By on December 3, 2006

cov_gm3_120106222.jpgGM’s investment in The People’s Republic of China presents two main dangers. First, it extends GM’s supply chain over an enormous distance. Second, it enmeshes The General in the economy of a non-democratic country. Frank Williams has already raised the alarm over the possibility of Chinese nationalization. We’ve also highlighted the chances of de facto nationalization; based on western automakers’ [mandatory] partners’ history of stealing Western designs and technology. In all this, we shouldn’t ignore the fact that GM’s money is propping up a communist dictatorship.

Make no mistake: GM’s Chinese operations depend on the country’s virtually endless supply of cheap labor, which depends entirely on government policy. In theory, all Chinese workers belong to the Communist party-controlled All China Federation of Trade Unions. Although there are locally-set minimum wages, international observers report factories ignore national guidelines– which are a fraction of US legal requirements. Strangely enough, the Chinese government shows little interest in policing wages, conditions or working hours. 

China’s HuKou or “household registration” system is the real engine of the country’s “economic miracle.” When any one of China’s 350m poverty-stricken peasants migrates to an urban area for a factory job, they must pay deposits and “permit fees” to secure a job (normally obtained via loans from employers). If a migrant wants to return home, they forfeit the money, equal to many months’ wages, and must pay off any company related debts. Equally heinous, immigrant workers are not legal residents in their new urban locations; they’re denied education, housing, health care and social services. They are, in effect, indentured slaves.

According to Columbia University law professor Mark Barenberg, HuKou lowers China’s manufacturing wages by 47.4 percent to 85.6 percent. Barenberg says the policy reduces the price of Chinese exports by 11 to 44 percent. Not to put too fine a point on it, the success of GM’s Chinese exports— including tens of millions of dollars of car parts headed for The General’s US automotive factories each month— reflects the Chinese government’s deeply-entrenched repression of peasants’ personal freedom: apartheid by any other name.

GM’s defense: it ain’t me babe. The claim a GM Chinese automobile production factory is a clean, well-lighted place. GM’s workers enjoy a safe work environment, a regulated work week and higher than average wages (for whatever that’s worth). Even if we assume that the parts makers supplying GM’s Chinese assembly lines adhere to GM’s elevated [for China] wage and safety standards, all GM’s migrant factory workers are subject to the same despicable Hukou system.

And you simply can’t get around the fact that GM’s contribution to China’s economic success supports the continuation of a repressive regime– even if the damage to human rights is done somewhere “off stage.” Apologists argue that GM and other western automakers are part of China’s modernization; once capitalism gains a foothold, political freedom will follow. So… where is it? Why are so many analysts convinced that China’s workers are continuing their “race to the bottom” in international labor standards? And then there's the moral relativist's redout: if we don't do it, someone else will.

That statement puts us smack dab in the middle of a wider debate over corporate ethics. However laudable their behavior at the factory level, whatever the competitive climate, should multinational corporations do business in countries with repressive regimes? Hardball players amongst you will argue that GM’s primary responsibility is to its shareholders, not Chinese or even American workers. Perhaps so. But it is instructive to realize that GM has a bit of history in this regard, and it ain’t pretty.

In an article published in this month’s Jewish Journal, writer Edwin Black outlines GM’s involvement with Germany’s National Socialist Party. According to Black, “GM and Opel were eager, willing and indispensable cogs in the Third Reich's rearmament juggernaut.” Black chronicles a pre-war meeting between GM’s overseas chief James D. Mooney and the Fuhrer, where GM's enthusiasm for Hitler's economic, military and social agenda was abundantly clear. (Mooney later received The German Eagle with Cross.) 

“The Wehrmacht, the German military, soon became Opel's No. 1 customer by far… Expanding its German workforce from 17,000 in 1934 to 27,000 in 1938 also made GM one of Germany's leading employers. Unquestionably, GM's Opel became an integral facet of Hitler's Reich.” Black also points out that Germany’s blitzkrieg depended on Opel’s "Blitz” truck and the tetraethyl gasoline formulation technology sold to the Nazis by a GM subsidiary.

Did Sloan know about Germany’s repression during this time? Black certainly makes a solid case for the assertion. Did Sloan care? “In a long April 1939 letter to an objecting stockholder, [Sloan wrote] that in the interests of making a profit, GM shouldn't risk alienating its German hosts by intruding in Nazi affairs. ‘In other words, to put the proposition rather bluntly,’ Sloan said in the letter, ‘such matters should not be considered the business of the management of General Motors.’” So what’s changed?

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117 Comments on “General Motors’ Chinese Investments: East Meets West on the South Side of Town...”


  • avatar
    mike frederick

    If G.M. did’nt establish manufacturing in China they would really be missing a chance at an enormous market.Same said with the Eastern European countrys they deal with.Though the later maybe more progressive toward basic human rights,its still a gamble for all the Corporations investing heavily inside China as a social movement from the people could put them all back to square one.

    Really intresting to read about G.M.’s buisness involvement with the Third Riech—- Wow–
    But its also important to point out that G.M. also won numerous contracts to help supply the Soviets in the Land – lease deal.

    Does this make it excusable as far as dealings with Nazi Germany?No way,but it does expose one thing.This Corporation could care less about governments and only about the dollar.The same philosophy used in the past is still in practice with China today.Funny how much in life and buissness is cylical.This is one facet G.M. can trully say the know the most of.

    Nice write-up R.F. this one will really get the mind racing.

  • avatar
    jerry weber

    And Mike says it all. If gm doesn’t do it someone else will. And if the US didn’t export all of those jobs to china anyway, someone else in europe would beat us to the punch. It would be poetic justice if a newly envigorated communist regime nationalizes all industry and declares war on the US. But that is just business and risks are risks. Neither ex-communist russia or china are behaving like typical capatalistic countries, and with enough power they will strike out again. China can wreck this country with our debt to them and our lack of manufacturing base. Russia can withold oil to our European allies and wreck our economy indirectly by raising the price of oil to us and destroying the economy of europe. The cards are being dealt to our former enemies, we just have to sit back and wait for them to call.

  • avatar

    Mr. Farago,

    You bring up great points about the mistreatment of Chinese laborers. The issues you describe really should be addressed sooner than later by the U.S. and other governments before the Chinese government gains even more leverage (i.e. more economic clout)

    What baffles me completely is why this article is under the GMDW heading. This makes no sense whatsoever.

    What about VW’s investments? Ford’s? Toyota’s? Honda’s? etc.’s?

  • avatar

    ThriftyTechie:

    I thought long and hard about whether or not to include this post as a GM Death Watch.

    I decided to do so because of the reasons outlined in the first paragraph (and detailed previously): GM’s Chinese investments are a significant risk to the company’s future.

    I am welll aware that the moral issues raised by GM’s Chinese plants apply equally to DCX, VW, etc. But GM is a leader in this market, and I am NOT a fan of moral relativism.

    Perhaps the wider point is that I believe companies SHOULD be ethical. You might suggest that there is a karmic cost to companies that support violations of human rights, but I couldn’t possibly comment.

  • avatar
    mike frederick

    If karma ruled the roost,G.M. Ford.Toyota and Mitsubishi would all be outta buissness by now.

    Karma for Volkswagen—-I’m seeing Hitler roll down Pottsdamm Platz waving at the crowd.

    Robert,I’m beginning to feel as though I’m in a 2nd rate Matrix conspiracy.The major Corporations play at each side of the table and the poor working man is subjected to cheesy plastic interiors and non-handling Shelbys.The Horror.

  • avatar

    I might find it a compelling argument if it was possible to avoid cheap labour. Direct opposition to repressive regimes led to the Cold War. The attempt to essentially co-opt China with creeping capitalism might have a better long term path, but it may not.

    The computer you posted this entry on was probably built in a very similar factory. It is not an issue of choice on the part of the consumer, sometimes there is no choice at all.

    Of course, we could also blame the unions again for driving business away…

  • avatar
    mike frederick

    Ohh one more thing on Car company Karma

    Mercedes—choice of luxury for all aspiring SS brass

    Toyota ( though no design of their own ) 12 yr. old compact pick-ups/ prefered choice of Despots and renegade militias for mounting 30. caliber machine guns in the bed and roaming around nasty city streets.Just cant beat that Toyota quality and durability.

    Fiat— for supplying the Italian army and helping them conquer of all things-Ethopia at the onset ofWW2.It could have been their theory to ride Mussollinis coat tails toward Roman expansion.
    Allright I’m done babbling.

  • avatar
    Jonny Lieberman

    Bravo Bob, but…

    Why then did you say Ford is “a loser” for promoting gay rights?

  • avatar

    Ethics and business have never had a very friendly relationship. Supporting oppressive regimes is part of almost every major multinational’s cognitive dissonance. It is not hard to imagine a world in which America eventually ends up regretting China’s ascension to superpower status. The Chinese government is not interested in advancing the rights of their people, or spreading freedom throughout the world. Their only concern is power, money, and getting more of both. The idea that other company’s lack of ethical behavior in anyway excuses GM’s decision to get in bed with the Chinese government is just another example of relativistic morality justifying what is potentially bad policy.

    The Chinese government continues to dispose of disagreeable citizens by murder, false imprisonment, and oppression. They exploit an uneducated workforce in order to function as a wellspring of cheap labor for the world’s multinationals. But none of that matters, because the ethical implications of business decisions have no bearing in “free” market ideology. It’s all BS, of course, but when has that ever stopped anyone in the industrial age?

    Greed uber alles, always and forever. Good article Robert.

  • avatar

    C'mon Jonny: I didn't say Ford was a "loser" for "promoting gay rights." I said Ford should steer clear of US cultural/religious issues. Without engaging in a debate about the legal protections afforded homosexuals in America, surely you can see there's a difference between sponsoring Gay pride marches and organizations promoting gay marriage and perpetuating a political system that inflicts abject misery (not to say a form of slavery) on millions of people without any substantive legal rights.

  • avatar

    Still baffled.

    I decided to do so because of the reasons outlined in the first paragraph (and detailed previously): GM’s Chinese investments are a significant risk to the company’s future.
    And how is NOT investing in China less of a risk? If GM took the moral high ground and pulled out of China, you would have to end your ‘Deathwatch’ and start the ‘GM Eulogy’ series.
    …GM is a leader in this market, and I am NOT a fan of moral relativism.
    Point taken on the moral relativism. But GM is a leader in this market? What is this? 1965? We all know that Toyota is the leader now. Maybe not yet in sales, but they set the pace business-wise for the entire industry.

    Don’t get me started on ethics… Who’s to blame for the human rights violations? The Chinese Government, the U.S. Government, the Chinese consumer, the American consumer, etc. etc. GM and Toyota hardly merit a shout out.

  • avatar
    Eric Miller

    Interesting write up

    Like others, I have issue with this criticism being aimed at GM and not the global auto industry as a whole. The investment in China over the last few years has been massive. Toyota, Ford, DCX, GM, and several others have significant interests there.

    If GM did not follow suit, surely there would be a Death Watch article on GM’s stupidity for NOT being in China.

  • avatar
    Sajeev Mehta

    This goes beyond the global auto industry, this is all about the Global Middle Class.

    Unless the American middle class starts to make themselves heard, GM et al will continue to use Chinese labor because consumers and beancounters (esp. beancounters) want cheaper products. Its a viscious cycle.

    Actually, this could be a great talking point for the UAW. Instead of hiding behind trends that lead to their extinction, they could make this a moral issue.

    I’d love to hear this debate broadcasted over the media much like less pressing matters like Gay marriage, freedom fries, etc.

  • avatar
    Eric Miller

    Funny, Thrifty Techie and I posted the same sentiments at the exact same time.

    Additionally, maybe the global auto manufacturers doing business in China may be there only because they had to. They couldn’t have imported cars into China from a neighboring country with ‘better’ political conditions as China would not reasonably allow it. If GM (or Toyota, et al) wanted a piece of China’s explosive growth and potential 1B unit marketplace, they had to do so IN China and partner with a Chinese automaker.

    GM’s supply chain has been stretched over ‘an enormous distance’ for quite some time. They have interests in Poland and Russia for example. And isn’t Australia ‘an enormous distance’ from just about anywhere? They are now investing several hundred million in India. GM is a global company.

  • avatar

    Thirftie Techie, Eric Miller: Don't you guys have enough fun criticizing me for the things that I do say without jumping on me for things you think I'd say? If GM took a stand on China, I'd give them the credit they'd deserve. In any case, are you seriously suggesting that GM couldn't stay in business if they stayed out of the Chinese market? And where's your indignation about all the American jobs lost to China? While we're at it, I'd like to hear your thoughts about GM's extremely profitable investment in pre-war Nazi Germany. How great was that? Sajeev: I agree. The UAW's silence is deafening. As is the media's.

  • avatar
    Eric Miller

    RF, you can never have too much fun

  • avatar
    dhathewa

    Great article. Thanks. I agree that inclusion as a DeathWatch is appropriate; the Chinese do not do business by rules meant to suit others. Why did GM rush to join an economy where piracy is a way of life?

  • avatar

    Actually, this could be a great talking point for the UAW. Instead of hiding behind trends that lead to their extinction, they could make this a moral issue.

    You’d think they’d be all over this like a python on a piglet wouldn’t you? But if you search for “China” on the UAW web site you find press releases and transcripts of statements that are 2 to 6 years old (or older). There’s nothing recent. After the initial chest thumping about GM and other builders ramping up in China, they’ve been unusually quiet on this topic. It makes me wonder what’s going on.

  • avatar
    windswords

    akatsuki:
    December 3rd, 2006 at 10:39 am

    I might find it a compelling argument if it was possible to avoid cheap labour. Direct opposition to repressive regimes led to the Cold War.

    Akatsuki, I find fault wth your historical deduction. The Cold War started because the Soviets did not withdraw their troops from the liberated countries of Eastern Europe (the future Warsau Pact) and they did not disarm their own armies to any large degree like the west did (at their height in WW2 the Russian army had 400 divisions, the American army @ 90). Also the Soviets tried to blockade Berlin so they could take the portions of the city that by previous signed agreements were to be controlled by the Americans, British, and French, leading to the Berlin Airlift, arguably the first “battle” of the Cold War. Around this time the free movement of citizens from East to West Germany was halted. This was the time that Winston Churchill said in a speech that an “Iron Curtain” had descended on Eastern Europe.

    Back to the subject at hand… RF you have to remember that many (too many) people thought that Hitler was an “OK” guy during the 30’s. He hadn’t invaded any countries yet, although he did annex some German speaking territories. He also broke the Versaille (sp?) treaty more than once by rearming and reconstituting the German armed forces. He then began persecuting the Jews, but hey, that’s an internal affair, and who are we to interfere? I don’t know if they had anything like our modern equivalent of weapons inspectors, but if they did I’m sure he lied to them and when he felt he could get away with it, he kicked them out (ala Saadam Hussein).

    You can say that GM and other countries should have known better but there were so many on our side, including major politicians saying that it was ok, “peace in our time”, etc., that I can at least understand them willing to entertain the idea that if we ENGAGE him we could make him play nice by our rules. Even the New York Times wrote positive articles about Hitler.

    There were very few who were willing to call a spade a spade back then. Winston Churchill was one, but he was like a voice crying in the wilderness.

    Now fast forward to today. We have this guy in Iran, Mahmoud Ahmadinejad, trying to get nukes, saying that Israel should be wiped off the face of the map, the Holocaust never happened, and more, and yet there are those who say we can talk to this guy, trust this guy to play nice by our rules. Even Mike Wallace, who is Jewish, interviewed and had positive things to say about him (I haven’t checked, but I would bet that the NYT has also written favorable articles). He’s wrote an open letter to America talking about peace, human rights, and freedom, but there is video of him at various Middle Eastern confrences saying that Israel must be destroyed, Europe must be conquered by Islam, and America must be defeated.

    Sometimes I feel like it’s 1938 again.

  • avatar
    pogi

    China’s political rulers are such an easy target, but why not look a little closer at what goes on at home? This Human Rights Watch report on the meatpacking industry (http://www.hrw.org/reports/2005/usa0105/) in the US describes conditions that sound far worse than those of GM’s china workers, but I’m sure few Americans think about that when stuffing a steak into their mouths.

  • avatar

    American jobs being lost to China (or any other country) is largely a myth.

    It is rare that a job that is done in location A is moved to location B simply because the labor is cheaper. Seriously.

    There are some instances of this happening. They make the newspaper. Much like a murder makes the paper while millions of people that die of common diseases never get notice.

    The real cause of manufacturing job losses are gains in efficiency. The irony is that at this point, more manufacturing jobs are lost each year in China than in the U.S…

  • avatar
    Bill Wade

    I’m trying to figure out the supply chain issue. As long as GM isn’t sole sourcing an item from China then they could rapidly recover from any upheavals there.

    It’s also unlikely that China will ever be a significant part of their business. To do so would be foolhardy until business and political safeguards are in place.

  • avatar
    wsn

    Robert, as I ask before and never got an answer (maybe you answered, but I lost it among all the posts), I might as well ask again: how many years (or days) have you ever lived in China?

    Let me focus on one simple fact here: HuKou, the residential certificate.

    Its main purpose is to control the farmers. Its main effect is a wealth disparity between the farmers(even though they may be working in a city, mostly construction) and city residents. In other words, city residents exploite farmers.

    Most (I suppose “all”) of the GM workers in China have their city HuKou, since the jobs are considered very good.

    Had there not been HuKou, the salary disparity between the two classes will shrink. That will make GM workers get paid less, since GM can then have the freedom to hire someone without a city HuKou. On the contrary, Nike workers may get paid more in that case.

    Judging China is liking judging a GM car (or a Ford car, or whatever). It may be bad in one way. But you just don’t write a car review without a test drive. No, it does not make your car review any better if you got your info from someone else.

  • avatar
    jthorner

    In my view this has nothing to do with the GM Death Watch series and it was an almost impossible stretch to include GM’s participation in China as one of it’s significant survival risks. The only other choice for GM is to not play in China at all. I’m fairly certain that if GM was sitting out China on moral grounds that doing so would be included in most commentaries about what is wrong with GM.

    The issues raised are more than even industry wide. The west’s strategy since the Nixon/Kissenger era has been to attempt to infect China with capitalist and democrate ideas through a multi-decade program of engagement. Every US President since Nixon has continued on this course of action, Democrat and Republican alike. The China of today is not a perfect place, but it is on average a better place for it’s people than it was in the 1960s.

    One price of the west’s policy visa-vis China has been intense pressure on the wages of low skilled factory workers in the west. In a way this can be viewed as a global redistribution of wealth in much the same way as wealth is redistributed by the tax codes in the US.

    There remain grave risks inherent in what is going on, but given the realities outside of GM’s control it seems to me that they are quite literally doing the best they can visa-vis the global political and economic realities with respect to China. You can read any of my other posts to see that I am not an apologist for the 2.5, but in this instance I see the attack RF has made as completely missing the mark.

    Perhaps you would do better with the supply chain argument if your targets were WalMart or Hewlett-Packard. The global auto parts supply business is more geographically diversified than that of almost any other manufactured product.

  • avatar
    Terry

    Great article, very thought-provoking but….
    The “Great Unwashed Masses” in this country couldnt care less. Bring up all the WWII parallels you want…how many Jewish people in this country, relatives of the 6M exterminated in Germany, are happlily piloting their Mercedes, VWs, Audis and BMWs? How many of our fathers and grandfathers–people that helped this nation celebrate cictory over Japan are supremely content owning Avalons, Altimas, Camrys, and Accords
    People bitch about Walmart killing unions and all the small businesses in their towns across this country, yet eagerly shop there and brag about the savings on the Chinese-made goods they just purchased, not to mention the convenience.
    You think the auto compnaies dont see this?
    When I took my automotive students on a tour of the local Chrysler plant , there were US flags everywhere, signs that read… “Hungry?–eat your import!”
    Then I noted that many Mitsubishi engines were being installed, all of the assembly machinery was made by Niichi-Ra and Ryobi. When I asked our tour guide about this conflict of words and deeds, he acted like I just raped his mom and shot his dog.
    These days, nationalism stops when monetary gains come into play.
    But you all knew this, didnt you?

  • avatar
    WaaaaHoooo

    I think I’d rather deal with the communist Chinese than the UAW.

    Fact is, though moral relativism stinks, there is no better business alternative to manufacturing (many things) in China right now. I don’t see in the article or posts above any alternative offered to that dilemma, and until there is, that is where the manufacturing base is going to go, like it or not.

    I remember back in business school taking the wildly unpopular argument that “if utilized properly, there are high returns to slave labor.” I did it as tongue in cheek and as a devil’s advocate, but China has found a way to essentially make a go of that and the desire for GM to take a stand on that will do nothing but damage the General even more. Please, Robert and the rest of you, post a viable business alternative and not just a shallow politically popular diatribe. We all know what politicians do when asked to make good on their statements.

  • avatar

    Stalin was in many ways far more evil than Hitler.

    The Red Army rode to Berlin on Dodge trucks while the Wehrmacht retreated on their Opels.

    The only point the Capitalist really cares about: Which ones were paid for? ;)

    –chuck

  • avatar
    wsn

    Replying to WaaaaHoooo:
    I remember back in business school taking the wildly unpopular argument that “if utilized properly, there are high returns to slave labor.”

    And you know what? The “slave labor” thing actually gets improved. Chinese labors now earn more because of the foreign companies.

    Back to the “ethics” thing. If I tell you there is a country, the president issues unconstitutional orders to spy on the citizens, the suspects are held indefinitely without a trial, and the soldiers rape and kill foreigners. Would you still want to do business with the country? Is that ethical?

    Moral relativism does exist.

  • avatar
    Terry

    “Fact is, though moral relativism stinks, there is no better business alternative to manufacturing (many things) in China right now”

    WaaaaHoooo, that statement says it all RIGHT THERE. For the companies involved, there is no need for an alternative.
    As long as there is a demand, and that demand is satisfied by a product at a price point consumers are willing to pay(no matter WHERE it’s produced), from the company’s perspective there is no problem.
    IMO, the “Global Economy” has led to an economy that is service-based as opposed to a manufacturing-based.

  • avatar
    aa2

    I think being in many nations is actually a way to reduce risk. And the same goes with having your American operations spread throughout many states. One law passed by politicians can wreck companies. Like the Michigan labor laws that put all of the power on the union side for negotiations.

  • avatar

    After reading your comments, I’ve decided to remove this piece from the GM DW canon.

    Thanks for your insights.

  • avatar
    mike frederick

    If ever theres a case for workers rights,protection you name it,it could possibly be found in Chinese factories.It has been cronicled & proven in the past that labor conditions and practices are arcane to standards employed in this country.

    This is the perfect pretext to unionization.Its a possibility but one that a government such as China would say is dissadent behavior and crack-down on.

    I have a hard time beliving the UAW is’nt active in at least some facet with regards to the 2.5’s involvment over-seas.

    Some years down the road I really believe chinese factory workers will form some type of bargining power.I just hope that its done without the cost of human life.If they were to unionize,I think it would be treated like Tiannimen Iknow -misspelled )
    The conditions are there its just a matter of someone stepping up to the plate.

  • avatar
    Rastus

    Work will set you free:

    http://images.google.com/imgres?imgurl=http://www.nazis.de/inidia/arbeit_macht_frei_terezin.jpg&imgrefurl=http://www.nazis.de/inidia/arbeit_macht_frei.htm&h=493&w=400&sz=23&hl=en&start=16&tbnid=rhMqzz9QM1qL1M:&tbnh=130&tbnw=105&prev=/images%3Fq%3Darbeit%2Bmacht%2Bfrei%26svnum%3D10%26hl%3Den%26lr%3D%26sa%3DG

    This all boils down to the question: What is freedom?

    Is government thievery and extortion (taxation) freedom?

    Is government monopolization of money (with their Central Banks) freedom?

    http://www.mises.org/money.asp

    Is the compulsory confiscation of labor services (forcing business to keep tax records and collect witholding taxes) freedom?

    Let’s face it, people…the majority of you our there are just like me: A Rastus!

    Get used to it. Morality aside, it’s better to know your life is only gauged by how much money you make others…than to proclaim ignorance.

    Thats why, while I really have a strong distaste for unions, they at least counter one large force (corporations) with another. If for some reason you think little ole “you” as the Marlboro man, Mr. Freedom and Independent…you are slightly delusional.

    Gas price fixing? Nahhh. Political intrigue? Nope, not a chance either. Mass Brainwashing on the largest scale?…of Course not…now go on, children, it’s Christmas Time!!!…you know what that means, don’t you?

    Be a good little “consumer”, hear???

    How many months of each and EVERY year of your life (your LIFE!) is spent slaving away for the state?

    Hmmmm.

    Taking up arms for the state? Murder, slaughter….slavery….

    YES!! It’s a rightfully UGLY situation…and don’t think you are not a participant….you ARE!!

  • avatar
    David Yip

    Come on. So the Nazis drove GM Opels. The Nazis also used IBM computers to coordinate the Holocaust. Bad things have happened, are happening, and will happen. Fine, moral relativism sucks. But it’s there. Watch “The Corporation” – it’s a fast 2.5 hour guide to corporate immorality. Can you blame them? Maybe. It’s legally free off of BitTorrent, even.

    Also this idea of “virtually endless supply of cheap labour” is commonly batted about. Does everyone actually believe this? We are at point now where, in some sectors, there are labour shortages in China! Workers can now choose which factories they want to work at. From the Wall Street Journal:

    “Toymakers have been working around growing labor shortages that are occurring as Chinese workers flee the lower-paying toy factories for better-paying high-tech factories.”

    Now that’s there’s choice, how do you get workers? Better wages, better working conditions, better factories. I would say GM should be commended on setting a standard, no?

    Is “China Paranoia” the next TTAC series?

    WSJ article
    The Corporation
    IBM & the Holocaust

  • avatar
    mike frederick

    Nazis used IBM computers to coordinate the holocaust???
    I’ve got no recollection of that ever happening,but I guess I’ll just take you’re word on that one.

  • avatar

    The jury is out on the IBM Hollerith card readers controversy, but the conclusion depends upon your POV.

    C-NET did a good rundown.

    http://news.com.com/2009-1082-269157.html

  • avatar
    willjames2000

    Interesting stuff… but Mooney and Sloan are dead and not running GM worldwide anymore. And, as pointed up in many comments, RF would be critical of whatever GM did there anyhow.

    Consider the fact that 1) this is not fresh news AND 2) RF posts it two days after the latest bit of good news about GM reinforces those of us who believe that he’ll either ignore any positive info about GM or somehow turn it into a negative.

    From the DFP, December 1st, 2006;

    “GM’s sales, increased 6.1% to 293,558. The Chevrolet Tahoe, GMC Yukon and Cadillac Escalade, all redesigned earlier this year, showed growth of 70% or more from November of last year.

    Sales of the Chevy Silverado and GMC Sierra were up 18% and 31%, respectively. Redesigned versions of these trucks were starting to hit the market in November. The Saturn brand, thanks largely to an all-new Aura midsize sedan, was up 24%.

    GM also reported encouraging news in its effort to reduce its reliance on fleet sales. Fleet sales, which include sales to rental-car companies, often prop up volumes but hurt profitability because they’re made at cut-rate prices and can damage the long-term value of a brand.

    GM’s retail sales — those to individual auto buyers — were up 11%, and the company should meet a goal set in January to have retail sales for the year of 3 million vehicles, said Paul Ballew, executive director of global market and industry analysis.

    “We’re hitting our marks in terms of the targets we set for the turnaround plan,” Ballew said.

    GM’s sales were solid, analysts said. But they also cautioned that the comparison between this year and last year is somewhat misleading. After relying on big incentives through the summer, GM’s sales had fallen dramatically by last November, lowering the bar for what it needed to post this year to show an increase.

    GM, though, does appear to have winners with a new set of trucks and a family of large crossovers hitting the market later this year and early next year, said Alex Rosten, an industry analyst for Edmunds-.com.

    “They have an incredible amount of product in the pipeline that’s about to come out,” Rosten said.

  • avatar
    oboylepr

    The Nazis also used IBM computers to coordinate the Holocaust. ??

    Could you elaborate on that one please?

  • avatar
    Luther

    There are approx. 1.4 billion Chinese and about 4000 lying, thieving, murdering maggots that refer to themselves as “The Government” (We only have 537). Not only is GM and all who conduct business in China bringing economic opportunity and material well-being to the Chinese people profoundly moral, they are heroic.

    If you ever watched the Pixar movie “A Bugs Life”, the grasshoppers being “The Government” and the ants being the people… the grasshoppers, in time, are toast!!!!

    On a personal note: To the kid that stood up to the tank in Tienamen square – I hope you are rich, happy, have a supermodel wife, many non-TWAT cars, and have everything you ever wanted and more ! You, my friend, are the man… A REAL man !

  • avatar
    gunnarheinrich

    So what you’re saying is that GM has already gone bankrupt – morally.

  • avatar
    tms1999

    Aaaah! The good old defence of being forced into being greedy!

    “If I don’t do it someone else will!”

    And even better in these comments: defending both GM and China. You can argue that China is not really a communist country anymore, but they sure are a dictatorship.

    We’re also building our factories there, training their workers, giving them our technology and know-how. Then one day, they won’t need us. They’ll just either make their own cars, or make our cars under their brand name and we’ll find out there’s nothing we can do about it.

    And btw, foreign investment is capped at 50% in any company in China. You can’t own or control any company. Car manufacturers are forced in partnering with existing chinese manufacturers (owned by your friendly chinese government). So there’s actually no need for nationalization, all those GM, BMW, VW factories are already property of our chinese friends.

    And for the ethical issue, I guess that if we could outsource slavery far far away, and keep it there, so long as we don’t have to look at it, we can rationalize it in our mind.

  • avatar
    WaaaaHoooo

    ……And I’m still waiting to see all those viable business alternatives to investing in China from all the naysayers…..

  • avatar
    Joe ShpoilShport

    Holy cow! I thought I had logged on to a car review website. And BAM! we have reevaluated WWII, and weighed in on almost every world conflict and leader.

    RF: I remember not too long ago you wrote another editorial comparing UAW members to something dispicable (that something escapes me now, dammit). After a small but vocal group chastised you, you withdrew the article. I guess you’ve decided to poke the bear again. However, being a victim of history channel saturation the article and following comments become a blur to me. You may be right. You may be wrong. Which way will the wind blow tomorrow. But, for what it’s worth, I would again recommend sticking with cars.

  • avatar
    mike frederick

    On a personal note: To the kid that stood up to the tank in Tienamen square – I hope you are rich, happy, have a supermodel wife, many non-TWAT cars, and have everything you ever wanted and more ! You, my friend, are the man… A REAL man !

    Luther,You’re so right.He is-or was- a MAN amoung men.

  • avatar
    wstansfi

    Black, White… maybe Gray?

    I don’t understand why it’s an all in or all out move for GM to be in China? Or rather, it’s all “right”, or all “wrong”. Can’t you manufacture in China and provide relatively decent working conditions?

    I’m also a bit surprised that everyone feels that business and morality are separate – is there nobody reading and commenting that believes that at least sometimes, although hard in the short term, doing the right thing is better in the long term? I imagine that the moral high ground, although expensive, is also quite valuable… just look at the success of organic vegetables.

  • avatar
    wstansfi

    btw, I’m on the edge of my seat to hear the interpretation of Captain Kirk’s reported liquidation of his remaining block of GM shares in a private transaction on Friday. Next GM deathwatch tomorrow?

  • avatar

    IBM did indeed supply a lot of automation and record keeping nouse to the Nazi regime. I’m not sure about the claim of ‘coordinating the holocaust’, but they made some mad money at the time courtesy of the rising Germans.

    RF, this has got to be the real scraping of the bottom of the barrell in relation to the Deathwatch series (and your pulling it from that category is ludicrous – take responsibility for your words as they were written, please).

    As mentioned earlier, if GM weren’t in China you and every other pundit would be all over them for lack off business nouse. If you’re going to have a crack at them, then tar all manufacturers with the same brush. This isn’t a GM thing, it’s a corporations in general thing.

    And on the German thing, somewhere in my archives I have a picture of Ferdinand Porsche showing off a model of the new VW prototype, which we all came to know as the beetle. Looking on in admiration and wonder is one A. Hitler, who later honored him with a medal in 1937.

    So where’s the VW article? And don’t you own a car that bears Mr Porsche’s name? If perchance you’ve written this on a genuine IBM PC then the trifecta of hipocrisy is quite complete.

  • avatar

    Sub in ‘of’ for ‘off’ in paragraph 3.

    And add the fact that VW are also huge players in China in paragraph 5.

    Damn edit function won’t work…..

  • avatar
    David Yip

    I’m also a bit surprised that everyone feels that business and morality are separate

    I don’t believe business and morals should be separate, and indeed there are examples of business both being profitable and beneficial.

    However I also believe that no-one should be surprised when businesses act questionably.

  • avatar
    WaaaaHoooo

    Serious question for Mr. Farago and all those who agree with the concept that GM should put its money where your mouths are with regard to China: Have you actively called your broker/financial advisor and said “I know I might take a hit on this, but I want to financially take a morally absolute stand when it comes to China. As I see it as an oppressive state hell bent on being the USA’s and free/democratic world’s next great enemy, I wish to immediately divest my portfolio of any and all companies doing business in China, with China, or from China.”

    Be honest – since you want GM to do this: Have you?

  • avatar
    SpinningAround

    Corporations as legal entities in the western world don’t have ethics or politics. Their sole raison d’etre is to produce returns for their shareholders by minimizing costs and maximising profits. We impose a variety of rules, regulations and laws upon companies to provide a framework within which companies must operate in order to meet broader societal goals for things like the treatment of workers. Those in charge of the company, the executive team and board of directors, may decide that they have broader ethical and moral responsibilities to employees and customers but they are fundamentally constrained by the need to meet goals set by the market. Frequently ‘ethical’ behaviour such as long product warranties are driven more by the action of economics than legislation.

    Its hard to see a move to China as a damning indictment of GM, or any other company, when the market positively rewards companies that minimize their costs in this fashion. It might be seen as an indictment of free market economies but then the free market is one of the things that has made America what it is today. And, to the extent that America has influence over China, it is this sort of economic influence that gives America one of the biggest sticks it wields to bring Chinese policies in line with those of the rest of the world.

    Economically speaking, import restrinctions, tariffs, and other protectionist legislation have historically been extremely ineffective at doing anything than artificially propping up local industry- just take a look at the farming industry- to the detriment of the world economy. If you want companies not to act in this fashion then it is the shareholders who need to be convinced that forgoing short-term benefits in favour of longer-term ethical goals is the right move. And, given the way the American economy operates then I would guess that this is not going to happen anytime soon.

  • avatar

    I am amazed (but not amused) that so many of you chide me for criticizing GM's economic contribution to China's existing power structure on the basis that I would lambaste GM if they weren't' doing business in China. That's as absurd as it sounds. I realize this is not a simple issue. I am not such a zealot that I can't see the validity of "positive engagement" with China, or the importance of the free market in a global economy, or even GM's duty to its stockholders. But China's systematic violation of its workers' human rights are simply under the American political radar, and that ain't right. Does the average American know about the working conditions in China that produce their toys or car parts? No. Do they care? Well, if you don't know, how can you care? And there are political implications: issues that affect stability in the region and, indeed, the world. Where's the discussion on these points? And one more thing. I do not bring up GM's connections to the Nazi regime lightly. When difficult choices must be made– and they are made by both action and inaction– history has something to teach us.

  • avatar
    pauln

    Robert, please stick closer to your area of expertise. The China situation is too complex for simple moralizing. China is transforming a primarily agrarian economy to a state-of-the- art industrial economy in some 25 years, something that took USA and Europe over 150 years. There were a lot of warts along the way in the west too (read “The Jungle”, etc.). The Chinese love GM’s jobs. China is headed for a demographic cliff in the next 10-20 years as a result of their one-child policy. As someone stated earlier, there are growing labor shortages. The rapid modernization of China may not be pretty to watch, but it’s inevitable and its going to be fast. And once it starts to level off, there will be lots of time (and likely, interest) for the Chinese to play catch-up in politics, environment, human rights, corporate ethics, etc.. Right now everyone is too busy grabbing their share of the Gold Rush.

  • avatar
    wsn

    Replying to tms1999
    And even better in these comments: defending both GM and China. You can argue that China is not really a communist country anymore, but they sure are a dictatorship.

    I think it’s more about political competition and not so much about human rights.

    Take Saudi for example, their human rights is much worse than that of China. In China, as long as you do not oppose the government, you still have lots of non-political rights. But in Saudi (dictatorship of the purest form), it’s much much worse. Women get stoned to death for adultery.

    In addition, Saudi is the country that spawned the greatest terrorist ever known to this world. Many people in power in that country still have terrorist ties. Can you say, stop doing business (i.e. importing oil) from Saudi?

  • avatar

    pauln Although I would contest your assertion that China faces a labor shortage, I realize my limitations in these matters. I've investigated the injustices in China, and felt the need to speak out. I will not belabor the point. As for the idea that political evolution follows economic evolution, I hope you're right.

  • avatar
    Eric Miller

    RF-

    Whether it was right or wrong, you have my increased respect for having the balls to rethink the Death Watch heading for this article. I’m impressed.

  • avatar
    Luther

    GM is actually doing quite well in China. Maybe articles about GM in China should be called “GM Life Watch”.

    As for the idea that political evolution follows economic evolution, I hope you’re right.

    In China’s case, it will. It already has. You can not put the free market genie back in the bottle. If the Chinese Gubmint trys, it will make Tienamen look like a picnic. No dictatorship can exist without at least some support by the masses. The Chinese people are beyond that already. They love their Buicks.

  • avatar
    HawaiiJim

    A key issue is whether RF is willing to apply to other aspects of the auto economy the same high standard he applies to GM’s involvement in China. For example, is he willing to put his sports car in dry dock rather than run the risk that filling it with gasoline might support an oil-producing nation that does not protect equal rights for women or that is an out-and-out dictatorship? On balance, though, he’s right to expand TTAC’s scope into politics and morality. That decision adds depth and meaning to the site.

  • avatar
    wstansfi

    I don’t understand how RF can be criticized for raising the issue of China’s treatment of its workers. How is this wrong/stupid/naive/off context?

    Besides, books like The Jungle should not be used to excuse poor worker treatment in the name of political and economic evolution – rather, books like The Jungle are a testament to the effect of involvement of the literary public in unfair working conditions…

    Behold, the UAW!

    From the comments of spinningaround, isn’t it sometimes or even often the case that doing the right thing (especially publically) can have long-term positive implications? e.g Why else do we have corporate contributions to charities?

  • avatar
    DearS

    Morality/Ethics of GM seams questionable. Still, its like saying, giving a person with a gun to our heads, our wallets is immoral. Are the chinese better off without GM, No! The road to democracy is going to be a tough one for China. Atleast this one seams to have a chance at a less violent change.

  • avatar
    Sajeev Mehta

    rather, books like The Jungle are a testament to the effect of involvement of the literary public in unfair working conditions…

    Amen to that. Today authors like Lou Dobbs and Kevin Phillips seem to be leading the way. (admittedly that’s from what little I see)

    Important people are starting to defend America’s middle class, but where’s the UAW in all this?

    The UAW has gotta take the offensive against our government’s trade policies, against CEO greed, etc. I’d like to think someone over there has noticed this emerging trend and is hard at work promoting America’s middle class, and the UAW in particular.

  • avatar
    Luther

    Who, in their right mind, would want to live in a Dumocrazy? Seriously. It is nothing more than stealing from those that do not vote for you and handing the loot over to those who do. Dumocrazy destroyed every great nation that adopted it. (Read Pericles and ancient Greece.)
    I would much prefer a benvolent dictatorship or even a Monarchy over Dumocrazy. As Mel Gibson stated in “The Patriot” “Why would I want to trade one bastard 3000 miles away for 3000 bastards one mile away”. Dumocrazy is like renting your house out to a college fraternity.

    http://www.lewrockwell.com/hoppe/hoppe17.html

    And if you dont like your employer/working conditions then QUIT! Go find better opportunities for yourself or better yet start your own company and run it the way you prefer. A big, bad, evil corporation does not owe you anything, not even a job. They are only in business for their shareholders. Period.

  • avatar
    BerettaGTZ

    Robert,
    Your opening statement “GM’s money is propping up a communist dictatorship” should be a tip-off to anyone that this is far from a balanced, thoughtful editorial. While I don’t deny that there are major human and workers’ rights problems in China, you also have to understand that your “research” into this area is limited to what’s written in our biased press. Like it or not, the US-based press only writes about what’s bad in China, just as the government-run press in China publishes only the ugly embarassing news about the US.

    When GM set up shop in China, it was not to run an exploitative sweatshop. If you walk into GM’s air-conditioned Shanghai plant, it looks and feels exactly like any GM plant in the US (except for the ethnicity of the workers). The health, safety, and ergonomic standards are exactly the same. The GM plant revolutionized auto manufacturing in China, and it is being imitated by scores of other companies, a case where copying is a good thing.

    So I would argue that GM doing business in China does good things for China. When the first plant opened, the amount of positive press it got was unprecedented. All of China’s 1.3 billion citizens knew about it and what it stood for. The 6 GM plants now in China stand as a beacon of hope to the millions who are working in the oppressive sweatshops, as a living example of how a US company treats its workers — with fairness, respect, and humanity.

  • avatar
    XK150

    I’m just wondering when Hollywood will start with the ‘China threat’ movies, as they did in the late 80s/early 90s with Japan. Remember ‘Black Rain’ and ‘Rising Sun’?

    PS: I’ve lived in China for six years out of the last ten: Nobody talks politics (what’s the point?) Everybody just wants to make money so they can get the 3’C’s – condo, credit card, car. Most still have a long way to go …
    Jobs in western or JV companies are prized, generally because the pay and conditions are better, and you don’t get screwed as badly – as in, you actually get paid what you’re owed, and on time, too.

    Political reform will only come when there’s a strong enough middle class to demand it (and an end to the rampant corruption). Maybe another twenty years? Just in time for the big bust!

    The two will probably be related, because the only legitimacy the government now has is it’s claim to be the provider of economic growth. (Just don’t ask them what would have happened without the forty years of Stalinist central planning and madness like the ‘Great Leap Forward’ – 30 million dead of starvation – and all the other bright ideas …)

    In the meantime, why not give the working people of China a break, and let them both build and buy their Chevvy-badged Daewoo if they want one.

  • avatar
    jazbo123

    [Insert your company name here] investment in The People’s Republic of China presents two main dangers. First, it extends [insert your company name here] supply chain over an enormous distance. Second, it enmeshes [insert your company name here] in the economy of a non-democratic country.

    What the hell are we doing?

  • avatar
    jerry weber

    Robert Farago’s meaning always gets turned from his topic by others. Look, to say that building buicks in china guarenttees their path to a democracy and say farago should stick to dissection cars is taking a giant leap of faith. There is no evidence that China is any more “free or capitalistic” than it was 20 years ago. It is more open to foreign investment. There is another china we westerners don’t see of a military frantically building for a global presence. There is a political dynasty that would shoot dissenters and supress any kind of free expressions in a micro second. This includes,economic, political, educational, and religious. Yes, they allow gm, vw, ford, mercedes etc. to do what they want in their country, because they are building fabulously useful plants that can be nationalized the first time the us govt. crosses the line on any number of issues like: taiwan, japan, middle east, etc. Once nationalized, any of these car and light truck factories can be retooled for military use in a heartbeat. Will they do it? We can just wait for their military to be strong enough to challenge ours on the world stage. It doesn’t have to end like this, but it could and Farago is only pointing it out that these investments are different than say building in Europe.

  • avatar
    BostonTeaParty

    This never was and never should have been a DW article, please think longer and harder about what you title/write, it feels like you’re losing the edge and maybe have stretched yourself a little too much on this one, definately more research and less passion induced please.

    Great points wsn, America is so hypocritical, ignoring saudi terrorists, all for the sake of oil, its the same with American support for the Irish terrorists that killed so many, yet were still supported until this country was attacked and the administration then felt ready to denounce them as they needed Britains help?!

    Every company and country has skeletons in its past, are we going to pick on Nike for past sweat shops in 3rd world countries while we’re at it? The list of American companies running their businesses as they see fit by using this cheap labour is huge and is something you have to expect in this modern market place, companies have obligations to their shareholders, employees and customers to produce a product as cheaply as possible for profit, it’s called good business sense and its another case of if GM wasn’t there doing this RF would be on the same old GM bashing band wagon screaming why not, everyone else is?!
    I wouldn’t be surprised if we’ll be seeing cars and other products built in Africa in the next decade once it becomes feasible there. That can only be a good thing eventually for business, and for them.
    If it wasn’t for investments in areas like this outside of NA, GM would be in a hell of a worse position. It’s all good business sense that the rest of the automotive world is doing to, so make your articles cover that thoroughly or just stick to what you know best.
    If you’re going to take a moral stand and not buy anything made from any source of oppressed worker then you’re going to have a strange, empty life.

  • avatar

    BostonTeaParty

    How could someone with your alias be so cavalier about human rights?

    And for the last time, I would NOT criticize GM for taking a moral stand in their overseas operations. At the same time, it’s worth noting that GM’s NA business can not be saved by its foreign divisions.

  • avatar
    NN

    Here’s a personal account, instead of opinions from “analysts”.

    I was an English tutor in China for a year and spent some time teaching the factory owner (on location) of a duck-blind supplier to Walmart. The wages of factory workers are nearly incalculable because the factory provides all…housing (in concrete-block apartments), food (cafeteria style), schooling, etc. In exchange the workers toil for long days and receive a very small pittance for their personal expenditures. That being said, they don’t buy much since basic necessities are all provided by the factory. It is not a life that I envy, that’s for certain, but for many Chinese, it is a large improvement of where they were not too long ago–literally starving. Also, the better educated people within China are now offered middle to upper class living standards that have everything to do with all this foreign investment–factory owners, managers, English tutors needed to develop foreign relationships, etc…I have seen it all with my own eyes and know personal friends who belong to China’s burgeoning middle class.

    By creating the largest middle class and the greatest appreciation of wealth the world has ever seen, the rise of China is something we should welcome; not fear. Fearmongering shouldn’t be the focus of too many posts to this site.

  • avatar
    BostonTeaParty

    Oh the irony,
    if i can find the bags, i’m going to have a cuppa now to think about that…i’ll be back to you on that one

  • avatar

    NN: What you describe sounds an awful lot like the workers were indentured. Were you aware of any debts and obligations which [may have] prevented these workers from leaving their employment? To say that such a relationship is a big step up from straving to death is both accurate and besides the point. Fearmonger I may be, but the fact that a Chinese middle class is emerging on the backs of exploited workers gives me no real cause for cheer.

  • avatar
    jazbo123

    NN:

    Ever hearing of charity starting at home?

    At least now I know that our industries are whoring themselves out to China for altruistic reasons. ;-)

    Too bad it’s not directed at their countires of origin, but that’s multinationals for you.

  • avatar
    NN

    Robert,

    I cannot say I recall any personal stories of workers prevented from leaving employment. However, I do not doubt that it does happen–I witnessed many things happen in China that would not stand here in the US. One thing is for certain–I didn’t hear much complaining from anyone about anything, and I concur that has as much to do with fear about the consequences of complaining as it does anything else. Your basic premises and fears are very much warranted, as I have spent plenty of time thinking of them myself. I am only confident that it won’t always be that way–witness the economic rise of every country that has gone from rural/backwards to an industrialized modern economy, and you will see the same repeating pattern…exploitation first (even here in the US, with indentured servants, child labor, etc), middle class emerges, alongside that emergence typically comes more political freedoms, and eventually a modern contributor to the global economy. Look at South Korea or Taiwan for what has happened there over the past 50 years.

    Jazbo, your sarcasm about altruism, in my view, actually has some truth to it. Certainly not on the corporation side, mind you, but on the policies of our government to have open trade that lets other countries take advantage of us to improve their lots. In the long run, I believe, a majority benefits.

    And regarding the manufacturing jobs that we lose, there is one premise that I believe most on this website will agree with…if you build the best product, you can charge a premium for it, and keep your manufacturing jobs in the US, or whatever country you are from. Unfortunately, most US manufacturers are not building the best products in their field, they are building commodities. China will win that game.

  • avatar
    Glenn A.

    BostonTeaParty wrote: “If you’re going to take a moral stand and not buy anything made from any source of oppressed worker then you’re going to have a strange, empty life.”

    You mean a strange, empty life as in the Amish?

    Let’s see. They have productive work, family life, happiness, plenty to eat, peace, freedom, and faith in a loving God.

    Their belief system is to keep life simple, and not become entangled in what is described as “the world” in the Bible. Thus, they have no guilt about “whoops, this refrigerator was made by slave labor” or “whoops, this Buick Rendezvous was made with Chinese engines and in Mexico, both corrupt nations – my bad.” They don’t have refrigerators or SUVs.

    So what you consider a a “strange and empty life” may be your opinion, but there are over 500,000 Anabaptists in the United States of which about 1/2 are Amish, who might well disagree with you, and the other 1/2 are largely Mennonite.
    I’d also like you to consider what the cost of food in this nation might be WITHOUT the Amish farming community…

    The Mennonites I know are fine people. They educate their own children in a one-room school house to grade 12, 90% of their youth join the church (in contrast, in most of U.S. Christendom, 10% of the youth stay in church as adults, which means within 50 years the Amish and Mennonites will BE the church on our continent, unless this changes). These youth come out with high SAT scores compared to “public educated” (brainwashed/agenda-ized, “ADHD drugged”, liberal-ized and anti-Christ) children. Most of the Mennonites do not go on to college, though there are some Mennonite colleges. Amish usually finish schooling at grade 8 (age 13).

    Mennonites and many Amish go on to work in productive self-employment, generally as carpenters (which is an occupation which might be seen to be “approved by the Maker” but also a good way to make a living and not be entirely entangled in the politics and foibles of an employer.) Some Amish and Mennonites do work for others, of course. In fact, if you own an RV, mobile home or manufactured home, there is a very good chance it was built with Anabaptist labor.

    The Mennonites I know are fine, quiet, private people who have deep convictions and live God pleasing lives in response to what Jesus Christ has done for them (Christians are the only faith in the world which says we cannot save ourselves by our works), but they don’t pay too much attention to the politics behind products because they are pretty much aware that “the world” encompasses everything. We are living in a fallen and sin filled world, and that they are just passing through as Pilgrims. They are not “better than the rest of humanity” but saved through faith, by grace a free gift of God to those who take this gift.

    In other words, avoiding Ford products because Ford gives money to homosexual causes doesn’t seem to phase them very much because they are aware that we all are living in a fallen world, and therefore this is to be expected of earthly organizations. If it isn’t Ford, then it is GM having slave labor in China, or Nike, or whatever. In other words, their focus is on God, not on the foibles and stupidity and greed of mankind. They are interested, as a group, in specific injustices but tend to look at the bigger picture, such as Sudan or Columbia for example. Not necessarily Ford.

    http://www.mennoweekly.org/DEC/12-04-06/COLOMBIA12-04.html

    This means that Mennonites “stick to their knitting” and live their lives as set-apart (literally) people, the word here is “Sanctified”, living in the world but not of the world. As far as I am concerned, they make up a remnant of true Christianity left in our nation, because many church communities are anything but a community, and many people are just “playing church” instead of living sanctified lives. This is not to say that only the Anabaptists are Christians. Only God knows the heart.

    And of course, to those of you who do not have any clue about what I just wrote about, I’m sorry but you can easily just have skipped this entry. Until such time as the scales fall off of your eyes – if ever this happens by the power of the Holy spirit – you cannot truly understand any more than a dead person can get up and walk out of the morgue. The Bible states that humanity is evil (self-evident by looking at any newspaper or TV news show) and man’s ways are set against God, and without help, mankind cannot be saved.

    So, in summary, not all of humanity are just greedy black-hearted bastards totally money and power oriented. But the percentage of those not so is pretty small, as may be evidenced by everything you see around you, and everything I see around me. It simply does not have to be that way, that is my point worth taking away here.

    Very good article, Robert. Kudos.

  • avatar
    BostonTeaParty

    Mennonites who use the internet, interesting….

  • avatar
    windswords

    I’m not saying I agree with everything Glenn A. said but technology in and of itself is not evil. What you do with it is another matter. Also unless I missed something, despite his admiration for the Amish and the Mennonites that does not mean that he himself belongs to either group.

  • avatar
    Glenn A.

    windwords is correct. At least, so far. I don’t think I could give up cars – ha. I am a car-guy. Therefore, Mennonite – yes – Amish, no. (Besides, I have allergies to hay – how much does God mean for me to NOT be Amish?!)

    Technology per se is not evil. It is how it is used, quite right. Otherwise, we would still be running around naked (no stone tools to clean skins and make clothes, right?) and living in natural caves, right?

    I have some way to go before I can probably join the church, as you might see by this article here. I’m not strong enough yet. C’mon guys, take a break and read this to see if you think you could be this strong. This is real strength. Read it and – maybe – weep. Especially if you have children or loved ones.

    http://www.mennoweekly.org/NOVEMBER/11-20-06/SCHROCKS11-20.html

  • avatar
    Glenn A.

    Some Mennonites use the internet, hence, the Mennoweekly internet site? Some do not (the local group, does not). I imagine I could get “dispensation” from the group for use at work, otherwise I’d better learn how to do carpentry again as I did before college huh? I’d have to give up my 15 insurance licenses, wouldn’t I? I can’t work in this job w/o my internet. Still, I trust in God if that were to come to pass.

    I’d miss you guys if that came about, though. I’ve decided to leave the situation one year and revisit the decision then, since I have been given so many responsibilities at my current church ending in a year.

    So you guys “have to put up with my eccentricities” for another 13 months or so. Ha.

    I hope that my knowledge about cars and historical auto knowledge is of benefit and fun to read, though. I sure enjoy this website and like to put in my 2 cents worth as well as read and learn other’s opinions and facts!

  • avatar
    PandaBear

    My parents grew up and lived the first 30 years of their lives with the houkou system and left the country, but still kept in touch with the families there. One thing I can say based on my personal experience is that the system sucks.

    In the old days, you cannot buy food, rent apartment, or even get a job by just moving from one city to another. The even more ridiculous thing is the government frequently split couples (husband and wife, not boyfriend and girlfriend) into 2 different cities for 2 different jobs (jobs were assigned back then). Imagine how can one of the parent bring up 4 kids like my grandma did when my grandpa was 3 hours away, and only visit twice a month.

    In a way, life is better now despite the international firm taking advantage of them. Now people are free to move anywhere and can find jobs, food, and housing wherever they can. The pay is not the minimum wage or fair wage, but at least it is significantly more than farming which usually means you can get rice and vegetables only. Most of the young people leave the villages and go find jobs outside, and send money back home to support their families. Food is no longer a problem, and they are not limited to a “quota” of food per month.

    So in a way, you can say we are taking advantage of them, but on the other hand, we are helping them out.

  • avatar
    wytshus

    jerry weber wrote:

    Once nationalized, any of these car and light truck factories can be retooled for military use in a heartbeat. Will they do it? We can just wait for their military to be strong enough to challenge ours on the world stage.

    Sun Tzu would be proud… Use your enemies strengths to exploit his weaknesses.

    China only needs a few more pieces of the puzzle to become a major military force. A huge piece of that puzzle is the ability to mass produce landing craft(which isnt that much different than mass producing automobiles).

    It might make people feel better about themselves when they say capitalism will bring freedom to China, because after all “Inside every Chinese is an American dying to get out.” Right?

    China WILL take Taiwan back, the way they do it will depend on how long they can take advantage of the myopic greed of Corporate America.

    What will happen to all these joint ventures when this happens?

  • avatar
    Luther

    You mean a strange, empty life as in the Amish?

    Let’s see. They have productive work, family life, happiness, plenty to eat, peace, freedom, and faith in a loving God.

    Why anybody would not want to be a tax/debt/inflation slave is beyond me… Hmmm… Maybe the Amish have it right afterall……

    Work on an Amish farm at high-noon in August and then we can talk about all those evil “Sweatshops”.

  • avatar
    jackc100

    Great thread, starting with a fine article.

    Next up is a report survival of of elder Anabaptists given the lack of dental care they allow and the ensuing infirmities along with trying to predict the future of China based on the observations of language instructors, emigrants twice removed and expats making a living off labor working in conditions that might shock an old plantation owner.

    Whew! this is better than reading and posting about the demise of SAAB.

    In any case, GM is not big enough to affect China and the sources listed above are probably better than the former missionary reports and political zealots who tried to cloud our understanding. At least GM cannot be blamed for “Losing China” when Chinese Generals take over the plants and start building cars the international market will buy.

    If you think you can separate the China environment from an appreciation of DW, also ignore the Arabs, Chavez and quiet diesels.

  • avatar
    WaaaaHoooo

    So I take it since it’s Monday all the moral absolutists called Merrill Lynch and dumped their holdings in companies having anything to do with China.

    No wait … the market went up 90 points. I think the absolutists are secretly buying to make money off the backs of their fellow man.

  • avatar
    jerseydevil

    mennonites, chinese and amish

    oh my

  • avatar
    wsn

    Replying to RF:
    While we’re at it, I’d like to hear your thoughts about GM’s extremely profitable investment in pre-war Nazi Germany. How great was that?

    We are not gods and we cannot see the future. China could be the next Nazi Germany. But it can also be the next United States.

    Remember when the US was the largest slave labour regime in recent centuries? So, it will depend on luck and proper engagement.

  • avatar
    BerettaGTZ

    wytshus wrote:

    We can just wait for their military to be strong enough to challenge ours on the world stage.

    This is an example of the misunderstood paranoia that people have about China. We are talking about the country that built the Great Wall, to keep out Mongol invaders, and the country that lambastes the US as being the “Imperialist Running Dogs.” Name another country that has had to hand over the most lucrative parts of its territory to foreign invaders (Hong Kong, Macau, Shanghai). After thousands of years of humiliation and exploitation by foreign invaders, China finally has significant economic and military power and now they simply want to get the commensurate respect on the world stage. China has never had intentions of global domination, and never will.

    China WILL take Taiwan back, the way they do it will depend on how long they can take advantage of the myopic greed of Corporate America.

    What will happen to all these joint ventures when this happens?

    Here’s what will happen if they seize these joint ventures: Foreign capital investment in China will come to a screeching halt. The US, EU, and other countries will impose economic sanctions in retaliation. Exports from China will drop severely. The resulting damage to the economy and loss of jobs will create social chaos which will create political instability and threaten the Communist regime.

    If China thought they could get away with it they would have done it long ago. Three years ago when Chen Shui-Bian was at the peak of his saber-rattling, China was just a phone call away from launching a full-scale invasion of Taiwan. They had the troops and missiles in position and ready to go. Taiwan’s military was on high alert. The US Pacific Fleet was nowhere to be found.

    Cooler heads prevailed and they pulled back at the 11th hour. So this will never happen. Our economies are too interdependent for China to make any sudden moves.

  • avatar
    Luther

    When you go to bed tonight just dont forget to check if there is a chinaman under your bed…….

  • avatar
    Glenn A.

    China may well be the “next United States” because the real United States may become more like Great Britain post WWII. Posturing, pretending, puffed up, pathetic. Totally buried in debt, socialistic, post-modern and post-Christian. And post-blessing because we P!SSED it all away.

    Our Zenith was just after WWII when we were the ONLY nation on earth to have the bomb for some 3 years, and we didn’t take over the entire world. Virtually no other nation that ever existed on earth, had it been in that position, would have NOT seized the opportunity for world-domination right then and there. We were once a great nation, highly blessed and unusual in our self-confidence, which was sufficient to pick up and assist our defeated enemies.

    We were once a great nation and had the self-confidence to realize from Whom our blessings came, and the good nature to let other religions also freely practise within our country (Islamic countries are virtually incapable of this). Now, our country has gotten to the point where, at a “Holiday Sing-song” for my son’s public elementary school 13 years ago after we moved back home from the UK, the only religious songs allowed were Jewish. No CHRISTmas songs. Might “offend” someone. We had NO Jewish folks in the school, I might add. Idiotic. I call it “A – B – C” (“Anything BUT Christianity”).

    As I said, just post WWII was our zenith and it has been down-hill for us ever since. So, the USA may well be a flash-in-the-pan, if you look at the bigger picture. 300-400 years? Phfwa. Nothing. The Jews have had a civilization for thousands of years as have the Chinese.

  • avatar
    SherbornSean

    Robert,
    You’ve hit on a lot of ethical issues here — a nice break from the the usual Porsche vs. Vette dialogue. Some thoughts:

    1. At some point you have to put the past in the past. Not buying a Malibu because GM profited from both sides in WW2 is like not buying a Ferrari because the Romans killed Jesus. No decision-maker at any motor company during the 1940’s has anything to do with today’s modern automakers.

    Now, if you won’t buy a Malibu because GM won’t own up to its past, that’s another story.

    2. The supply chain concern sounds like a stretch to me. GM has a lot more to worry about getting parts out of bankrupt suppliers on American soil than from Chinese sources. And yes, it is their own short-sightedness for destroying supplier margins in search of immediate cost reductions, but that’s another DW.

    3. As far as participation in the Chinese market, the issue is by no means unique to automakers. Every major company has to face China and decide whether it wants to participate in what will soon be the largest market in the world.

    It’s messy, it’s difficult, but it’s also necessary. You don’t control what happens outside your factory walls, you just do the best you can to treat people like people within your factory, and hope your behavior serves as a light to others.

    We honestly don’t know if GM’s participation in China will ultimately help or hurt the Chinese people. We do know that it helps GM, and that is what shareholders care about.

    4. Finally, I’m glad that Glenn A is a part of the TTAC community.

  • avatar
    Glenn A.

    Thank you, SherbornSean. Likewise to you.

  • avatar
    BostonTeaParty

    Yeah look at how our British Empire fell, so many countries we helped create, so much industry we launched and so much we lost and gave away too easily. Learn lessons the good OLD U.S.of A. Its strange how your path seems to be following how ours went through history.
    Look at how our auto industry slowly died, strangled by unions and learn. Please learn.

    I feel though Glenn A’s first paragraph sums up America currently. However if you’d have progressed and taken “world domination” as you put it, wouldnt that have made you as bad as the Nazis and other despots the world faught for its freedom?

    The next empires are in the making, power will come and go and i’m sure a new cold war with the East will come around in the next decade, maybe it’ll be more luke warm due to increasing economic reliance. But it will be there.

  • avatar
    wsn

    Replying to Glenn A:
    Our Zenith was just after WWII when we were the ONLY nation on earth to have the bomb for some 3 years, and we didn’t take over the entire world. Virtually no other nation that ever existed on earth, had it been in that position, would have NOT seized the opportunity for world-domination right then and there.

    I think the American leadership then calculated that it was not viable. Sure, the couple nukes can kill 200,000 soviet troops. And so what? The Unite States would face opposition everywhere in the world. Just imagine today’s Iraq on a global scale. The enemies of the USA (vitually every non-American) would not form a sizable army. They would do what would be regarded as terriorism today. In short, world/region dominance would require a population dominance.

  • avatar
    MadYank1

    While this is definitely starting to miss the point of RF’s post and editorial, I HAVE to add my $0.02 worth here. And here it is:

    People, all over the world, WILL have the government they want.
    In a democratic republic-style environment, such as the US, they will elect their representatives and their leader (such as President or Prime Minister) at the polls, and as long as those persons truly DO represent the majority will of those who go to the polls and vote, they will remain in power, sequentially as the laws concerning term limits, etc., allow.
    In a monarchy, oligarchy, or dictatorship, those at the top will remain in power until such time as the population of that nation decide, singly and collectively, that enough is enough. When ‘Let them eat cake!’ gets beyond the tolerance of the masses, then the masses will rebel (“The peasants are revolting!” “Yes, I know, Marie; will you have more champagne?”), and the monarchy, whatever, will fall.
    In a theocracy, such as in much of the Middle East, and – believe it or not, because the difference between Islam and Communism is that Islam point-blank says God rules, and Communism doesn’t admit that they’ve replaced God with Lenin, or Mao, or whoever – the high priests will rule until the people tire of watching the human sacrifices dig deeply into their own households. That may be something of a stretch, but not as far as you may think.
    And don’t let the idea of superior firepower fool you. One maniac with a machine gun can cow 100-1000 people, but the PLA, as an example, doesn’t have 2 billion machine guns – but they DO have over 2 billion people to cow! Besides, as a combat veteran myself, and a former police officer, I recognize an ancilliary problem that a LOT of supposedly learned men forget; what happens when the gun jams from overheating, cooks off a round in the chamber, or runs OUT of ammo?
    Well, the gunner dies from being stomped to death, IF the poeple have really decided it’s time for a change of government.
    Tanks, Artillery, Fighter-Bombers; they all have the same weakness; they all have drivers or operators, and sooner or later, they either run out of gas, run out of ammunition, or the driver HAS to sleep.
    And not even Joe Stalin himself would have nuked his own cities; it tends to lose productivity in the factories that way. Unproductive factories DEFINITELY shut down governments, because power comes from the rustle of a dollar, ruble, or yuan; Mao and his comment about power coming from the end of a gun just shows how STUPID Mao Tse-Tung really was.

    No, when the Chinese PEOPLE decide they want a change of government, they will get it. It’s just a question of how many will die to get it, and how many warlords, mandarins, and damn fools will be left in Beijing when it’s over.

    And the same thing goes for all those people in Iraq, Iran, Jordan, Syria, Saudi, and anywhere else that Islam is used as an excuse for power-grabbing.

    See ya!

    Jim

  • avatar
    BostonTeaParty

    Glenn A’s attitude sums up a perception the world has of the US, that it only cares for itself and no-one else, a bully that dictates its thoughts onto everyone at a world stage…..unsuccessfully. A perception which covers everything from politics to business to everyday life.

  • avatar
    Glenn A.

    Well, BostonTeaParty, I have to say that the rest of the world is absolutely no better in any regard than the United States except in small details here or there, and sometimes the US is better in small details here or there.

    I think it all depends upon, first and foremost, how you perceived the world.

    I see the world made up entirely of fallen humanity, faulty and imperfect. Not “just Americans” being bad or “just Islamics” being bad.

    Your statement about the perception of the world vis a vis the USA is interesting, but speaks more about “them” than it does Americans, does it not?

    It is also interesting that the rest of the world very conveniently forgets how magnanamous the people and nation of the USA were after WWII re: their defeated enemies, for example.

    In short, it’s easy to hate, hard to love.

  • avatar
    BostonTeaParty

    But when more of “them” think a certain way. All of “them”can’t be that wrong can they?

    Better in what way, creating a war based on misinformation, political and monetarial greed? hmmmmm and you wonder??
    Yes people forget about WW2 but at some point you can’t keep expecting for people to keep going back to that. Yes America helped, for that though the world was grateful, but the world has moved on, we helped rebuild Europe/Germany and Japan. Look what they are doing to industry now. They helped you in the Iraqi oil wars…ho hum

    In short it depends on the woman and how late your dinner is.

  • avatar
    nutbags

    The Discovery Times channel recently aired a program on the Chinese labor practices. It revolved around the manufacture of the beads and crap for Mardi Gras. The workers are exploited beyond belief.
    Since viewing this, I have made all attempts to not purchase anything made in China. This is a challenge and has cost some additional money but it is something we all need to do in order to change this.

  • avatar
    SherbornSean

    Nutbags,
    I know you mean well, but I’m not clear on your objective. If everyone stopped buying junk from Chinese factories with lousy labor practices and instead bought the same junk for a few bucks more from say, Mexican factories with labor practices that meet your standards, what is the impact?

    You have thrown the Chinese workers out of their factory jobs where they made $2 a day and now they are back on the farm making $2 per week. This is a good thing?

    Perhaps rather than boycott all Chinese goods it would be better to purchase only from vendors that meet your requirements for proper working conditions. Organizations are developing to certify factories — one example is Free Trade Coffee. It costs more, but you are assured that the farmers make a fair wage and don’t destroy the environment in the process.

  • avatar
    Glenn A.

    “BostonTeaParty:
    December 5th, 2006 at 12:36 pm
    But when more of “them” think a certain way. All of “them”can’t be that wrong can they?”

    Yes, “they” CAN “all” be wrong. They are expecting perfection from a nation and aren’t getting it.

    Well, booo hoooo. Look for perfection in their own hearts, then expect it in someone else. Aint’ gonna find it.

    Most of the whining is from enemies who are apalled that THEY aren’t in the position of the United States, anyway. So, consider the source of the fodder that the mass-media feeds the population in these countries.

  • avatar
    BostonTeaParty

    America is so insular, they’re not expecting perfection, you are.

    Yeah appaled their nation is not trillions in debt, hated by the world…..come on get real Glenn. America is losing respect globally. do you really want that to continue?

  • avatar
    Luther

    Remember when Hong Kong went to Communist Chinese control?(1999) Did the Communist turn Hong Kong into a thieving-Socialist dump? Or did Hong Kong turn China into a free-market system?

    War is made obsolete by free markets and free trade (Capitalism). People would rather trade goods, sevices, friendships than bullets and bombs. It is only the small handful of thieving maggots that call themselves “The Government” that prefer bullets and bombs. With the exception of a few Religious psycho-killers (With lots of oil money) in Iran and Iraq, Americans have nothing to worry about. We (Capitalism) won. (Korea will be united in our lifetime with the Capital being Souel. Note that it was the “Communist” Chinese Gov’t that smacked-down the drunk-boy Kim in North Korea when he rattled his nuke sabers.)

  • avatar
    Glenn A.

    So, BostonTeaParty, if you are unhappy here in the United States and unhappy in a nation which “everyone hates”, then may I respectfully suggest you try it elsewhere and see what you think? email us all and let us know how it goes, and good luck with that.

    I’m not delusional with the belief that America is the only place on earth worth living in, etc.; I’ve actually lived overseas. You may find after experiencing life elsewhere that life in the U.S. is not so bad. If it were so dang bad, why do we have to suffer with 20 million illegal aliens who have snuck in, and why do scores of bottle-blond Ukrainian and Russian women want US husbands, and so on?

    No place on earth is perfect, but I am content to try to improve my own country from within, one vote at a time, one helping hand at the church food pantry at a time, one conversation at a time, one blog comment at a time.

    If that does not work for us all and our nation collapses, then we will work through what is left, pick our foreheads up out of the gravel and get back to work, in order to make a life.

    Perhaps collapse happens, we can rebuild a Republic using a gold standard or even better yet, gold and silver as real currency. But, that is a subject for a different place than here, isn’t it?

  • avatar
    WaaaaHoooo

    I bought that Fair Trade Coffee once and only once. Yeah, maybe the farmers got a fair shake out of the deal, but it was the lousiest tasting coffee imaginable. After that it was back to Illy for me – to heck with the farmers.

  • avatar
    Jan Andersson

    How about Eastern Europe? A LOT of people, once free (well…) as the rest of Europe, now eagerly struggling towards West European standard of living. But still working for a few dollars an hour. Yes, as long as there’s one poor peasant left in China’s countryside, they can keep salaries very low. If the Chinese autoworkers have patience and accept it. If there’s no strikes. If there’s no tanks and no machine guns.

    Eastern Europe seems to be a safer alternative both in the short and long run, but first choise in the growing local market is perhaps not American cars, but both Opel and Ford could be bestsellers. But then there’s Putin…

  • avatar
    WaaaaHoooo

    Yes Eastern Europe is a manufacturing destination, but with China I think tariffs might play a role. I don’t know for sure, but a friend over there told me the other day that a 7-series goes for about RMB 2 million (about $250k). I said “what? – that’s like 3 times the price here?” and she told me that there was a 200% tax as the car was not locally produced.

    Now if that is true, how China got into the WTO while levying a 200% tariff on cars is beyond me (probably some political deal) but manufacturers of everyday vehicles can’t overcome that type of tariff anywhere, so if you want to play in tomorrow’s most lucrative market you are forced to locate your plant on Chinese soil today. Of course, that is usually the point of heavy tariffs like that, and yes they have them in Jamaica too, only the market in Jamaica isn’t worth the effort, whereas China very much is.

    In the case of high level cars like a 7 series the tariff plays a far lesser role in plant decisions because the vehicles are niche and status more than anything else, and niche/status are bleedable.

  • avatar
    nutbags

    SherbornSean,
    I should have stated that I try to purchase goods manufactured in the US and support our workers. But it is difficult with some products – such as clothing, electronics and automobiles. Come to think of it, what do we manufacture any more?

  • avatar
    SherbornSean

    income statements?

  • avatar
    cfisch

    RF.
    Have you read the new article in business week about GM? Comments?

  • avatar

    Not yet.

  • avatar
    Joe Chiaramonte

    Here’s a perfect example of what happens when China chooses to cross the line from commodity-provider to technology-provider:

    http://www.msnbc.msn.com/id/16072769/

    Note that the statements come from a “general secretary,” from a government-backed industry alliance.

    Note that China is saying they (the largest provider of this line of commodities) will stop making this commodity under the internationally accepted format in 2008, only then on producing commodities using technology they own.

    Note that China assumed the position of commodity leader in this market by providing the lowest-cost alternative.

    Note that they tried, failed, and are now committed to their position.

    Note that, in a free market, the old technology would still thrive if it weren’t mandated to be phased out.

    Then, tell me US automakers face no potential downside to erecting state-of-the-art manufacturing facilities in Chinese “joint ventures.” How quickly will these joint ventures become the springboard for Chinese-licensed technology, making the partnerships obsolete?

    Does this statement:

    “By 2008, when EVD replaces DVD, there will be no major impact on Chinese manufacturers,”

    …sound protective to you?

  • avatar
    wsn

    I don’t know for sure, but a friend over there told me the other day that a 7-series goes for about RMB 2 million (about $250k). I said “what? – that’s like 3 times the price here?” and she told me that there was a 200% tax as the car was not locally produced.

    Now if that is true, how China got into the WTO while levying a 200% tariff on cars is beyond me (probably some political deal)

    An MB S600 costs ¥2.1M there ($0.14M in the States), roughly 90% total tax. Not exactly high, if you compare that to HongKong or Japan.

    In case you don’t know, RMB is over vaulated in purchasing power in terms of cars or housing. Some people say RMB is under vauled and they refer to food.

  • avatar
    wsn

    Joe Chiaramonte:
    By 2008, when EVD replaces DVD, there will be no major impact on Chinese manufacturers,”
    …sound protective to you?

    Joe, since you do not know China, you had better stick to cars.

    That EVD thing is simply a ploy to make bank lend money to some state owned firms. No one would mention it again once the fund transfer is completed.

  • avatar
    Joe Chiaramonte

    wsn

    You’re correct, I “do not know China.”

    So, I suspect that I’m in the same dank, turbid waters as GM, Ford & DCX may find themselves wading in there.

    And the Chinese government holds their finger on the plug for their collective life raft.

  • avatar
    wsn

    Joe:

    No, GM knows much better than you. They earned a lot of money there already. Let me use an anology of semiconductor investing:

    1) AMD is riskier than Intel. That we all know.

    2) But that doesn’t mean Intel is a better company (than AMD) to invest.

    3) You cannot say AMD is not worth investing just because you don’t know AMD. And you cannot assume all AMD investors know as little as you do.

    4) AMD investors all think they understand the company.

    5) Some of them do understand.

    Now, substitude Intel/AMD with two country names and you get same thing.

  • avatar
    Johnny Canada

    Perhaps, a final thought.

    During a visit to Berlin, I learned that the anti-graffiti paint that is used on the Holocaust Memorial is supplied by Degussa Chemical, a division of the same company (IG Farben) that manufactured Cyclon-B for the gas chambers.

    I guess the price was right.

  • avatar
    Joe Chiaramonte

    wsn, you’re still making a free market analogy, which doesn’t completely apply.

    From Robert Samuelson in the latest Newsweek:

    “China’s emergence is altering the world balance. In spirit, its economic policies are mercantilist. It subsidizes its exports with an artificially low exchange rate; it is seeking captive oil supplies. China’s policies are for China, not a stable world order.”

    (http://www.msnbc.msn.com/id/16190938/site/newsweek/)

    So, wsn, educate me:

    Relating specifically to joint ventures between US and Chinese auto manufacturers, are these partnerships structured to be protectionist and advantageous to Chinese interests, closely controlled by the Chinese government?

    – or –

    Is China truly a free market?

  • avatar
    redbud51

    Robert,

    This editorial persuaded me to read Edwin Black’s entire article and as you commented, “GM has a bit of history in this regard, and it ain’t pretty.”

    Boy did you nail it.
    Why the hell did it take this long to bring this to the light of day?


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