China Loves Cars. Ford? Not so Much…
Ford was late breaking into China's red-hot car market, and it's paying the price. Detroit News reports that Ford's share of the of the Chinese pie grew from two percent to 2.1 percent last year– falling well short of FoMoCo's internal 2.4 percent target. This in a year where car sales spiked 20 percent. Ford was late developing manufacturing infrastructure in China; it opened its first factory some 18 years after longtime China sales leader VW, five years after GM. Ford's only top-ten hit in The People's Republic: the Focus. Due to the large number of Focus parts sourced from outside China, the model still generates less profit than its competitors. Perhaps more worrisome for Fords long-term efforts: its inability to put together an attractive, coherent brand for the Chinese market. Ford's Asia/Pacific division chief John Parker blames Ford's "big car" image. Meanwhile, Mazda is taking up the slack. Of Ford's $244m pre-tax profit in the Asia/Pacific region, Mazda accounts for $204m. Ouch.
More by Edward Niedermeyer
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Yep, the Chinese learns what they need to from the first world companies and then uses all that knowledge against same companies by undermining them in China and in the first world. Standby for an ass-kicking by the Chinese just like they have done in our stores. I mean just how much do you think of the consumer goods available in the big box retailers was made in Europe and the USA? The car lots are coming next. Maybe a decade off, maybe sooner. The current leadership sees it coming and doesn't care becuase they'll be retired by then sucking up pension payments on their yachts.
Right, right... but won't the evil Chinese be destroying our economy by sinking our currency first? Sheesh, the level of paranoia in this country about the 21st centuries land of opportunity is a little staggering sometimes.
Call it paranoia but my education is in manufacturing and if you work in a foundry or a factory making stuff then you have witnessed those kinds of jobs much fade away since the 70s. Where did it go? Mexico, China, Japan... Who can we blame? Ourselves. Our consumers for shopping for the lowest prices (quality not important), the unions for pushing wages up until the hassle/cost of manufacturing in a foreign land is worthwhile, the upper management for making the decisions and collecting the huge paychecks. Oh and the stockholders and the gov't for letting it happen, etc etc etc. Everybody. China is a land of opportunity if you are correctly positioned to take advantage of it but if you are line worker (I am not, I have a BS in engineering) or if you planned to work in manufacturing all of your life, then the number of opportunities for that kind of career have vastly shrunk in this part of the country (TN). Yes I would move my family if I needed to. What I see around here are small employers where a select few at the top of the company food chain make a comfortable living ($50K+) and where the rest of the company gets by ($10-$12 an hour) okay. I am well employed today in a stable situation but I have friends who worry (connected to the auto industry or other concerns likely moving across the Mexican border in the future). All in all I'd like to see those jobs come back to America. I'd like to see folks with reasonable pay expectation, and companies from retail to manufacturing be more committed to designing, manufacturing and selling American made products. I'd like to see consumers find their way back to American goods. Unfortunately America has in the past had big heads about how good their stuff until the Asians "invaded". I am glad Sony and Panasonic and Toyota came along. Competition is good for all of us. Anyone remember the AM/FM Stereo Walkman? Big deal for us when we were kids. RCA and Zenith and Magnavox didn't offer much like that. I'm not sure what the Chinese have to teach the Japanese and Koreans in the auto marketplace but they may well be the straw that broke the camel's back where the big 3 are concerned. Having visions of $8K compact cars that the consumer who always chases the lowest price is going to snap up as fast as the Chinese can ship them in. Especially if our economy is limping along when those cars begin to arrive. Let's see - a 35 mpg compact with a/c for $8,500 or a 96 month loan on a Silverado??? (the loans are now up to 84 months in some markets on some vehicles I've read).
If the chinese want to take over more industries by making products for next to no profit then so what? The end game for that is supposed to be that they then RAISE prices and make a fortune because they control the market. So long as they don't have enough dominance to control a market, they continue to work at slave wages for us. They have been at this for decades and what do the control so far? When you put a lot of value on "jobs" instead of goods and services, this is the result.