GM ‘Likely’ to Build in China as U.S. Factories Close

[Coventina]

Source: Bloomberg

April 20 (Bloomberg) -- General Motors Corp., shuttering U.S. plants in a bid to avoid bankruptcy, is “likely” to build a new factory in China on surging demand.

“Operations in China are profitable and in the future China can finance its own growth,” Nick Reilly, the company’s Asia-Pacific president, said at the Shanghai auto show today. He didn’t give a timeframe for the new plant.

GM, the biggest overseas automaker in China, boosted sales in the country 38 percent last month as government stimulus measures spurred demand for its minivans. By contrast, the company’s U.S. sales slumped 45 percent on the recession, as it battles to convince the U.S. government that it’s still viable.

The automaker has also delayed expansion of an Indian plant for as long as two years as sales growth there has slowed, Reilly said. The company will seek to turn around sales in Australia and South Korea, he added.



Read more: http://www.bloomberg.com/apps/news?pid=20601080&sid=aN4Brm9JM3_8&refer=asia

---

On edit: Why can't they build the cars here and ship them to China?

[mod mom]

1. We need tariffs to stop this from occurring!

:mad: They took taxpayer $, yet they are willing to ship American jobs overseas? Punish them for this action!

[Kittycat]

3. The cars are being sold in China - much like Honda's..

being built and sold here.

While I agree that I'm pissed about US workers losing jobs and I don't want them to use US funds to boost China plants. I don't see anything wrong with having a plant in China, for the Chinese.

...That said, I do think all Automakers in the US, should allow/become Union shops.

[high density]

7. Trade deficit

If the Chinese want black Buicks, we should build them here and ship them to China. It seems like it would be hard for any corporation to resist the move from "build them in China for the Chinese" to "build them in China for the Chinese and USA" like everything else.

[twitomy]

9. Building Cars in Country A and shipping to Country B

is not AS profitable as building them in the country they are sold. Witness Honda, Nissan, Mitsubishi, Mercedes, et al having plants in the US..

[Art_from_Ark]

28. Those Japanese car plants in America

were mainly the result of the Japan-bashing of the '80s, when the Japanese became so successful at selling Made in Japan cars (and other goods) in the United States that political pressure essentially forced them to make "voluntary cutbacks" of their exports and start building plants in the US to get around these "voluntary" export quotas.

[FreakinDJ]

32. Only ASSEMBLED in America

Complete Engine & Trans Assemblies (built in Asia) stuffed into chassis (built in Asia)......

[blue_onyx]

13. I believe China requires companies to build factories in their country

This topic (building here and shipping to China) came up during the our governors race in 2006. Mr. Amway (the GOP nominee) was criticized for sending US jobs to China. He said China requires companies to build there to sell product in their country.

[izquierdista]

16. Wouldn't work in the USA

Such a law (to sell it here, you have to build it here) would be condemned because it would "restrict free trade". Another advantage of building cars in China is that GM could just shrug their shoulders at the product liability lawsuits. :shrug:

[FreakinDJ]

33. As do most other Asian Countries

The only American products you find in the Philippines are from the American companies that have factories in the Philippines

[pampango]

6. If demand for GM cars is rising in China, why shouldn't they build cars there like the Japanese

have done in the US for the past few decades?

We could try to tell GM to ignore the Chinese market, but to ignore the popularity of their cars there will just make the company weaker and it is weak enough already. And if GM can't satisfy the demand for their cars there, I'm sure that Japanese or European car makers will be happy for the chance to grow some brand loyalty for their cars and eat into GM's popularity in China.

Cars will be made in and for China. The issue is whether any American company profits from it or we leave that money for the Japanese and Europeans and the Chinese themselves. I don't see how GM making some major money in China and sending it back to Detroit to invigorate their American facilities is a bad thing. Sure it would be nice for to reopen domestic manufacturing plants, but you make cars where people are buying them. Maybe profits from China will help them survive long to benefit from a pick up in domestic demand for cars, when that happens.

[OhioChick]

15. Damn straight. n/t

[Psephos]

20. So that other companies from other countries can build there instead

Brilliant

[leveymg]

2. Not if they want more federal bail-out money, they won't.

[msongs]

4. probably making cars in china for sale in china nt

[TechBear_Seattle]

5. This will help the US economy

Throw... how many thousands? ... of American workers out of work, and the US economy can only get better.


:wtf:

[WriteDown]

8. How many American workers want to move to China

to build cars for the Chinese market?

[Doremus]

10. As long as they don't bring them back here, and sell them there only, I don't have a problem with it

If they're trying to do an end run, using our money to finance the export of our own jobs, then hell no.

[dixiegrrrrl]

11. It wasn't GM so much that needed the bailout, folks.

It was GMAC, the finance arm of GM, that was leaking like a sieve as people with GM car loans were defaulting.
THAT is the back story few people read about.
What gave the "cover" story away was the fact GM also was building a plant
in Brazil at the same time it asked for the bailout.
Like many other former US companies, GM did not want to pay union wages and benefits, and it wanted to make the huge profits that other companies have been making by exporting jobs.

Google for GMAC news, as I have been doing...all the pieces fall together.

[diamidue]

18. Apart from eliminating union wages & benefits,

perhaps GM finds foreign tax laws less prohibitive?? Why pay American taxes if you don't have to. I think the days of believing certain corporations are "American" is over. It's all global now - no allegiance to anything except profits.

[twitomy]

22. Actaully Foreign Tax Laws ARE easier...

I know this from personal expereience. My brother is a higher up tax accountant for a billion + company. I asked him "Are you REALLY paying 35% tax rates the repubs say is one of the highest?" I asked this in light of the counter point to that argument that when the loopholes and tax breaks lower that 35% considerably. He said yes they DO pay 35% & up to 40% when state tax in factored in. He said as a result his job is to offshore as much income as possible; most notably Ireland which has a 12% corporate rate. He also says the Irish tax authorities work with the companies to try to lower their taxes as much as possible, whereas in the states, the govt grants a tax-break and the IRS does all they can to deny it..

[liberal N proud]

21. But they need to use the faltering GM thing for public opinion

They are trying to convince the public, and doing very well, that the unions must go and that the retirees must lose their benefits. Even though they worked all their lives for and have nothing else to back them up if they do lose them.

It was all PR.

[cagesoulman]

26. GM also was building a plant in Brazil at the same time it asked for the bailout?

And the public isn't told this?

:wtf:

[dixiegrrrrl]

27. Public was told, in the form of news stories, I read it in several sources.

[Deja Q]

12. SOme people have postulated GM bought Chinese parts for Americans to assemble.

So the trend is just expanding.

Will they continue to get money if this building occurs? I'd rather have my tax money being given to companies that keep good jobs here.

[Javaman]

14. If this wasn't so tragic, it would be down right

darkly comical.

So they declare bankruptcy only to reTOOL in china.

Cut overhead costs by using slave labor: check

Unions busted: check.

Mission accomplished.

[humblebum]

17. what has been allowed top happen in this country over the past 30 years

or so is nothing short of treason. We have stood back and watched as factories have been closed and production shipped to countries whose workers are paid slave wages and have no means to collectively bargain.It is virtually impossible to compete on that basis without compromising our own rights and we are certainly propping up governments that repress human rights and we are doing it in the name of profit.

[Vidar]

24. Very well put. Welcome to DU.

[jody]

19. Just one reason why I oppose using taxpayer dollars to bailout GM. n/t

[tammywammy]

23. Well that makes sense

They're building cars for the Chinese in China, much like Honda or Toyota building cars here for the American market.

[ohio2007]

25. Go on,take the money and run.nt

[Codeine]

29. As long as they're building cars for the Chinese who cares?

Honda and Toyota build cars here. The Toyota Corolla, Tacoma, and Matrix are even made by genuine UAW union labor in California.

[unkachuck]

30. '...is "likely" to build a new factory in China on surging demand...'

....have I got this straight?

....GM is taking our bailout tax dollars, busting the Union, destroying their contract and fucking the retirees so GM can build NEW auto plants in other parts of the world with Washingtons' blessing?

....if this is so, then the Obama administration is much more fucked-up than bushco ever was....

[Dyedinthewoolliberal]

31. In the immortal words of Gomer Pyle...

'surprise, surprise, surprise'

[Blue_Tires]

34. anyone who follows the industry knows that

this was GM's ultimate plan for the past several years; back even when the economy was still good...