Caution- Chinese Vettes on the Horizon!
11-18-2008, 09:16 PM
#1
Melting Slicks
Thread Starter
Caution- Chinese Vettes on the Horizon!
Chinese Automakers May Buy GM and Chrysler
By Bertel Schmitt
November 18, 2008 - 22,776 views
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. And why would they do that?
A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.
At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.
21st Century Business Herald, obviously with input from higher-up, writes that Chinese industry must change and upgrade. China wants their factories to change from low-value-added manufacturing to technically innovative and financially-sound high-value-add industries. Says the paper: “It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.”
Deloitte & Touche sees a trend: “Chinese automakers can start with buying out the OEM projects and Chinese ventures of some global carmakers such as GM and Chrysler.”
The Chinese appear to have bigger plans than an accounting firm can imagine. 21st Century Business Herald acts and writes as if its already a done deal, and the beginning of more to come. “In the coming two years China is likely to see a few of its large Chinese automakers and other manufacturing enterprises set a precedent for achieving globalization by acquiring global companies, just like SAIC or Dongfeng’s possible acquisition of troubled GM or Chrysler.”
Just in case you missed it, the Shanghai Automotive Industry Corporation (SAIC) is China’s largest auto manufacturer. In 1984, the company entered a joint venture with Volkswagen. A decade later, SAIC entered a joint venture with General Motors. In 2007, SAIC bought the Nanjing Automobile Corporation, which had acquired British MG Rover in 2005.
Dongfeng Motor Corporation is a public company, although 70 percent of their shares are reported to be in government hands. They also are one of China’s Big Three. The company has numerous joint venture partners, such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which means “East Wind”) was founded at the behest of Mao Zedong himself in 1968.
By Bertel Schmitt
November 18, 2008 - 22,776 views
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. And why would they do that?
A take-over of a large overseas auto maker would fit perfectly into China’s plans. As reported before, China has realized that its export chances are slim without unfettered access to foreign technology. The brand cachet of Chinese cars abroad is, shall we say, challenged. The Chinese could easily export Made-in-China VWs, Toyotas, Buicks. If their joint venture partner would let them. The solution: Buy the joint venture partner. Especially, when he’s in deep trouble.
At current market valuations (GM is worth less than Mattel) the Chinese government can afford to buy GM with petty cash. Even a hundred billion $ would barely dent China’s more than $2t in currency reserves. For nobody in the world would buying GM and (while they are at it) Chrysler make more sense than for the Chinese. Overlap? What overlap? They would gain instant access to the world’s markets with accepted brands, and proven technology.
21st Century Business Herald, obviously with input from higher-up, writes that Chinese industry must change and upgrade. China wants their factories to change from low-value-added manufacturing to technically innovative and financially-sound high-value-add industries. Says the paper: “It would be much easier now for strong Chinese automakers to go global by acquiring some assets of their U.S. counterparts in times of crisis.”
Deloitte & Touche sees a trend: “Chinese automakers can start with buying out the OEM projects and Chinese ventures of some global carmakers such as GM and Chrysler.”
The Chinese appear to have bigger plans than an accounting firm can imagine. 21st Century Business Herald acts and writes as if its already a done deal, and the beginning of more to come. “In the coming two years China is likely to see a few of its large Chinese automakers and other manufacturing enterprises set a precedent for achieving globalization by acquiring global companies, just like SAIC or Dongfeng’s possible acquisition of troubled GM or Chrysler.”
Just in case you missed it, the Shanghai Automotive Industry Corporation (SAIC) is China’s largest auto manufacturer. In 1984, the company entered a joint venture with Volkswagen. A decade later, SAIC entered a joint venture with General Motors. In 2007, SAIC bought the Nanjing Automobile Corporation, which had acquired British MG Rover in 2005.
Dongfeng Motor Corporation is a public company, although 70 percent of their shares are reported to be in government hands. They also are one of China’s Big Three. The company has numerous joint venture partners, such as Nissan, Peugeot-Citroen, Honda, and Kia. Dongfeng (which means “East Wind”) was founded at the behest of Mao Zedong himself in 1968.
11-18-2008, 10:04 PM
#3
Le Mans Master
That's GREAT NEWS!!!
I can finally pick-up a new ZR-1 at Harbor Freight.
Fastest regards,
Oli
I can finally pick-up a new ZR-1 at Harbor Freight.
Fastest regards,
Oli
11-18-2008, 10:39 PM
#5
Instructor
I'm the last guy to advocate a government bailout but the US cannot allow this to happen.
It's a national security issue.
This totally changed my thinking...
This past weekend, I was watching a documentary on WWII. I may be off on the years but they said in 1941 3 million cars were built. After that until the war's end only 139 cars were built. EVERYTHING was switched over to war material.
We cannot sell what's left of our manufacturing base to the Chinese.
It's a national security issue.
This totally changed my thinking...
This past weekend, I was watching a documentary on WWII. I may be off on the years but they said in 1941 3 million cars were built. After that until the war's end only 139 cars were built. EVERYTHING was switched over to war material.
We cannot sell what's left of our manufacturing base to the Chinese.
11-18-2008, 11:24 PM
#6
Melting Slicks
11-18-2008, 11:40 PM
#7
Melting Slicks
I'm the last guy to advocate a government bailout but the US cannot allow this to happen.
It's a national security issue.
This totally changed my thinking...
This past weekend, I was watching a documentary on WWII. I may be off on the years but they said in 1941 3 million cars were built. After that until the war's end only 139 cars were built. EVERYTHING was switched over to war material.
We cannot sell what's left of our manufacturing base to the Chinese.
It's a national security issue.
This totally changed my thinking...
This past weekend, I was watching a documentary on WWII. I may be off on the years but they said in 1941 3 million cars were built. After that until the war's end only 139 cars were built. EVERYTHING was switched over to war material.
We cannot sell what's left of our manufacturing base to the Chinese.
11-19-2008, 12:25 AM
#8
Burning Brakes
Why isn't everyone happy ? Wallmart can start selling cars!
Last edited by dagon138; 11-19-2008 at 12:32 AM.
11-19-2008, 05:21 AM
#9
Team Owner
11-19-2008, 05:36 AM
#10
Team Owner
Wednesday, November 19, 2008
Auto collapse would ripple across country
Ron French, Rob Snell and Alisa Priddle / The Detroit News
Twenty-seven states would lose more than 10,000 jobs each if the domestic U.S. auto industry collapses, with triple that number of jobs likely lost when including parts suppliers, internal documents from the carmakers show.
While the traditional Midwest manufacturing states would be by far the hardest hit, an analysis by The Detroit News of data obtained from General Motors Corp., Ford Motor Co. and Chrysler LLC paint a grim portrait of the economic tidal wave that could spread across the country if Detroit's Big Three don't survive their current financial woes.
CEOs of the automakers and the president of the United Auto Workers received a skeptical reception in Washington on Tuesday from lawmakers who will decide whether to provide a proposed $25 billion bailout to the industry. Yet the home states of the majority of those congressmen would suffer debilitating job losses if Michigan's automakers are allowed to go under.
Advertisement
Connecticut, home of Sen. Chris Dodd, who gave automakers a tongue-lashing Tuesday, has 7,330 residents who work for GM, Ford or Chrysler, either for the companies themselves or for dealerships, according to The News' analysis. Another estimated 14,000 are employed in auto parts manufacturing. There are roughly two auto parts workers for every Big Three employee, according to David Cole, chairman of the Center for Automotive Research in Ann Arbor.
Ford has 34 auto parts suppliers in Connecticut, for example; Chrysler has 37, and GM has 211.
While the automakers are often portrayed as a Michigan industry, more than half the states, ranging from the Atlantic to the Pacific and from the borders of Mexico and Canada, would lose more than 10,000 direct auto company and dealer jobs if the Big Three go under; with suppliers added, the number is likely to be more than 30,000 jobs in each of those states.
"People don't realize the economic impact (of the auto industry)," Cole said. "Many of these companies are invisible in their communities. An electronics plant in California may make parts for numerous products, but their main customer may be the automakers. If the automakers are allowed to go under, suppliers lay off workers."
Ford, for example, pumped $3.7 billion into the Kentucky economy in 2007 through purchases from suppliers in that state, according to a document obtained by the News from Ford. Alabama manufacturers got $2 billion from Ford; North Carolina, $771 million; Tennessee, $914 million.
A doomsday scenario would put 157,000 Michigan residents currently employed by the Big Three out of work, plus an estimated 300,000 more who work for auto suppliers.
That's more than 10 percent of Michigan's work force, even before spin-off jobs are considered.
While the impact of an auto industry collapse would be harshest on Michigan, every state would be scarred.
The Midwest would suffer the most. Ohio would lose 59,446 direct jobs, not including auto suppliers; Illinois, 39,115; Indiana, 36,126; Wisconsin, 23,111.
Other big losers would include Missouri and Florida, both with 30,000 direct auto jobs; New York with 33,000, Pennsylvania with 36,000 and Texas with 53,000.
While the number of auto supply workers tied to each automaker isn't known, the number of supply companies is: GM has 1,169 suppliers in Illinois alone; 1,535 in Ohio; and 966 in New York. GM even has five suppliers in Hawaii.
Job losses at the automakers and auto suppliers would lead to others, according to a study conducted by Cole's organization, which conducts research for the car industry.
A report released earlier this month estimated that nearly 3 million jobs would be lost in the United States in the first year after GM, Ford and Chrysler ceased to exist, with $60 billion lost in tax revenue.
Chrysler alone paid $167 million in taxes to the state of Michigan in 2007; $15 million to Ohio and Missouri; $5 million to Delaware.
Charities in states across the nation would be caught up in the economic tsunami of an auto industry collapse. General Motors contributed $7 million to Michigan charities in 2007, and more than $1 million in both New York and Pennsylvania.
"If you let this thing get away from you, the consequences are enormous," Cole said.
You can reach Ron French at (313) 222-2175.
Auto collapse would ripple across country
Ron French, Rob Snell and Alisa Priddle / The Detroit News
Twenty-seven states would lose more than 10,000 jobs each if the domestic U.S. auto industry collapses, with triple that number of jobs likely lost when including parts suppliers, internal documents from the carmakers show.
While the traditional Midwest manufacturing states would be by far the hardest hit, an analysis by The Detroit News of data obtained from General Motors Corp., Ford Motor Co. and Chrysler LLC paint a grim portrait of the economic tidal wave that could spread across the country if Detroit's Big Three don't survive their current financial woes.
CEOs of the automakers and the president of the United Auto Workers received a skeptical reception in Washington on Tuesday from lawmakers who will decide whether to provide a proposed $25 billion bailout to the industry. Yet the home states of the majority of those congressmen would suffer debilitating job losses if Michigan's automakers are allowed to go under.
Advertisement
Connecticut, home of Sen. Chris Dodd, who gave automakers a tongue-lashing Tuesday, has 7,330 residents who work for GM, Ford or Chrysler, either for the companies themselves or for dealerships, according to The News' analysis. Another estimated 14,000 are employed in auto parts manufacturing. There are roughly two auto parts workers for every Big Three employee, according to David Cole, chairman of the Center for Automotive Research in Ann Arbor.
Ford has 34 auto parts suppliers in Connecticut, for example; Chrysler has 37, and GM has 211.
While the automakers are often portrayed as a Michigan industry, more than half the states, ranging from the Atlantic to the Pacific and from the borders of Mexico and Canada, would lose more than 10,000 direct auto company and dealer jobs if the Big Three go under; with suppliers added, the number is likely to be more than 30,000 jobs in each of those states.
"People don't realize the economic impact (of the auto industry)," Cole said. "Many of these companies are invisible in their communities. An electronics plant in California may make parts for numerous products, but their main customer may be the automakers. If the automakers are allowed to go under, suppliers lay off workers."
Ford, for example, pumped $3.7 billion into the Kentucky economy in 2007 through purchases from suppliers in that state, according to a document obtained by the News from Ford. Alabama manufacturers got $2 billion from Ford; North Carolina, $771 million; Tennessee, $914 million.
A doomsday scenario would put 157,000 Michigan residents currently employed by the Big Three out of work, plus an estimated 300,000 more who work for auto suppliers.
That's more than 10 percent of Michigan's work force, even before spin-off jobs are considered.
While the impact of an auto industry collapse would be harshest on Michigan, every state would be scarred.
The Midwest would suffer the most. Ohio would lose 59,446 direct jobs, not including auto suppliers; Illinois, 39,115; Indiana, 36,126; Wisconsin, 23,111.
Other big losers would include Missouri and Florida, both with 30,000 direct auto jobs; New York with 33,000, Pennsylvania with 36,000 and Texas with 53,000.
While the number of auto supply workers tied to each automaker isn't known, the number of supply companies is: GM has 1,169 suppliers in Illinois alone; 1,535 in Ohio; and 966 in New York. GM even has five suppliers in Hawaii.
Job losses at the automakers and auto suppliers would lead to others, according to a study conducted by Cole's organization, which conducts research for the car industry.
A report released earlier this month estimated that nearly 3 million jobs would be lost in the United States in the first year after GM, Ford and Chrysler ceased to exist, with $60 billion lost in tax revenue.
Chrysler alone paid $167 million in taxes to the state of Michigan in 2007; $15 million to Ohio and Missouri; $5 million to Delaware.
Charities in states across the nation would be caught up in the economic tsunami of an auto industry collapse. General Motors contributed $7 million to Michigan charities in 2007, and more than $1 million in both New York and Pennsylvania.
"If you let this thing get away from you, the consequences are enormous," Cole said.
You can reach Ron French at (313) 222-2175.
11-19-2008, 10:25 AM
#12
Melting Slicks
Thread Starter
11-19-2008, 10:46 AM
#13
Melting Slicks
There is probably nothing any of us can do about this runaway trend, but be assured this is NO joke. I'm gald I'm an old guy.
Jim
11-19-2008, 12:03 PM
#14
Melting Slicks
Member Since: Jun 2002
Location: Charleston South Carolina
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There's no reason I need a 4500 lb hunk of metal to get me to and from work. I'd use a motorcycle, but I want something a little more stable. Yes I know it won't be as safe, but I don't need a nanny state to watch over me if I'm willing to wave the safety standards. They allow motorcycles, why not lightweight cars that provide little protection too?
The business model needs to change. Then the Chinese will own all the buggy whip companies.
Last edited by TedDBere; 11-19-2008 at 12:06 PM.
11-19-2008, 12:48 PM
#15
Vetteless
Member Since: Jul 2004
Location: Gallatin TN
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St. Jude Donor '09
All we need to do is to suspend some of the highway safety standards and new car companies will spring up around the country, all getting nearly 100 mpg.
There's no reason I need a 4500 lb hunk of metal to get me to and from work. I'd use a motorcycle, but I want something a little more stable. Yes I know it won't be as safe, but I don't need a nanny state to watch over me if I'm willing to wave the safety standards. They allow motorcycles, why not lightweight cars that provide little protection too?
The business model needs to change. Then the Chinese will own all the buggy whip companies.
There's no reason I need a 4500 lb hunk of metal to get me to and from work. I'd use a motorcycle, but I want something a little more stable. Yes I know it won't be as safe, but I don't need a nanny state to watch over me if I'm willing to wave the safety standards. They allow motorcycles, why not lightweight cars that provide little protection too?
The business model needs to change. Then the Chinese will own all the buggy whip companies.
11-19-2008, 02:16 PM
#17
Race Director
All we need to do is to suspend some of the highway safety standards and new car companies will spring up around the country, all getting nearly 100 mpg.
There's no reason I need a 4500 lb hunk of metal to get me to and from work. I'd use a motorcycle, but I want something a little more stable. Yes I know it won't be as safe, but I don't need a nanny state to watch over me if I'm willing to wave the safety standards. They allow motorcycles, why not lightweight cars that provide little protection too?
The business model needs to change. Then the Chinese will own all the buggy whip companies.
There's no reason I need a 4500 lb hunk of metal to get me to and from work. I'd use a motorcycle, but I want something a little more stable. Yes I know it won't be as safe, but I don't need a nanny state to watch over me if I'm willing to wave the safety standards. They allow motorcycles, why not lightweight cars that provide little protection too?
The business model needs to change. Then the Chinese will own all the buggy whip companies.
11-19-2008, 03:25 PM
#18
Former Vendor
I don't think it's a joke, but I knew you would be pissed off after seeing this. My personal thoughts is the other major countries are in their industrial mega boom right now. Like we (USA) have been in the past. They will share the same headaches that we have, they are just behide us. One of these days their workers and law makers will wake up and slap them with the same type of crap we live by. The US is doing the same thing they are, opening up shops in other places then their homeland. GM just got done with a different plant in Russia. Do you think they are make 50 bucks a hour working there? Or have the same benefits we have? Or is 50 bucks an hour too much to pay a US worker for assembly? I personally think 40-50 an hour is too much (sorry guys) but 25 an hour seems to be working well for Honda and others. This standard of living (pay vs cost of living) will vary for region, state, city or even parts of cities. When a company runs a business they have to live by the same standards as the other businesses in that area. Because of laws, and/or what will make people work there. Sure Japan and others will not let us in, so we look else were to open plants, Mexico, Canada land, Russia, Europe and etc. Is it a good idea to build products in other countries, no, but it works to keep the cost lower and profits up. Them not paying taxes in our country is pretty much BS.
We had a suit show up here at the shop asking about different issues and what our views were. He said a ton of guys are coming up from Mexico to work, as we all know. I told him to tax the hell out of them, like they do everyone else. Then the average guy can still make money roofing.
China for an example, is now a huge exporter of goods not just to the US but all around the world you will find their label. But in time with their mass population grow and using up their resources at alarming rates, they will become a huge importer. They are becoming more westernized, which means they need stuff. I don't know when this conversion will take place, but I hope the US will be able to provide and make some money off of them.
Randy
PS The biggest disgrace is all the talks about selling off the companies, talk about no backbone or confidence
11-19-2008, 04:26 PM
#19
Le Mans Master
All we need to do is to suspend some of the highway safety standards and new car companies will spring up around the country, all getting nearly 100 mpg.
There's no reason I need a 4500 lb hunk of metal to get me to and from work. I'd use a motorcycle, but I want something a little more stable. Yes I know it won't be as safe, but I don't need a nanny state to watch over me if I'm willing to wave the safety standards. They allow motorcycles, why not lightweight cars that provide little protection too?
The business model needs to change. Then the Chinese will own all the buggy whip companies.
There's no reason I need a 4500 lb hunk of metal to get me to and from work. I'd use a motorcycle, but I want something a little more stable. Yes I know it won't be as safe, but I don't need a nanny state to watch over me if I'm willing to wave the safety standards. They allow motorcycles, why not lightweight cars that provide little protection too?
The business model needs to change. Then the Chinese will own all the buggy whip companies.
It is scary when the technology and capacity can be bought by a foreign power. So when do they bid for Boeing?
11-19-2008, 04:26 PM
#20
If that happens, you can buy a half dozen of them in case a few break at the track.
I've been thinking about this... I wonder if China deliberately stopped importing to pop the commodities bubble. They just fell off the map after the Olympics. I've been eyeballing some dry shipping stocks and can't believe how far and how fast they have fallen. DRYS was trading at a $100 a share less than 6 months ago and today it's trading in the $5's.