, but the others are doing the same thing. Who in their right mind thinks that the US will be importing cars from overseas in the future, let alone China? Years ago, Japanese car manufacturers found that it was cheaper to produce their cars here in the US than to continue shipping them from Japan. Now Honda's and Nissan's and such are produced here in the USA. Why? Japan became a wealthy nation, and it didn't make sense to employ its citizens to make cars to ship overseas. The profit wasn't there. America is about to become a poorer nation. The wage differential will greatly diminish. On top of that, shipping costs will no doubt rise as energy prices increase over time. Its going to become an expensive proposition to ship things all over the globe, especially heavy, unwieldy objects like cars. Every other industry outsourced throughout the last two decades to take advantage of lower wages abroad, cheap oil, and Asian mercantilism, let's not forget. Now they are finding their cost advantages evaporating. This trend is likely to continue as the US dollar loses its advantages over foreign currencies, particularly the Asian currencies, which even now are enormously undervalued thanks to years of mercantilist policies and increased productivity. As outsourcing is finally beginning to unwind, the big three auto companies now think its a good idea to go overseas. If they want to open a plant in China to sell to the Chinese, this is probably a reasonable thing to do. China is a growing market, and the Chinese probably won't be buying cars imported from the US. But to think that GM can sustainably produce cars in China and sell them for profit in the US is utterly foolish.
The reports, which GM will neither confirm nor deny, could mean trouble because GM is supported by $15.4 billion in U.S. government loans, largely due to the Obama administration's desire to preserve the company's 90,000 U.S. jobs.
The United Auto Workers charged last week that the Detroit automaker intends to almost double over the next five years the number of vehicles it imports to the U.S. from Mexico, South Korea, China and Japan.
"GM should not be taking taxpayers' money simply to finance the outsourcing of jobs to other countries," Alan Reuther, the union's Washington lobbyist, wrote in a letter to U.S. lawmakers.
Thursday, May 14, 2009
Yet Another Abysmally Stupid Idea From GM
Importing cars from China? That's the rumor: