SHANGHAI - The new Tundra, a Nextel Cup car, and now an American, Jim Press, on its board of directors. Big Three defenders are unimpressed with Toyota's considerable efforts to pass itself off as an American automaker. Meanwhile, General Motors is trying to become a Chinese automaker.
I got that distinct impression eight years ago, when I toured the GM/SAIC joint effort that builds Buicks for this new promised land of automotive marketing, a nation that is home to 900 million potential customers.
Now comes GM's CEO, Rick Wagoner, who says he's counting on China and India for his company's growth. As Toyota becomes the world's number one automaker in part because it's gaining on Ford Motor Company's sales in North America, GM could grab the first-place spot back by selling more cars in these emerging markets. This also means shifting production to some of those markets. GM has warned its Belgian plant, slated to build the Saturn Astra, that it had better cut costs. GM plans to shift production to the U.K., Germany, Sweden and Poland.
Since the Chevrolet Corvair, GM has failed to make money on small cars it sells in the U.S. But what if small Chevys and Saturns were built by Shanghai's GM workers, who cost the company $9 per hour including wages and benefits according to The Wall Street Journal, instead of American workers, who cost GM $60 in wages and benefits?
Paying North American workers to not build GM cars also costs money. But in the long run, it cost less money than building cars in the States. Shifting production to low-cost, generally non-union countries is GM's parry to Toyota's building cars and trucks in non-union plants in places like Kentucky and Texas.
Efforts on Capitol Hill to raise Corporate Average Fuel Economy Averages to 35 mpg and more will just spur GM's shift. The rear-drive Buick and Cadillac DTS may be on hold in North America, but Buick is showing its version of the rear-drive Holden Statesman, called Park Avenue, at the Shanghai show here on Friday.
Bottom line is that it's a global market, and automakers are moving to where they can find relatively cheap labor - in the U.S. for Toyota, in China, India and Poland for GM. It's going to be harder to call GM an American company in the coming years if you still scoff at Toyota's efforts to be considered such.
Thats right, but the difference is that Toyota can do it almost anywhere, while GM will HAVE to go to CHINA if it wants to be competitive. This is a GLOBAL economy and will only get bigger, the point here is that its pretty ignorant for consumers to discriminate companies based on what country their GLOBAL Headquarters are located.
This may be a short-term solution to keep the "American" car companies afloat, but in the long run the Global economy will force wages to equalize and balance out, at which point, only the strong will survive (i.e. the companies that have worked to be competitive, instead of running away to China for a short term fix for short-term profit)
so now GM is gonna build cars in china and ship it back here? GM needs to realize its not who what where the car is built, but how. they can go anywhere and if they still use the same production practices then quality issues will still exist. the problem with them is they focus way too much on costs
so now GM is gonna build cars in china and ship it back here? GM needs to realize its not who what where the car is built, but how. they can go anywhere and if they still use the same production practices then quality issues will still exist. the problem with them is they focus way too much on costs
Their problem is ALL about costs. It's tough to focus on costs too much. Until they rid themselves of the albatross we know asa the UAW, there's not much else they CAN do other than move manufacturing elsewhere.
Thats right, but the difference is that Toyota can do it almost anywhere, while GM will HAVE to go to CHINA if it wants to be competitive. This is a GLOBAL economy and will only get bigger, the point here is that its pretty ignorant for consumers to discriminate companies based on what country their GLOBAL Headquarters are located.
This may be a short-term solution to keep the "American" car companies afloat, but in the long run the Global economy will force wages to equalize and balance out, at which point, only the strong will survive (i.e. the companies that have worked to be competitive, instead of running away to China for a short term fix for short-term profit)
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